Generali China solvency slips as investment risk rises

Parent funding lifted the solvency measure to 230% at the end of 2025.

Generali China Insurance (GCI) is expected to maintain sufficient capital to support its planned premium growth whilst absorbing underwriting volatility, as the insurer builds on a stronger capital position following a capital injection from its parent.

According to Fitch Ratings, GCI's capital strength improved after receiving a $57.9m (CNY392m) capital injection from parent company Assicurazioni Generali in July 2025. 

The capital injection lifted GCI's comprehensive solvency ratio to 230% at the end of 2025 from 166% at the end of the first half of 2025.

The ratio eased to 219% by the end of the first quarter of 2026 due to higher market and credit risk charges from new equity investments and increased reinsurance counterparty exposures, but Fitch said it remained well above regulatory requirements.

Fitch expects GCI's underwriting performance to face a test as business linked to its former shareholder, China National Petroleum Corporation, continues to run off. 

However, the agency noted that underwriting improved in 2025, with the combined ratio falling to 102% from 105% a year earlier as catastrophe losses eased, underwriting became more selective, and reserve movements turned favourable after changes to the insurer's reserving methodology. 

Higher integration costs following its transition to Generali partly offset these gains.

The agency also expects GCI to continue increasing allocations to equities and corporate bonds to improve investment returns. 

Its risky-asset ratio rose to 32% at the end of the first quarter of 2026 from 24% at the end of 2025. Despite the shift, Fitch said the insurer's investment risk remains manageable because most of its portfolio is invested in fixed income and its larger capital base provides a stronger buffer against potential losses.

GCI wrote $270m (CNY1.8b) in gross premiums in 2025, giving it a 0.08% share of China's non-life insurance market. The insurer operates seven branches across China and has an established client base in the energy sector.

($1.00 = CNY6.77)