Hyundai Insurance targets premium growth with electric vehicle focus

But AM Best expects underwriting and overall operating losses to persist.

Hyundai Insurance (China) Co., Ltd. (HIC) is placing greater focus on electric vehicle insurance as a key driver of premium growth, AM Best said.

However, the company’s outlook remains negative, reflecting expectations of a sharp deterioration in the firm’s risk-adjusted capitalisation due to higher underwriting risk and continued operating losses in the near to medium term.

HIC’s balance sheet remains assessed as very strong, supported by capitalisation at the strongest level at year-end 2024, although this is projected to decline. 

Since a shareholding change in 2020, the company has shifted its underwriting from commercial property and engineering to individual lines, a transition that led to consecutive underwriting losses and a reduction in capital and surplus from $240m (RMB1.7b) in March 2020 to $180m (RMB1.28b) in 2024.

Whilst the company’s combined ratio has improved through operating efficiencies and stabilisation in its motor business, AM Best expects underwriting and overall operating losses to persist. 

Investment income from cash and deposits is expected to remain steady, but insufficient to offset underwriting pressures.

HIC is expected to remain a small player in China’s non-life market, with a niche presence in ride-hailing motor insurance in certain provinces. 

AM Best does not expect its market position to expand significantly in the short to intermediate term.

($1.00 = RMB7.18)