SINOSURE’s exposure to risky assets remains a concern, Fitch says

Capitalisation is expected to remain adequate to support underwriting expansion.

China Export & Credit Insurance Corporation’s (SINOSURE) outlook remains negative amidst policy-oriented role in supporting China's export activities and its government ownership, Fitch Ratings said.

Jointly owned by the Ministry of Finance and Central Huijin Investment Ltd, the company holds a strong position in the export credit insurance market, providing coverage for overseas trade and investment. 

Fitch expects SINOSURE to maintain its nationwide presence and its role in stabilising foreign trade.  

Capitalisation is expected to remain adequate to support underwriting expansion and manage risk. 

Investment returns remain the key driver of earnings, with higher investment income and reduced unrealised foreign currency losses contributing to improved profits in 2023.

However, underwriting earnings are expected to remain marginal due to the company’s policy-oriented mandate. 

SINOSURE continues to follow a conservative investment strategy, with a significant portion of assets held in cash, term deposits, and bonds, whilst exposure to riskier assets was limited to about 27% of its equity capital at the end of 2023.