Stable underwriting improves China Taiping Insurance's outlook

Capital and surplus increased by 2.4% in 2023, reaching $679m.

China Taiping Insurance (HK) Company Limited’s [CTPI(HK)] balance sheet strength, deemed “very strong” by AM Best, is supported by risk-adjusted capitalisation and improved financial metrics under the HKFRS 17 standard.

Capital and surplus increased by 2.4% in 2023, reaching $679m. The company also maintains a healthy solvency buffer under Hong Kong’s risk-based capital framework, underpinned by prudent asset allocation and reinsurance practices.

AM Best anticipates that CTPI(HK) will continue its conservative investment strategy and robust risk management, ensuring stability in its risk-adjusted capitalisation in the short to medium term.

Operating performance has been stable, with underwriting results improving since 2019 and a combined ratio below 100% in 2023 under IFRS 17. 

Net investment income, driven by bonds and investment properties, remains a key contributor to profitability, whilst the return on equity stood at 4.5% last year. 

However, the underwriting margin is expected to remain thin, with investment income sustaining the bottom line.

The company has shifted focus toward direct business over inward reinsurance in recent years, a strategy AM Best expects to continue. 

Its integration into China Taiping Insurance Group Ltd.’s Greater Bay Area strategy provides strategic importance and parental support, which are expected to remain stable in the foreseeable future.