Zheshang Insurance capital position under pressure: Fitch Ratings

Fitch also highlighted concerns over the insurer’s higher asset and liquidity risks.

Zheshang Insurance’s capital position remains under pressure due to its exposure to equity assets and alternative investments, Fitch Ratings said. 

Additionally, whilst its underwriting performance has improved, it is still vulnerable to volatile investment returns. 

Fitch also highlighted concerns over the insurer’s higher asset and liquidity risks, particularly its increased allocation to non-standard assets.

“Zheshang Insurance's Fitch-defined risky assets - mainly equities, property investments and fixed income investment funds - rose to 64% of shareholders' equity by end-3Q24, from 55% at end-2023,” the Fitch note said. 

“The company has increased its allocation to non-standard assets to enhance yield, in line with many other Chinese insurers. Fitch regards such investments as less transparent and liquid than bonds,” it added.