Zhongyuan Agricultural Insurance profits from cost controls: Fitch

It’s capital position is projected to remain resilient over the next 2 to 3 years.

China-based Zhongyuan Agricultural Insurance Co. has sustained an improvement in its financial performance, whilst underwriting performance is seen to remain profitable, supported by a refined risk-selection strategy and cost control measures, said Fitch Ratings.

The company’s combined ratio improved to 92.5% in 2024 from 94.6% in 2023, with a three-year average of 91.2% between 2022 and 2024. 

Investment income also contributed to an increase in return on equity to 8.2% in 2024 from 7.0% in 2023.  

ZYIC’s capital position is projected to remain resilient over the next two to three years, following a $320m (RMB2.3b) equity capital injection in 2023. 

The company’s regulatory comprehensive solvency ratio fell to 430% at the end of 2024 from 488% a year earlier but remains well above the 100% regulatory minimum. 

Fitch also expects continued support from the Henan provincial government, which holds stakes in ZYIC through state-controlled entities.  

Given its focus on agricultural insurance, ZYIC remains exposed to catastrophe risk but is expected to maintain its reinsurance strategy to manage claim volatility. 

The company’s market presence remains stable, with agricultural insurance accounting for 77% of gross premiums in 2024. Fitch anticipates steady premium growth in this segment.

($1.00 = RMB7.27)