AM BEST AFFIRMS EXCELLENT RATINGS FOR CHINA’S PING AN P&C

KUALA LUMPUR, May 19 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” (Excellent) of Ping An Property & Casualty Insurance Company of China Ltd (Ping An P&C), with a stable outlook for both ratings.

The affirmation reflects Ping An P&C’s robust financial foundation, strong operational performance, favourable business profile and appropriate enterprise risk management, according to AM Best in a statement.

The company’s balance sheet is considered very strong, supported by the highest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio. Ping An P&C's consolidated capital and surplus (C&S) grew by nine per cent year-over-year to 136.7 billion Chinese yuan (US$18.7 billion) by the end of 2024. (US$1=RM4.28)

Its investment strategy remains conservative, with a focus on fixed-income assets, while its financial flexibility is bolstered by a consistent ability to issue capital supplementary bonds domestically.

Operationally, Ping An P&C has sustained strong returns, with a return on equity (ROE) of 11.5 per cent in 2024, recovering from underperformance in 2022 and 2023. The insurer reported a net profit after tax of 15.0 billion Chinese yuan.

Its motor insurance line continues to be a key revenue driver, accounting for about 70 per cent of total premiums over the past five years.

Despite the rise in new-energy vehicle (NEV) policies, the company has maintained stable underwriting margins thanks to advanced pricing models and operational efficiency. Losses in credit and guarantee lines in previous years were labelled as one-off events, and the company has since exited that segment.

Ping An P&C holds a strong market position, being the second-largest property/casualty insurer in China since 2009, with around a 20 per cent market share. In 2024, the company’s insurance service revenue hit 328.1 billion Chinese yuan, and its broad distribution network and technological investments have contributed to enhanced risk management and operational performance.

AM Best notes that Ping An P&C is well-positioned at its current ratings level. A potential upgrade could be on the horizon if the company expands its global footprint while maintaining its financial strength. Conversely, a downgrade could result from a prolonged decline in underwriting results or a weakening of its capital base due to elevated risk exposures.

-- BERNAMA