AM BEST REVISES OUTLOOK ON ZHONGAN TO POSITIVE

KUALA LUMPUR, Nov 14 (Bernama) -- Global credit rating agency, AM Best has revised the outlooks on China’s ZhongAn Online P&C Insurance Co Ltd (ZhongAn) to positive from stable while affirming its financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent).

In a statement, AM Best said the credit ratings (ratings) reflected ZhongAn’s very strong balance sheet strength, marginal operating performance, favourable business profile and appropriate enterprise risk management.

The positive outlooks recognise the company’s improving operating performance, noting that ZhongAn returned to profitability in 2023 and beyond, with its technology and banking segments achieving breakeven in 2024 and mid-2025, respectively. Continued profitability is expected, supported by improved underwriting and investment results and greater earnings stability from non-insurance segments.

ZhongAn’s balance sheet strength is assessed at the very strong level, anchored by its strongest risk-adjusted capitalisation as measured by Best’s Capital Adequacy Ratio. The company’s capital and surplus rose to 21.6 billion Chinese yuan (US$2.95 billion) at the end of June 2025, driven by consistent profit retention. (US$1=RM4.12)

Capital is expected to increase by more than 15 per cent following the insurer’s new share issuance in July. The company also benefits from diversified and liquid investment portfolios dominated by fixed-income assets, as well as strong financial flexibility as a publicly listed entity in Hong Kong.

The credit rating agency assessed ZhongAn’s business profile as favourable, citing the insurer’s leadership in digital innovation. As China’s first online-only property and casualty (P&C) insurer, ZhongAn has utilised proprietary technology to issue high-volume digital policies across individual product lines, including accident and health, shipping return, credit and guarantee and motor.

ZhongAn’s domestic market share rose to 2.0 per cent in direct premiums written in 2024, positioning it eighth in the country’s P&C insurance sector. Its technology export business has also grown significantly, serving clients in banking, insurance and securities both within China and overseas.

-- BERNAMA