Core Viewpoint - AM Best has awarded Samsung Property & Casualty Insurance (China) Co., Ltd. an "A" (Excellent) Financial Strength Rating (FSR) and an "a" Long-term Issuer Credit Rating (ICR), with a stable outlook [1] Group 1 - The company has established a stable commercial insurance business and a continuously growing personal insurance portfolio, supported by two major shareholders [2] - Samsung P&C offers a wide range of insurance products, including corporate property insurance, liability insurance, engineering insurance, accident and health insurance, and return shipment insurance [2] - The company's risk-adjusted capital strength is assessed to be at the strongest level, supported by a conservative investment strategy, good liquidity, and comprehensive reinsurance arrangements [2] Group 2 - Following a change in equity, the company's capital strength has significantly improved, with its local solvency margin well above regulatory minimum requirements [2] - Both major shareholders have strong credit foundations and are expected to continue providing financial and non-financial support to the company in the medium term [2] - AM Best believes that Samsung P&C's overall risk management practices are appropriate for its risk profile [2] Group 3 - Samsung P&C was established as the first wholly foreign-owned property insurance company in China in April 2005, following a solid operational foundation in the country [3] - The company entered the auto insurance market in June 2010 and was the first foreign property insurance company to operate direct sales for auto insurance [3] - In August 2022, Samsung P&C underwent a capital increase approved by the Shanghai Banking and Insurance Regulatory Bureau, introducing Tencent and four other new shareholders, officially transforming into a joint venture supported by strategic partners [3] Group 4 - AM Best, established in 1899, specializes in credit ratings for the insurance industry and insurance-related securities, with its headquarters in the United States and regional offices in various global cities [3]

Core Viewpoint - The long-established insurance company China Insurance is facing significant challenges, including internal operational issues and external pressures, leading to a decline in its core subsidiary, China Property Insurance, and overall financial performance [1][6]. Group 1: Company Performance - China Insurance's net profit in 2023 was nearly at a low of 0.93 billion, with a recovery to 5.12 billion in 2024, but this is still a significant drop from 10.15 billion in 2018 [6]. - China Property Insurance's net profit fluctuated significantly, with a total of 9.51 billion in 2024, but this was achieved while distributing 14.6 billion in dividends, indicating a concerning financial strategy [6][8]. - The company's core solvency adequacy ratio dropped to 137.37% by the end of 2024, a decrease of 18.75 percentage points from the previous year, highlighting capital pressure [7][10]. Group 2: Rating and Market Position - Fitch Ratings withdrew its "BBB+" rating for China Property Insurance, which had previously been downgraded from "A-" due to internal management issues and the deteriorating financial condition of its controlling shareholder, Oriental Asset Management [2][3]. - The market position of China Property Insurance is under threat, facing competition from peers like Sunshine Property Insurance, which has surpassed it in net profit multiple times since 2018 [7][10]. Group 3: Investment and Operational Challenges - China Property Insurance's investment income plummeted to 0.29 billion in 2024, a staggering decline of 96.92% from 9.43 billion in 2023, indicating missed investment opportunities [9]. - The company has a high exposure to risk assets, with 74% of its shareholder equity tied to these assets, and has faced issues with bad investments, particularly in real estate-related trust plans [10]. - The combined cost ratio for China Property Insurance has hovered around 99%, indicating operational inefficiencies and high claims costs [10]. Group 4: Regulatory and Governance Issues - China Property Insurance has faced over 100 regulatory fines in 2024, totaling more than 13 million, reflecting serious internal governance issues [11]. - Recent management changes have occurred in response to ongoing compliance failures, but the effectiveness of these changes remains to be seen [11]. Group 5: Life Insurance Sector Challenges - China Life Insurance has consistently reported losses since its inception, with a significant drop in insurance business revenue from 65 billion in 2022 to 52.51 billion in 2024 [12][13]. - The company relies heavily on bank insurance channels, which have seen a decline in contribution to total revenue, further weakening its competitive position [13].