Fitch Ratings has highlighted that China-based Zhongyuan Agricultural Insurance Co. (ZYIC) has demonstrated significant financial improvement, driven by effective cost controls and a refined risk-selection strategy. The company’s underwriting performance remains solid, with profitability bolstered by these measures.
ZYIC’s combined ratio improved to 92.5% in 2024, a notable decrease from 94.6% in 2023, and averaged 91.2% over the three-year period from 2022 to 2024. The combined ratio is a key indicator of underwriting efficiency, with lower figures signifying better performance.
Additionally, the company’s return on equity (ROE) increased to 8.2% in 2024, up from 7.0% the previous year, with investment income playing a key role in the boost to profitability.
ZYIC’s capital position remains strong, thanks to a $320 million (RMB 2.3 billion) equity injection in 2023. Fitch projects the company’s capital resilience to continue over the next two to three years. Despite a slight decline in the company’s regulatory comprehensive solvency ratio to 430% at the end of 2024, down from 488% in 2023, it remains well above the 100% regulatory minimum.
Fitch also expects continued backing from the Henan provincial government, which holds stakes in ZYIC through state-controlled entities, offering additional support to the company.
While ZYIC’s focus on agricultural insurance exposes it to catastrophe risks, the company is expected to maintain its reinsurance strategy to mitigate claim volatility. Agricultural insurance remains a core segment for ZYIC, accounting for 77% of its gross premiums in 2024. Fitch anticipates steady premium growth in this area moving forward.
With its robust financial foundation and strong market presence, Zhongyuan Agricultural Insurance is well-positioned for continued growth in the coming years.
(Note: The exchange rate is $1.00 = RMB7.27)
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