Mitsui Sumitomo Insurance China (MSI China) is poised for a stable outlook in 2024, continuing its critical role within the MS&AD Insurance group, according to S&P Global Ratings. The insurer’s strong ties with its parent company emphasize its strategic importance, especially in servicing Japanese entities operating in China.
S&P Global highlights MSI China’s integral position in MS&AD’s international strategy, benefiting from extensive support including business referrals, underwriting expertise, reinsurance arrangements, digital enhancements, and rigorous risk management and governance practices.
Despite contributing only 0.5% to the group’s total net assets and 1.0% to its profits, MSI China remains a vital component of the parent group and is unlikely to face divestment. The insurer’s Japanese-related business, which makes up 83% of its portfolio, is expected to continue driving its underwriting profit.
However, MSI China may see a slight dip in underwriting profits in 2024 due to performance challenges in its liability lines. Despite this, the insurer has maintained stable profitability with a net combined ratio of 93.5% for 2023.
MSI China is anticipated to sustain a strong capital buffer and healthy regulatory solvency levels, with comprehensive and core solvency ratios at 289.7% and 243.0%, respectively, as of June 2024. In 2023, the company distributed $13.0 million (RMB 94 million) in dividends.
