Moody's forecasts strong performance for Dinghe Insurance

The ratings agency said Dinghe Insurance’s limited market share outside of CSG's business is seen as a weakness.

Dinghe Insurance is projected to keep its strong risk-based capitalisation and underwriting profitability over the next 12-18 months, Moody’s Investors Service said.

Dinghe Insurance is perceived as supported by its affiliation with major shareholder China Southern Power Grid (CSG). 

However, weaknesses include its limited market share outside of CSG's business and high exposure to natural disasters due to its geographic concentration.

The agency also sees the insurer's business relationship and ownership by CSG will not falter.

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Dinghe Insurance's profitability and capitalisation are bolstered by an RMB6.5 billion capital injection in 2022 and continued support from CSG. 

The insurer is expected to maintain robust underwriting profitability, driven by adequate premiums and low acquisition expenses. 

However, its market share outside CSG remains modest, and its non-motor business is concentrated in regions prone to natural disasters.