MSI China’s capital buffers stay healthy in 2024

The insurer's Japanese-related business will continue to drive its underwriting profit.

Mitsui Sumitomo Insurance China’s (MSI China) outlook remains stable and stands as an integral part to the MS&AD Insurance group.

Its outlook indicates that MSI China will remain a highly strategic subsidiary of the MS&AD Insurance group over the next two years, S&P Global Ratings said.

MSI China's role in the MS&AD Insurance group's international strategy, particularly in servicing Japanese entities in China, underscores its significance, emphasised S&P Global. 

The insurer benefits from parental support, including business referrals, underwriting expertise, reinsurance arrangements, digital enablement, and robust risk management and governance. 

Despite its small contribution to the group's overall net assets and profits (0.5% and 1.0%, respectively), MSI China remains highly integrated with its parent group and is unlikely to be disposed of. 

The insurer's Japanese-related business, which constitutes 83% of its book, will continue to drive its underwriting profit.

Whilst MSI China may experience thinner underwriting profits in 2024 due to performance issues in liability business lines, it has a track record of stable profits with a net combined ratio of 93.5% in 2023. 

The insurer is expected to maintain a satisfactory capital buffer and healthy regulatory solvency levels, with comprehensive and core solvency ratios at 289.7% and 243.0% as of June-end 2024, respectively. MSI China paid out $13.0m (RMB94m) in dividends in 2023.

($1.00 = RMB0.7.25)