Sunshine Insurance to have strong capital by '23-'24 with $970m bonds

The insurer will likely maintain a large holding of high-risk assets for better yield.

Sunshine Insurance Group (SIG) is expected to maintain favourable operating results, driven by an increased focus on the insurance margin, according to Fitch Ratings. Sunshine Life Insurance’s (SLI) new business value rose by 37% YoY in 1H23, reflecting a sales recovery post-Covid-19 restrictions.

The affirmation reflects SIG’s robust financial performance, strong capitalisation, despite significant exposure to risky assets, and a favourable company profile. Both SLI and  Sunshine Property and Casualty Insurance (SPCI) are considered core subsidiaries of SIG, and their IFS Ratings are based on the group's overall credit profile.

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The group’s consolidated capital strength is anticipated to return to 'strong' levels by 2023-2024, supported by surplus generation and the issuance of $970m (CNY7b) capital supplemental bonds by SLI.

Additionally, the insurer will likely maintain a large holding of high-risk assets for better yield, especially in SLI's portfolio, despite susceptibility to credit and market risks.

SIG's company profile is characterised by a favourable business profile and moderate/favourable corporate governance, driven by solid brand recognition, diversified distribution channels, and evolving financial transparency.

(CNY1.00 = $0.14)