Generali China Improves Underwriting Performance While Shifting Toward Riskier Investments

Int’l Desk: Generali China Insurance continues to demonstrate a solid capital foundation despite a modest decline in its solvency ratio as the company pursues higher returning investments, according to a recent assessment by Fitch Ratings.

The insurer, which operates as a subsidiary of the Italian group Assicurazioni Generali, received a substantial capital injection from its parent in July 2025 that significantly bolstered its financial position and provided a stronger buffer for future growth initiatives across the competitive Chinese market.

This funding lifted the comprehensive solvency ratio to 230 percent by the end of 2025, up from 166 percent in the middle of that year. However, the ratio eased slightly to 219 percent by the close of the first quarter of 2026, mainly due to increased market and credit risk charges stemming from new equity investments and greater exposures to reinsurance counterparties.

Fitch Ratings noted that the level remains comfortably above regulatory requirements and positions the company well to support planned premium expansion while managing underwriting volatility in a dynamic environment.

Underwriting performance showed encouraging signs in 2025, with the combined ratio improving to 102 percent from 105 percent the previous year. This progress resulted from reduced catastrophe losses, more selective business writing, and favorable reserve developments following adjustments to reserving methods, even as integration costs related to the transition under Generali ownership partially offset the gains.

Looking ahead, the agency anticipates some challenges as business tied to the former shareholder China National Petroleum Corporation gradually runs off, but overall expects the insurer to maintain disciplined operations.

On the investment side, Generali China has been shifting allocations toward equities and corporate bonds in an effort to enhance returns. The risky asset ratio climbed to 32 percent at the end of the first quarter of 2026 from 24 percent at year-end 2025, yet Fitch views the investment risk as manageable given the portfolio’s continued emphasis on fixed income securities and the protective cushion from the enlarged capital base.

The company wrote around 270 million dollars in gross premiums during 2025, securing a small but established share of China’s non-life market while maintaining operations through seven branches with particular strengths in the energy sector.