Mitsui Sumitomo Insurance China (MSI China) is poised to maintain its stability and significance within the MS&AD Insurance group, according to S&P Global Ratings.
MSI China, a key component of the MS&AD Insurance group, is expected to sustain its strategic importance over the next two years, as detailed by S&P Global Ratings. The insurer plays a crucial role in the group’s international strategy, particularly through its services to Japanese companies operating in China.
S&P Global highlighted MSI China’s importance, noting that it benefits from substantial support from its parent company. This includes business referrals, underwriting expertise, reinsurance arrangements, digital capabilities, and robust risk management and governance structures.
Although MSI China contributes only a small fraction to the group’s total net assets and profits—0.5% and 1.0%, respectively—the insurer remains deeply integrated with the parent group. As a result, it is unlikely to be divested.
The insurer’s Japanese-related business, which represents 83% of its portfolio, is anticipated to continue driving its underwriting profits. Despite potential challenges in 2024, particularly with thinner underwriting profits in liability business lines, MSI China has demonstrated a history of stable profits. In 2023, it achieved a net combined ratio of 93.5%.
Looking ahead, MSI China is expected to sustain satisfactory capital buffers and maintain healthy regulatory solvency levels. As of June 2024, the insurer’s comprehensive and core solvency ratios were 289.7% and 243.0%, respectively. Additionally, MSI China distributed $13.0 million (RMB 94 million) in dividends in 2023.
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