Fitch Ratings has raised concerns over China Export & Credit Insurance Corporation’s (SINOSURE) exposure to riskier assets, despite the company’s strong position in the export credit insurance market. The ratings agency has maintained a negative outlook for SINOSURE, citing its policy-driven role in supporting China’s export activities and its government ownership.
Owned jointly by the Ministry of Finance and Central Huijin Investment Ltd, SINOSURE plays a critical role in covering risks associated with overseas trade and investment. Fitch expects the company to maintain its nationwide presence, continuing its stabilizing role in foreign trade.
While SINOSURE’s capitalization is projected to remain adequate for underwriting expansion and risk management, its investment returns remain a key driver of earnings. Higher investment income and reduced unrealized foreign currency losses have contributed to improved profits in 2023. However, Fitch notes that underwriting earnings are expected to remain modest due to the company’s policy-oriented mandate.
Following a conservative investment strategy, SINOSURE holds a significant portion of its assets in cash, term deposits, and bonds. As of the end of 2023, exposure to riskier assets was limited to approximately 27% of the company’s equity capital.
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