Zhongyuan Agricultural Insurance Co. (ZYIC), based in China, has reported a continued improvement in its financial performance, driven by enhanced underwriting results, a refined risk-selection strategy, and effective cost control measures, according to Fitch Ratings.
The company’s combined ratio improved to 92.5% in 2024, down from 94.6% in 2023, with a three-year average of 91.2% from 2022 to 2024. This reflects ZYIC’s ongoing efforts to refine its risk management approach.
In addition, investment income contributed to a boost in the company’s return on equity, rising to 8.2% in 2024 from 7.0% in the previous year.
ZYIC’s capital position remains strong, bolstered by a $320 million (RMB 2.3 billion) equity capital injection in 2023. Fitch forecasts the company’s capital position will remain resilient over the next two to three years.
The company’s regulatory comprehensive solvency ratio saw a slight decline, dropping to 430% at the end of 2024, down from 488% in 2023. However, this figure remains well above the regulatory minimum requirement of 100%.
Fitch also highlighted the continued support from the Henan provincial government, which holds stakes in ZYIC through state-owned entities.
While ZYIC remains exposed to risks associated with agricultural insurance, particularly from catastrophes, it is expected to maintain its reinsurance strategy to manage potential claims volatility. Agricultural insurance continues to represent a significant portion of the company’s business, accounting for 77% of its gross premiums in 2024. Fitch anticipates steady growth in this segment over the coming years.
(Note: The exchange rate used is $1.00 = RMB 7.27.)
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