巴黎人娱乐城

巴黎人娱乐城 - Hong Kong - 28 Apr 2025: 巴黎人娱乐城 has affirmed the Insurer Financial Strength (IFS) Rating on China United Property Insurance Company Limited (CUPI) at 'BBB+'. The Outlook is Stable.

The rating affirmation reflects the insurer's improved capital position, profitable underwriting performance and 'Favourable' business profile despite higher exposure to risky assets.

Key Rating Drivers

Improved Capital Position: We expect CUPI's enhanced risk-based capital buffer to support its moderate business expansion and rising asset risk. CUPI's risk-based capital strength, as measured by the 巴黎人娱乐城 Global Prism Model, improved to 'Adequate' in 2024, following a CNY6 billion capital supplementary issuance in December 2024. The comprehensive solvency ratio rose to 228% by end-2024, from 196% at end-2023, exceeding the 180% benchmark required to conduct its agricultural insurance business. The core solvency ratio decreased to 137% from 156%, after a dividend payout of CNY1.46 billion in 2024.

The financial leverage ratio rose to 30.8% (end-2023: 9.8%) following the bond issuance, but this remains commensurate with the rating.

Profitable Underwriting: 巴黎人娱乐城 expects the company to maintain a stable underwriting margin by opting out of higher volatility business and continuing to enhance its risk-selection capability. CUPI's combined ratio improved to 99.4% in 2024, from 100.1% in 2023. The consistent reduction in the expense ratio offsets CUPI's volatile loss ratio, driven by increasingly frequent natural catastrophes. CUPI reported better performance, with ROE rising to 5.2% in 2024 (2023: 3.7%), despite lower investment returns in China's prolonged low interest-rate environment and continued fair value losses in financial assets due to falling equity markets.

Sustained Market Position: CUPI's company profile reflects a 'Favourable' business profile and 'Neutral' corporate governance, compared with that of other non-life insurers in China. This takes into consideration its established brand recognition, favourable operating scale, diversified business mix and geographical reach in China. CUPI had a 4.0% share of the domestic non-life market by premiums in 2024 and remained one of the leading agricultural insurance providers, accounting for 12% of market direct premiums.

Higher Risky-Asset Exposure: We expect the company to further raise its holdings of equity assets, making its capitalisation susceptible to swings in the economic environment. 巴黎人娱乐城-defined risky assets were equivalent to 74% of shareholders' capital at end-2024 (end-2023: 69%). It has new non-performing investments in 2024, primarily trust plans with underlying assets tied to the property sector. Potential asset impairment losses, amid increasing counterparty risk from the country's real estate woes, could add more volatility to its financial performance.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

- Prism score falling to below the 'Adequate' category for a prolonged period;

- Weakening in financial performance, such that the ROE is below 4% and the combined ratio is above 105% for a prolonged period.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

- Prism score improving to the 'Strong' level for a sustained period;

- Stronger profitability, including the ROE above 5.5% and the combined ratio below 102%, for a sustained period.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. 巴黎人娱乐城's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on 巴黎人娱乐城's ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.

Additional information is available on

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Prism Global (ex-U.S.) Model, v1.8.1 (1)

ADDITIONAL DISCLOSURES

• Dodd-Frank Rating Information Disclosure Form
• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS