Fitch downgrades ratings of five Chinese insurers, affirms one

Investing.com -- Fitch Ratings has lowered the ratings of five Chinese insurance companies and maintained the rating of one. The ratings outlook remains stable following these actions.

On Wednesday, April 9, 2025, Fitch announced that it had downgraded the Insurer Financial Strength (IFS) Rating of China Export & Credit Insurance Corporation (SINOSURE) to 'A' from 'A+'. The Long-Term Issuer Default Rating (IDR) of China Taiping Insurance Group Ltd. (TPG), China Taiping Insurance Group (HK) Company Limited, and China Taiping Insurance Holdings Company Limited (CTIH) was lowered to 'A-' from 'A'. The IFS Rating of Taiping Life Insurance (NSE:LIFI) Company Limited (TPL) was also downgraded to 'A' from 'A+'.

These downgrades follow the April 3, 2025, downgrade of China's Long-Term Foreign-Currency IDR to 'A' from 'A+'.

Fitch affirmed the IFS Rating of China Life Insurance Company (OTC:LFCHY) Limited at 'A+'. The ratings of these insurers are influenced by varying degrees of government support due to their ownership links with the central government. Fitch believes the government's ability to support these insurers has weakened, leading to the downgrades.

SINOSURE's downgrade reflects its ownership links with China's Ministry of Finance and Central Huijin Investment Ltd, a wholly-owned subsidiary of the sovereign wealth fund, China Investment Corporation. The insurer's rating recognizes its role in supporting China's export trading activities.

China Life's rating, on the other hand, was affirmed due to its resilient standalone credit profile, which Fitch believes can withstand the effects of the deterioration of the sovereign's credit profile.

The downgrades of TPG and its subsidiaries mirror the downgrade of the China sovereign rating, as these ratings incorporate government support via its ownership. The ratings benefit from a one-notch uplift from the insurers' standalone credit quality, as Fitch believes that the government would provide support to the group, if needed.

The ratings of these insurers could further downgrade if China's sovereign rating is negatively affected or if there's a significant change in the insurers' shareholding structure resulting in the central government losing its controlling stake.

On the other hand, the ratings could be upgraded if there's a positive rating action on China's Long-Term Local-Currency IDR or if there's a significant improvement in the insurers' Prism score and their consolidated financial leverage ratio remains below 24% for a sustained period.

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