China Shipowners Mutual Assurance Association (China P&I) reported a sizeable net loss in 2025 after a downward revaluation of its long-term equity investment in China Minsheng Banking Corp., Ltd, even as its underwriting profitability marginally improved.
AM Best affirmed China P&I’s Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent). The outlook for both ratings is stable.
On underwriting, AM Best said China P&I’s profitability “has marginally improved, supported by favourable loss experiences”. The agency expects recurring investment income to remain the main stabilising source of operating earnings, helping to moderate underwriting volatility.
The Club’s prudent reserving practices for long-tail protection and indemnity liabilities remain supportive of its balance sheet strength assessment, AM Best said. Its “well-structured reinsurance programme” is also expected to remain a positive factor.
China P&I continues to work with several international groups of P&I clubs across reinsurance support, loss prevention, claims services, product development, local knowledge and professional networks.
Overall operating performance was weighed down by the 2025 net loss, which AM Best said mainly stemmed from the revaluation of the Club’s long-term equity investments. The loss was partly offset by stable recurring investment income and unrealised capital gains.
The ratings agency expects prospective growth in reported capital to be moderate, driven mainly by retained operating earnings, including recurring dividend income from the CMBC investment.
The revaluation of the CMBC investment caused China P&I’s consolidated capital and surplus to decrease moderately in 2025. AM Best said the adjustment highlights the Club’s capital sensitivity to its concentrated exposure to the investment, although the overall impact is considered moderate and non-recurring.
The carrying value of the CMBC investment is expected to remain unchanged.
Additionally, AM Best expects China P&I’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, to remain at the strongest level over the short to intermediate term. The assessment is supported by very low underwriting leverage and consistent earnings retention.
Excluding the CMBC exposure, the Club’s capital and surplus compares favourably with the upper tier of the International Group P&I Clubs, according to the rater. China P&I’s liquidity profile also remains strong.
China P&I continues to explore opportunities in overseas markets, including Southeast Asia, as it looks to diversify its member base.
Established in 1984, China P&I is a mutual association and a leading player in China’s P&I market. It is also one of the country’s major hull insurance providers, with a stable underwriting portfolio focused on the domestic market of ocean-going vessels owned by Chinese shipowners.
