Fitch Ratings late Wednesday downgraded the financial strength and issuer ratings of five Chinese insurers: China Export & Credit Insurance Corporation (SINOSURE), China Taiping Insurance Group Ltd. (TPG), China Taiping Insurance Group (HK) Company Limited, China Taiping Insurance Holdings Company Limited (CTIH), and Taiping Life Insurance Company Limited (TPL). The ratings for all entities now carry a ‘Stable’ outlook.
The rating agency concurrently affirmed the rating of China Life Insurance Company Limited, also with a ‘Stable’ outlook.
The downgrades come after Fitch lowered China’s Long-Term Foreign-Currency Issuer Default Rating (IDR) on 3 April 2025 from ‘A+’ to ‘A’, reflecting concerns over the sovereign’s credit profile amid rising public debt and fiscal pressures.
“The downgrades of the five insurers follow the downgrade of China’s sovereign rating, as the insurers’ ratings incorporate various degrees of government support due to their ownership links with the central government,” Fitch said. “We believe the government’s ability to support these insurers has weakened.”
SINOSURE’s Insurer Financial Strength (IFS) Rating was downgraded from ‘A+’ to ‘A’ following the sovereign downgrade. The insurer is heavily linked to the government through its ownership by China’s Ministry of Finance and Central Huijin Investment Ltd., a subsidiary of the sovereign wealth fund, China Investment Corporation.
Fitch’s assessment recognised SINOSURE’s policy-driven role in supporting China’s export trade. However, the government’s reduced capacity to provide financial support was a key factor driving the downgrade, the rating agency said.
China Taiping Insurance Group and its subsidiaries – China Taiping Insurance Group (HK) Company Limited, China Taiping Insurance Holdings Company Limited, and Taiping Life Insurance Company Limited – all saw their ratings downgraded by one notch, with TPG’s Long-Term IDR moving from ‘A’ to ‘A-‘.
Fitch incorporated government support into the group’s ratings, reflecting its ownership by the Ministry of Finance, which holds a 90.7% stake in the company. The downgrade mirrors China’s sovereign downgrade, as Fitch believes the government’s ability to provide financial assistance to TPG has weakened. Nonetheless, the insurer remains strategically important due to its historical record of receiving state support, Fitch said.
Meanwhile, China Life Insurance Company Limited’s IFS Rating was affirmed at ‘A+’. Fitch highlighted the insurer’s robust standalone financial position, which the rating agency sees as resilient to the sovereign rating changes, as well as its ‘Most Favourable’ company profile and ‘Very Strong’ financial performance supported the affirmation.
“Our perception of the insurer’s significance in China’s life sector, holding the country’s largest policyholder base, remains unchanged,” Fitch said.
Impact on insurers’ asset risks limited, but equity exposure remains a pressure
Across all of the insurers, Fitch noted that the sovereign downgrade had limited impacts on their asset risk profiles despite significant allocations to Chinese government bonds. The insurers continue to face pressure from their exposure to equity-type risky assets, which drives lower investment and asset risk scores compared to the sovereign rating.
Fitch’s sovereign downgrade comes amid rising public debt and fiscal pressures, with the rating agency expecting the government debt-to-GDP ratio to increase sharply, reaching 68.3% in 2025, up from 60.9% in 2024 and 37.9% in 2019. This surge, along with high deficit levels, subdued economic growth, and the crystallisation of contingent liabilities, has weakened China’s public finances, the rating agency said.
Moreover, trade tensions with the United States, including escalating tariffs, have compounded these challenges. President Trump’s imposition of a now 125% tariff on Chinese goods, effective 9 April 2025, adds pressure to China’s economy by raising the cost of exports and disrupting global supply chains.
In response to global financial turbulence, China has implemented several insurance-related measures to stabilise its capital markets.
This week, the National Financial Regulatory Administration (NFRA) raised the equity investment cap by 5 percentage points for some insurers. Earlier this month, China urged insurers to set up private fund firms to channel long-term investments into the stock market. In January, regulators also encouraged state-owned insurers to allocate 30% of new premiums to A-shares.
