China-based Urtrust Insurance Co. Ltd. saw its profitability rebound in 2024, reporting a 1.5% return on equity (RoE) from a 2.1% loss in the previous year, driven by stronger investment income and tighter expense efficiency.
On the back of this recovery, Fitch Ratings upgraded Urtrust’s insurer financial strength (IFS) rating to ‘BBB+’ from ‘BBB’ on September 18, with a stable outlook, citing an improved company profile supported by capital strength and closer integration with parent company Guangzhou Automobile Group Co. (GAC).
Fitch said underwriting results are also set to continue to improve gradually, with the combined ratio dropping to 99.1% in 1H25, compared with a three-year average of 101.3% between 2022 and 2024. The agency highlighted greater premium adequacy, stricter risk selection, and enhanced pricing in new energy vehicle motor insurance, supported by synergies with GAC’s motor insurance franchise.
This outlook aligns with a forecast by GlobalData, which projected higher premiums on electric vehicles and hybrids through 2028, driven by costly batteries and spare parts.
However, Fitch cautioned that Urtrust’s profitability “remains vulnerable to volatile investment returns due to higher exposure to equity markets.” Risky assets climbed year-over-year to 69% of shareholder equity at the end of H1 2025 from 43% as the insurer shifted its portfolio. Given China’s low interest rates, the group is expected to increase its equity asset allocation to boost yields, focusing on high-dividend stocks eligible for comprehensive income classification.
Despite the higher risk profile, Urtrust’s risk-based capitalisation remains solid, Fitch said. Its Fitch Prism Global Model score eased to the ‘Very Strong’ category by mid-2025 from ‘Extremely Strong’ at end-2024, while its solvency ratio dropped to 374% from 481% but stayed well above the 100% regulatory minimum. The decline was due primarily to higher market risk from increased exposure to equity-type investments and a higher risk charge applied as a penalty for motor insurance growth exceeding the industry average.
Overall, Fitch described Urtrust’s profile as improving, aided by parent-group distribution through GAC’s 4S stores, municipal government initiatives, and overseas expansion.
In a June report, Fitch Ratings noted that the Chinese non-life insurance sector is entering a stable second half of 2025, as reflected in strong growth across motor, accident, and health premiums.
