Financial Performance Overview
Sunshine Insurance Group Co Ltd has announced its comprehensive financial results for the 2024 fiscal year. The company achieved a net profit of RMB 5.45 billion, a significant increase from RMB 3.74 billion in 2023. The basic and diluted earnings per share from ongoing operations were both recorded at RMB 0.47, compared to RMB 0.32 in the prior year.
Company Background
Established in 2005 and based in Beijing, Sunshine Insurance Group operates across multiple financial sectors, including property and casualty insurance, life insurance, credit and guarantee insurance, asset management, and healthcare. The group also owns international assets, such as the prestigious Baccarat Hotel in New York City.
Fitch Ratings and Financial Metrics
In January, Fitch Ratings reaffirmed the Insurer Financial Strength (IFS) ratings of Sunshine Life Insurance Corporation Limited and Sunshine Property and Casualty Insurance Company Limited at an impressive ‘A-‘. Sunshine Life’s Long-Term Issuer Default Rating and senior unsecured debt were also maintained at ‘BBB+’, with a Stable Outlook. Fitch cited the group’s solid capital position, financial metrics, and diversified operations as key strengths.
Capital Adequacy and Solvency Ratios
The group’s consolidated capital adequacy remained robust at a ‘Strong’ level under the Fitch Prism model as of mid-2024. However, this margin has slightly decreased since 2023 due to increased asset risk and business expansion. By midyear, the financial leverage ratio was at 29%, with RMB 5 billion available for further bond issuance.
Sunshine Life’s solvency ratio improved to 204% by the end of the third quarter, rising from 183% at the end of 2023, following a capital boost from the holding company. Conversely, the P&C unit’s solvency ratio slightly decreased to 242% from 245%.
Life Insurance and P&C Divisions
The life insurance sector experienced a 40% year-over-year rise in new business value during the first half of 2024, driven by revised commission structures and a focus on core distribution channels. Operating income before tax, inclusive of investment gains, surged by nearly 80% year-over-year to RMB 5.21 billion. However, return on equity only modestly increased to 14.8%, due to higher tax costs stemming from accounting changes.
In contrast, the P&C division reported a combined ratio of 99.2% for the first half, up from 98.3% the previous year. This increase was attributed to higher claims from weather-related events like snowstorms and typhoons in high-premium regions. The division’s return on equity decreased to 6.2% from 11% year-on-year.
Market Position and Investment Strategy
Fitch highlighted the group’s continued exposure to equity markets, as it maintains a substantial portion of equity investments amid China’s persistently low interest rates. Risk-adjusted equity exposures at Sunshine Life accounted for 169% of total equity by the end of 2023, up from 161% previously. For Sunshine P&C, the ratio decreased to 128% from 151%, reflecting a strategic shift toward government securities.
Sunshine Insurance Group’s position in the domestic market is bolstered by its multi-line structure, established distribution networks, and growing agent productivity. These elements contribute to a balanced operating profile, supporting the group’s competitive presence in China’s insurance sector.
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