AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Qianhai Reinsurance Co., Ltd. (QHR) (China). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect QHR’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

QHR’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level at year-end 2024. Based on the unaudited financial results, QHR’s capital and surplus recorded single-digit growth rates in 2024 and during the first three quarters of 2025, reaching RMB 3.97 billion (USD 543 million) as of 30 September 2025, underpinned by the company’s full retention of net profit. The company has a diversified investment portfolio that is focused on cash and fixed-income securities, albeit with a moderate exposure to debt-type alternative investments.

QHR has been profitable in each financial year since 2019, with a five-year average return-on-equity ratio of 4.9% (2020-2024). The company reported a net profit of RMB 161 million in 2024, due to capital market performance and investment valuations, which led to a growth in investment income. The company remained profitable during the first nine months of 2025. AM Best expects that the company’s net retained loss from the recent major fire at Wang Fuk Court, a residential complex in Hong Kong’s northern district of Tai Po, will be manageable for QHR, supporting the adequate operating performance assessment.

The life reinsurance segment remains a major driver of QHR’s underwriting performance, which accounts for approximately three-quarters of total gross premium written; however, business scale has declined since 2023, due to the downsizing of financial reinsurance business reflecting changes in regulations and market demand. QHR continues to commit resources and strengthen its business relationships with China insurers and distribution partners to tap growth potential in traditional protection products.

In terms of non-life reinsurance, the company’s underwriting portfolio is diversified by product line with a focus on China’s non-catastrophe proportional risks and it maintains a prudent approach on its overseas book to maintain quality. QHR’s non-life segment combined ratio improved in 2024, partially attributed to hardened rates in key product lines including commercial property and agriculture, as well as the continued risk-selective strategy. Interest income from deposits, coupled with returns from bonds, equities and financial products, has continued to support QHR’s overall investment results over the past nine years.

QHR is a composite reinsurer controlled by three Chinese state-owned enterprises and plays a strategic role in the development of the Qianhai Free Trade Zone. Over the past few years, the company has continued to strengthen its market presence, while maintaining a profit-driven underwriting strategy.

Negative rating actions could occur if QHR’s risk-adjusted capitalisation declines significantly. Negative rating actions also could occur if the company demonstrates a sustained and adverse deterioration in its operating performance. Positive rating actions could arise if QHR’s domestic and overseas underwriting portfolios demonstrate sustained and favourable operating results that strengthen its overall operating performance, while its very strong balance sheet strength remains unchallenged.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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