Recently, Moody's Investors Service announced that it maintained the insurance financial strength rating (IFSR) of A2 of New China Life Insurance Co., Ltd. (hereinafter referred to as "New China Insurance"), and granted A3 Basic Credit Assessment (BCA), while maintaining a stable outlook for New China Insurance.
According to Moody's, the rating action was taken after Moody's issued an updated GRI (**related issuer) rating methodology. Moody's has expanded the coverage of the updated rating methodology to include certain key state-owned enterprises (SOEs) that are indirectly owned by ** as GRIs. The inclusion of New China Insurance in the GRI reflects Moody's belief that the company meets these criteria, as New China Insurance is a strategically important entity to China and holds a 32% effective stake in the company through the state-owned investment holding company, Huijin Investment Co., Ltd. (Huijin), making it the largest shareholder of New China Insurance.
Moody's noted that New China Insurance A3's BCA reflects its solid market brand, strong profitability and track record. As one of the most well-known life insurance companies in China, New China Insurance is well-capitalized and has one of the highest solvency adequacy ratios among its peers. Moody's expects New China Insurance's solvency ratio to remain strong as the company has maintained a strong capital base through retained earnings over the past few years to support the company's growth. New China Insurance has a track record of maintaining good investment performance and overall profitability, with a 5-year average return on capital of 13%.