Reduced capital charges to spur Chinese insurers’ equity investments, Fitch says

Written by Adam Cadle

12/05/2025

China’s reduction in capital charges for equity investments by insurers is likely to drive them to increase their equity holdings, Fitch Ratings has stated.

The State Council Information Office recently said the capital charge for equity investments used to calculate the solvency ratio will be reduced by 10%, which decreases capital requirements for insurers.

Life insurers’ equity investments, which include stocks and long-term equity investments, comprised 15.3% of invested assets, while that of non-life insurers accounted for 13.5% at end-2024.

At end-Q4 2024, the comprehensive C-ROSS ratios for life and non-life insurers were 191% and 239%, respectively, reflecting an increase of 2pp and 7pp compared to the previous quarter.

“We expect the solvency ratios to remain stable in the short term, aided by the 10% cut in capital charge on equity investments,” Fitch said.

“However, we think that insurers' capital buffers will continue to be under pressure as the companies try to sustain business growth while their financial performance may be more volatile over the long term, given the potential increase in equity assets."

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