AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of China Shipowners Mutual Assurance Association (China P&I or the Club) (China). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect China P&I’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.
AM Best expects China P&I’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the strongest level over the short to intermediate term, supported by very low underwriting leverage and consistent earnings retention. The Club’s consolidated capital and surplus (C&S) decreased moderately in 2025, primarily due to a downward revaluation of its long-term equity investments in the China Minsheng Banking Corp., Ltd (CMBC). The adjustment highlights the Club’s capital sensitivity to its concentrated exposure to this investment, although the overall impact is assessed as moderate and non‑recurring. Excluding this investment exposure, the Club’s C&S compares favourably with the upper tier of the International Group P&I Clubs. AM Best expects the Club’s prudent reserving practices for long‑tail protection and indemnity (P&I) liabilities and its well-structured reinsurance programme to remain supportive of its strongest level of balance sheet strength assessment. China P&I’s liquidity profile remains strong.
China P&I reported a sizeable net loss in 2025, mainly stemming from the revaluation of its long-term equity investments. The loss was partially offset by stable recurring investment income and unrealised capital gains. The Club’s underwriting profitability has marginally improved, supported by favourable loss experiences. Going forward, AM Best expects the Club’s recurring investment income to remain the key stabilising source of operating earnings, helping to moderate underwriting volatility. AM Best also expects the Club’s prospective growth in reported capital to be moderate and primarily driven by its retained operating earnings, including recurring dividend income from the CMBC investment, while the carrying value of the investment will remain unchanged.
Established in 1984, as a mutual association, the Club has become a leading player in the China P&I market and is one of the major hull insurance providers in the country. The Club’s underwriting portfolio has remained stable with a focus on the domestic market of ocean-going vessels owned by Chinese shipowners. China P&I continues to explore opportunities in overseas markets, such as Southeast Asia to diversify its member base. In addition, the Club continues to leverage its long-term business partnerships with several international groups of P&I clubs in areas such as reinsurance support, loss prevention, claims services, product development, local knowledge, as well as professional networks.
Negative rating actions may arise if China P&I’s operating performance demonstrates a persistent deteriorating trend. Positive rating actions may occur if the Club achieves material and sustained enhancement in its global market presence over the intermediate term, while continuing to strengthen its leadership position in the domestic market. Negative rating pressure could also follow a weakening of the Club’s balance sheet strength fundamentals, as a result of a decline in its risk-adjusted capitalisation.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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