AM Best affirms the financial strength rating of ‘A’ (Excellent) and the long-term issuer credit rating of ‘a’ (Excellent) of COSCO Shipping Captive Insurance Co Ltd, the Chinese captive of shipping group China COSCO Shipping Corporation. The outlook of the ratings is ‘stable’. The ratings reflect the captive’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. They also reflect its position as a strategically important member of its parent, and the support the group provides across business development, risk management, management and capital. Balance sheet strength is underpinned by risk-adjusted capitalisation well above AM Best’s minimum requirement for the strongest assessment level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment also considers very low underwriting leverage, a conservative investment strategy and a comprehensive reinsurance programme. The captive has delivered positive earnings every year since 2017 and achieved an average return on equity of 5.3 per cent over the five years to 2025. Underwriting performance benefits from the stable premium contribution of the marine hull business, favourable reinsurance commission income and low acquisition costs, offset by marginal net loss experience arising from a small net earned premium base. Investment performance remained stable, with a net investment yield including capital gains of 2.9 per cent in 2025. The captive maintains a conservative investment appetite focused on fixed-income assets. Its underwriting book consists primarily of marine hull business for the parent group and its affiliates, with other lines covering liability, commercial property, cargo, motor, and accident and health. The captive uses direct and internal broker channels to serve the group’s insurance needs. Negative rating actions could occur if there is a material deterioration in operating performance, a reduced level of support from the parent, or a significant deterioration in the parent’s financial strength or credit profile. Positive rating actions may occur if the captive demonstrates sustained and favourable operating performance while supporting its current business profile assessment.
