PICC Property and Casualty Co Ltd reported that its 2025 net profit growth slowed to 26%, with total combined ratio improving to 97.5%, driven by declines in auto and nonauto ratios. Auto combined ratio reached 95.3%, while nonauto stood at 100.8%.
According to the reporter from Iris Tan, CFA, Senior Equity Analyst at Morningstar, the weaker-than-expected nonauto margin was largely due to underwriting losses in agricultural insurance, pressured by local government fiscal constraints. Despite this, the company expects modest improvement in 2026 as regulatory expense controls take effect.
Morningstar lowered its fair value estimate for the insurer to HKD 20 from HKD 22, citing cautious management guidance and a forecast for flat 2026 combined ratio. The company projects premium growth aligned with GDP trends, with new energy vehicle and personal nonauto lines as key drivers.
Shares of PICC P&C closed at HKD 14.80 on March 27, 2026, trading at 0.72 times fair value, with a 5% dividend yield. The insurer’s capital strength, scale advantage, and strong risk pricing capabilities are expected to support resilient earnings and dividends.
