China Reinsurance, the report card is out! How much does the Middle East conflict impact business? Company responds

“The company has no risk exposure in the Iran region, and the overall direct risk exposure in the Middle East is relatively low. In the short term, it will not have a material impact on the Group’s overall claims and payouts. After the outbreak of the conflict, each overseas business platform took the necessary underwriting and risk-control measures in the first instance, and is ready to further adjust its underwriting strategy at any time in line with developments in the situation.”

On March 31, at China Re’s 2025 annual performance briefing in China, when Wang Zhongyao, General Manager of China Re Property & Casualty, responded to the impact of the Middle East military conflict on the company’s business, he said that following an initial comprehensive assessment, the overall impact is currently controllable.

China Re is the Chinese insurance institution with the highest degree of internationalization. In simple terms, what it does is “insurance for insurance,” and its business covers both within and outside China. Last June, the Group was recognized by the International Association of Insurance Supervisors and the National Financial Regulatory Administration as the first domestically based “internationally active insurance group.” The Group’s subsidiaries include China Re Property & Casualty, China Re Life, China Re Life (Hong Kong), Dadi Insurance, China Re Asset, the Qiao Society, and the Singapore branch, among others.

Wang Zhongyao further said that if the conflict expands or becomes protracted and leads to a sharp rise in international oil, fertilizers, and other prices, thereby pushing up inflation, it will indirectly affect the trend of the international insurance and reinsurance market. The company will continue to track developments in the conflict and potential losses, and dynamically handle risk responses. At the same time, the company will base itself on the Belt and Road Initiative, continue to follow up on the protection needs of Chinese companies going global, and play the role of reinsurance as a “national team.”

In addition to the property reinsurance business, the Group also addressed the impact on its investment business.

China Re’s Chief Investment Officer and Chairman of China Re Asset, Li Wei, said that currently, China Re’s overseas investments are mainly high-grade fixed-income investments. For holdings involving the Middle East region, the issuers are all sovereign- and government-backed entities rated A+. They account for a relatively low proportion of total invested assets; credit risk is controllable, and overall direct exposure is limited.

Li Wei said that with recent market volatility intensifying, the company further strengthens the frequency of risk monitoring and assessment, uses dynamic evaluation methods such as stress testing and scenario simulation, and ensures that exposures to all types of risks are generally controllable. At present, the overall portfolio operation is stable, and risks are within the controllable range.

“Looking ahead, we will adhere to the principle of making progress while ensuring stability, closely track how geopolitical developments evolve, assess the potential medium- to long-term impacts on the macro environment and major asset classes, and maintain flexibility in allocation. By focusing on certainty of returns, we will stabilize the core business, strengthen risk management, and enhance the resilience of the portfolio,” Li Wei said.

“For reinsurance enterprises that diversify risk globally and operate their business, geopolitics is an important risk factor that cannot be ignored.” Zhuang Qianzhi, Chairman of China Re, introduced the Group’s measures to address geopolitical risk: first, adhere to the bottom line while seizing opportunities, and continue to promote international development; second, enhance international management capabilities and consolidate the foundation for international operations; third, build a risk-control closed loop and strictly observe the bottom line for geopolitical risk.

Zhuang Qianzhi said that China Re will closely track the trends in geopolitical risk changes, strengthen risk judgments, conduct regular monitoring in key risk areas, continuously improve contingency plans, and optimize the geopolitical risk management framework. Meanwhile, it will further strengthen communication and exchanges with international peer institutions to stay abreast of the latest risk developments in international markets, take targeted measures, and effectively safeguard the steady development of international business.

Recently, China Re disclosed its 2025 annual report. The 2025 results show that operating revenue was 124.929 billion yuan, up 5.8%; total premium income was 180.368 billion yuan, up 1.1%; attributable net profit was 9.771 billion yuan, down 7.4%; and the weighted average return on net assets was 9.18%, down 1.56 percentage points.

Regarding the decline in profitability, China Re explains in the annual report that the main reasons are: “based on the macro environment and market changes, we prudently assess our assets and liabilities, further enhancing the resilience of sustainable growth.”

By the end of 2025, China Re Group’s total invested assets balance was 4620.63 billion yuan, up 4.1% from the end of the previous year. In 2025, total investment income was 182.49 billion yuan, up 4.9% year over year; the total investment yield was 4.66%, down slightly by 0.17 percentage points year over year, remaining relatively stable overall; the net investment yield reflecting interest-type income decreased by 0.27 percentage points to 3.69%, which is at a relatively high level among listed insurers.

Layout: Liu Junyu

Proofreading: Lü Jiubiao