PICC Property and Casualty faces renewed catastrophe pressure

First-half profit climbed 32% year on year after a weak first quarter.

PICC Property and Casualty faces higher catastrophe losses and continued pricing pressure in parts of its non-motor business, even after stronger underwriting margins lifted first-half earnings, according to Morningstar.

The insurer’s interim profit rose 32% year on year, rebounding from a 0.5% contraction in the first quarter. 

Its combined ratio improved by 0.8 percentage points to 94%, compared with about 95% amongst peers. The improvement was helped by tighter expense controls and lower catastrophe losses.

Morningstar warned that favourable weather conditions may not continue. It expects catastrophe losses to normalise, which could offset some savings from regulatory controls on non-motor expenses. 

The firm forecasts PICC P&C’s non-motor combined ratio at 99% to 100% between 2026 and 2028, before improving to 98% by 2030.

Premium growth is another risk. Growth slowed to 1.3% in the first half as weaker new vehicle sales affected motor premiums, whilst non-motor growth lagged peers as PICC P&C exited high-loss businesses.

Morningstar forecasts net earned premiums of $80.0b (CNY537.75b) in 2026, up 5.1%, whilst net income is expected to rise 4.8% to $6.3b (CNY42.29b). That would mark a slowdown from 25.5% net income growth in 2025.

($1.00 = CNY6.72)