Moody's: Decline in life insurance solvency mainly due to increased allocation to equity assets

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**  [Caixin]** Recently, solvency pressure has once again become a focus of attention in the life insurance industry.

A report released by rating agency Moody's shows that although Chinese life insurance companies still maintain a buffer above the regulatory minimum capital requirements, their solvency adequacy ratio has shown signs of weakening since the third quarter of 2025. In the second half of 2025, both the comprehensive and core solvency adequacy ratios based on the "Solvency II" framework decreased by more than 20 percentage points, mainly driven by increased equity allocations. Additionally, the persistently low government bond yields continue to pressure industry solvency indicators, as increased reserve requirements lead to a reduction in actual capital.

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