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A Prediction-Oriented Analysis of Solvency Adequacy in Property Insurance Companies under China’s C-ROSS II Framework

In: Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026)

Author

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  • Jingcheng Zhao

    (Hunan University, School of Finance and Statistics)

Abstract

Under the risk-oriented regulatory framework, solvency adequacy has become a core indicator of the financial stability of insurance companies. Using panel data of Chinese property insurance companies from 2017 to 2024, this paper empirically examines the determinants of solvency adequacy under the implementation of the C-ROSS II regulatory regime. A fixed-effects panel model is employed to control for unobserved firm heterogeneity and time-invariant characteristics. The results show that underwriting profitability and investment returns significantly enhance solvency adequacy, while higher loss ratios exert a negative effect. Excessive reliance on reinsurance may weaken capital accumulation and constrain solvency levels. In addition, changes in the regulatory framework, captured by a regulatory dummy variable, have a significant impact on insurers’ solvency positions. These findings highlight the joint role of firm-level operations, asset allocation, and regulatory constraints in shaping solvency adequacy, and provide empirical evidence for understanding insurers’ capital management under the evolving regulatory environment.

Suggested Citation

  • Jingcheng Zhao, 2026. "A Prediction-Oriented Analysis of Solvency Adequacy in Property Insurance Companies under China’s C-ROSS II Framework," Advances in Economics, Business and Management Research, in: Joanna Rak & Md Rabiul Islam & Noralina Omar & Dragana Ostic (ed.), Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026), pages 862-872, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6239-701-9_89
    DOI: 10.2991/978-94-6239-701-9_89
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