Floating loss of other comprehensive income exceeds 4.1 billion yuan
In the report, CBRC pointed out that: in the tracking period, the scale of 100 year life insurance premiums increased steadily and the quality of insurance policies remained stable; the overall operational risk was low, the profitability remained stable, the liquidity risk was controllable, the solvency continued to approach the regulatory red line, the equity change and subsequent capital increase faced great uncertainty, the capital supplement pressure was great, and the overall financial risk was low; the company The equity is decentralized and external support has no obvious credit enhancement effect. Combined with these factors, its rating has been adjusted as above.
The data shows that by the end of the third quarter of 2019, the investment assets of Centennial life were 110.466 billion yuan, an increase of 27.33% over the end of the previous year, the proportion of fixed income assets increased from 47.51% to 54.74%, and the proportion of real estate and other financial assets decreased. By the end of the three quarters of 2019, the other comprehensive income of Centennial life is -41.41 billion yuan, and the floating loss scale is large, so we need to pay attention to the impact on future investment income. The above report indicates.
Since 2016, the loss of other comprehensive income of 100 year life insurance has been increasing year by year. From 2016 to 2018, the companys other comprehensive income was - 540 million yuan, - 1.8 billion yuan and - 5.09 billion yuan respectively, and it was - 4.141 billion yuan at the end of the third quarter of 2019.
In this regard, Centennial life analyzed in the issuance announcement of capital supplementary bonds that: on the one hand, from 2016 to the first half of 2018, the equity assets held by the company generated more floating losses, which were recorded in the other comprehensive income subject according to the accounting standards, resulting in the negative number of other comprehensive income increasing year by year; on the other hand, most of the stocks invested by Centennial life mainly adopted the licensing party In the process of market decline, we cannot reduce our holdings according to regulatory requirements.
Centennial life mentioned in the announcement that it had invested in such high-quality private enterprises as Wanfeng Aowei and Shengli precision before 2016, but the difficulties faced by the enterprises in the past two years were reflected in the stock price, so the equity investment it invested in suffered some floating losses. In addition, Centennial life said that the lack of effective risk hedging mechanism and relevant professional experience is one of the reasons for the loss of investment income.
Many twists and turns in equity change
It is one of the characteristics of the development of Centennial life insurance in recent years that the equity is scattered and many equity transfers have taken place. At present, there are still many equity transfers that have not been officially implemented in the company, which also add uncertain factors to its future development.
Previously, Dalian Wanda Group, the largest shareholder of Centennial life, intended to transfer all of its 900 million shares (11.55%). However, the first transfer in 2019 failed, and the original intended recipient, Lvcheng real estate, announced the termination of the acquisition.
According to the report of China national debt and credit, at present, the 800 million shares of the company held by its second largest shareholder (juxtaposed) Xinguang holdings are all frozen, because Xinguang Holdings has its own debt problems.
At the same time, Kerui group, the second largest shareholder of the company, plans to transfer its 700 million shares, and Aoyuan group plans to transfer 1.08 billion shares of century life from three shareholders including Dalian urban construction group. At present, all these matters are in progress.
On the whole, the companys equity change is large, and the future equity change is still uncertain. The equity change will have an impact on the composition of the companys board of directors and strategic planning, or indirectly affect the stability of the management team. China debt credit pointed out.
As for the solvency adequacy ratio continuing to approach the regulatory red line, CBRC pointed out that the company plans to adopt reinsurance to improve its solvency, which has great pressure on capital replenishment. However, due to the slow progress of equity change, the future capital increase is facing uncertainty. Century life has also tried to supplement about 5 billion yuan of capital by introducing strategic investors, but so far the matter has not been implemented.
In addition, in October 2019, the insurance regulator settled in Centennial life to check its problems in equity and capital investment. At present, there is no public information about the inspection results.
According to the analysis of the insiders, on the whole, the current business of Centennial life has maintained a rapid growth momentum, with stable net profit and controllable liquidity risk; however, the capital replenishment pressure is great, the equity is very unstable, and other comprehensive investment losses are high, which are the hidden dangers of the sustainable and stable development of Centennial life.
Source: responsible editor of Securities Daily: Yang qian_nf4425