In 2019, for the insurance industry, the environment is more friendly than other industries: on the one hand, preferential tax policies have been implemented, on the other hand, the capital market has performed well, and the investment income is gratifying. Especially when the third quarter of 2019 results are disclosed, the profits of several listed insurance companies have increased by 80% year-on-year, far ahead of other industries.
From the overall data of the industry, the development speed of the insurance industry in 2019 is still not slow: in the whole year of 2019, the original insurance premium income of insurance companies is 4.3 trillion yuan, an increase of 12.2% year-on-year; the number of insurance policies is growing rapidly, and the number of new insurance policies in the first four quarters of 2019 is 49.54 billion, an increase of 70.5% year-on-year. By the end of the fourth quarter of 2019, the total assets of insurance companies had reached 20.6 trillion yuan, an increase of 2.2 trillion yuan or 12.2% over the beginning of the year.
Although several leading listed insurance companies are not included in the statistics, in terms of market share, the top 10 unlisted life insurance companies account for 23% of the total premium. In addition, Ping An and Guoshou, which share more than 15% of the market, as well as China Taibao, which also ranks in the front row, show the degree of differentiation of life insurance market.
The property insurance market is even more divided. Among the property insurance companies that have disclosed the solvency report in the fourth quarter, only five insurance companies account for more than 1% of the market share, while Guoshou property insurance company, which ranks first in these property insurance companies, accounts for only 5.46%. According to the previous data, the market share of PICC Property insurance company has exceeded 30%.
Economic Observer found that of the 73 life insurance companies that disclosed the solvency report in the fourth quarter, 47 made profits in 2019 and 26 were in a loss state.
Among the non listed insurance companies, Taikang Life Insurance Company achieved outstanding performance, with a net profit of 21 billion yuan in 2019, which is more than the sum of the profits of 42 other companies; sunshine life insurance companys net profit of 4.1 billion yuan ranked second in the profit list of non listed life insurance companies; in addition, six insurance companies, i.e. China United Life Insurance Co., Ltd., Fude Life Insurance Co., Ltd., China Post Life Insurance Co., Ltd., CITIC Prudential Co., Ltd., Minsheng Life Insurance Co., Ltd. and China Merchants Xinnuo Co., Ltd., made profits The level is more than 1 billion yuan. In general, the total profit of the above-mentioned insurance enterprises in 2019 is nearly 40 billion yuan, far exceeding the level of 18 billion yuan last year. In addition, the profitability of foreign insurance companies is not inferior to that of some Chinese companies.
In terms of property and casualty insurance, of the 75 unlisted property and casualty insurance companies that disclosed the solvency report in the fourth quarter, Guoshou property and Casualty Insurance Co., Ltd. ranked first in the list of profits, and showed a dominant trend. In 2019, Guoshou property and Casualty Insurance Co., Ltd. realized a net profit of 2.123 billion yuan and a premium income of 71.116 billion yuan; Yingda property and Casualty Insurance Co., Ltd. and Yangguang property and Casualty Insurance Co., Ltd. also achieved a profit of 1 billion yuan. Among the 49 property insurance companies with positive profits, 34 have a profit of less than 100 million yuan. In 2018, unlisted property and casualty insurance was in a state of half profit and half loss.
Of the 148 insurance companies that issued solvency reports, 51 were in a loss state, accounting for 34.4%. 13 insurance companies, including Tianan life, Bohai life, China Merchants Renhe life, lost more than 100 million yuan. In terms of property insurance, Taikang online, Ancheng property insurance, sunshine credit insurance, Everest insurance, Bohai insurance, China road insurance, Zheshang insurance, Qianhai property insurance and Rongsheng insurance lost more than 100 million yuan.
3. The solvency of insurance companies is not up to standard
On the whole, compared with the last quarter, nearly half of the insurance companies that disclosed solvency reports and nearly 60% of the life insurance companies solvency decreased. According to statistics, 38 of the 75 property insurance companies that have published solvency reports have decreased their core solvency, accounting for 50.6%; 42 of the 73 life insurance companies have decreased their core solvency, accounting for 57.5%.
According to relevant regulations, only when the core solvency adequacy ratio is no less than 50%, the comprehensive solvency adequacy ratio is no less than 100%, and the comprehensive risk rating is class B or above, can the solvency meet the standard.
Among property insurance enterprises, only one company of Changan liability insurance still fails to meet the solvency standard. Although the rating has been raised, Changan liability insurance still gets C in the latest rating. In this report, Changan liability insurance said that in August 2019, the Bank Insurance Regulatory Commission approved the companys increase of registered capital, the companys capital increased to 3.25 billion yuan, the core capital and actual capital increased substantially, the solvency was restored, and the companys solvency stage insufficient risk was resolved. On November 1, 2019, the cbcirc officially issued the decision on the administrative supervision measures to remove the responsibility of Changan, and formally lifted the supervision measures taken for the company due to its insufficient solvency, including ceasing to accept some new businesses, ceasing to add new branches, etc.
Among life insurance companies, the situation of Centennial life insurance is not optimistic. It continues the C rating of the last quarter. The companys comprehensive solvency adequacy ratio reaches 128.08%, which is close to the regulatory red line.
It is worth noting that in January 2020, the CBRC issued a fine to centennial life for cheating the policyholders, untrue business data records, untrue customer address information, etc.
The risk rating of China France Life Insurance Co., Ltd. was once again rated as d and the core solvency adequacy ratio fell to - 16130.78%. The company said in its solvency report that the company fell into liquidity depletion in late April 2017. In response to the liquidity crisis, the company made efforts to coordinate shareholders borrowing, and has taken a number of emergency measures such as management salary reduction and unnecessary expenditure reduction to suspend risk exposure and daily operation All operations are maintained by shareholder loans.
In addition to the above insurance companies whose solvency is not up to standard, the solvency of some insurance companies is on the edge of the regulatory red line. According to the regulations on solvency management of insurance companies (Draft for comments), insurance companies with higher solvency risk, such as core solvency adequacy ratio less than 60% or comprehensive solvency adequacy ratio less than 120%, are the focus of verification. In the fourth quarter of 2019, the comprehensive solvency adequacy ratio of Bohai property insurance was 112.61%, and 128.85% in the third quarter of last year. Bohai property insurance is the first national property insurance company headquartered in Tianjin. At present, the largest shareholder is Tianjin Taida International Holding (Group) Co., Ltd., with a shareholding ratio of 40.62%. Australia Insurance Group Co., Ltd. and Tianjin Binhai high tech Zone Asset Management Co., Ltd. are the second and third largest shareholders respectively. It is understood that Bohai property insurance has been listed in Tianjin property rights trading center for capital increase projects. The listing information shows that Bohai Property Insurance Co., Ltd. will issue no more than 968 million additional shares through public way, and the price per share of the intended investors shall not be less than (including) 1.0331 yuan.
In addition, the core solvency adequacy ratios of Qianhai life insurance, Zhujiang life insurance and Changan liability insurance are 72.23%, 75.73% and 92.99%, respectively, less than 100%. In terms of comprehensive solvency adequacy ratio, Bohai insurance, Anxin property insurance, China Coal insurance, Tianan life insurance, Zhujiang life insurance, Fude life insurance and other companies comprehensive solvency adequacy ratio is below 130%.