Edit |Yuer Lake
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As a special financial tool, insurance was born to reduce financial risks, but with the development of society, insurance has been endowed with more attributes: whether it is asset allocation or pension savings, insurance can cover them all, so the insurance industry has won the favor of many middle classes in recent years.
Domestic insurance industry giants Chinese Life and Ping An of China are backed by a huge capital system, and are constantly innovating in the insurance field, so that new and old customers can choose their favorite products. Second-tier insurance companies, such as Sunshine Insurance, can only start from the first or the best product coverage, but when Sunshine Insurance is desperately working hard in the front-end market, the backyard is constantly **.
The insurance industry is picking up, and life insurance has become the next force point
Recently, the "Data on the Main Regulatory Indicators of the Banking and Insurance Industry in the Third Quarter of 2023" released by relevant departments shows that the total assets of China's insurance industry at the end of the third quarter were 296 trillion, an increase of 9% from the beginning of the year;The annualized comprehensive rate of return of insurance funds is 328%。The release of this data shows that the insurance industry, which has fallen into a trough in 2022, has shown signs of recovery.
According to the report, at the end of the third quarter of 2023, the total assets of insurance companies were 296 trillion, an increase of 2 from the beginning of the year4 trillion, an increase of 9% from the beginning of the year. Among them, the total assets of property insurance companies are 28 trillion, an increase of 6 from the beginning of the year6%。The total assets of the life insurance company are 254 trillion, an increase of 8 from the beginning of the year9%。The number of new policies was 53.7 billion, a year-on-year increase of 392%。
At a time when the economic environment is weakening, many middle-class people with ample cash flow are more willing to find some safe ways to manage their finances. Life insurance is a great option. Because it has a guaranteed comprehensive rate of return, compared with some ** projects or fixed deposits that cannot be accessed at any time, large insurance policies that can avoid property risks and provide stable income have obviously become a financial choice in the new era.
In terms of solvency, which is of concern to the insured, as of Q3 2023, the comprehensive solvency adequacy ratio of the insurance industry is 194%, and the core solvency adequacy ratio is 126%. The comprehensive solvency adequacy ratios of property insurance companies, life insurance companies, and reinsurance companies are respectively. 1% and 2783%；The core solvency adequacy ratios were. 6% and 2423%。
However, the performance growth rate of the three giants of the domestic insurance industry: Chinese Life, Ping An and China Taiping, is slowing down. Industry analysts said that the performance of listed insurance companies in H1 was relatively stable, with a premium growth rate of 818%, of which the life insurance sector contributed 515%, and the growth rate of property insurance sector is only 299%。
In recent years, many insurance companies have joined forces with relevant departments to launch many short- and medium-term insurance that meet the current medical needs of residents, and can be paid with medical insurance personal accounts, which also allows many residents to understand and get in touch with the insurance industry and the business of life insurance.
According to a senior consultant in the insurance industry, life insurance has been the main force of growth in recent years, and with the advent of an aging society, this business segment will have more potential. At the same time, short-term life insurance has also been launched for different groups of people to further cover the middle-aged and elderly groups in need.
It is worth noting that the strong momentum of the Internet insurance business in the past two years has also provided new hematopoietic ideas for many traditional insurance companies. Alipay and WeChat, all kinds of short-term Internet insurance with only 100 yuan per year and only a few tens of yuan per month have become the consumption choice of many young people.
Compared with long-term life insurance, which can easily cost tens of thousands of dollars a year, short-term insurance has more independent choices, can be paid flexibly, and claims are simple and fast, which is a new product in the information age. This kind of product that combines the concept of the Internet and traditional insurance can be seen everywhere in Alipay, WeChat and other social networks, and the subtle insurance publicity has also laid the foundation for life insurance to become an insurance growth point.
As an insurance company that started with property insurance, Sunshine Insurance has also been striving to develop in the direction of diversification, but its development in the life insurance market has been frequently hindered. What's more, Sunshine Insurance is also facing pressure on capital flow, and its solvency has been declining in recent years.
The growth momentum of property insurance is no longer there, and the general trend of Sunshine Insurance is gradually lost
According to relevant data, as of June 2023, the loss ratio of the property insurance industry is on the rise: from January to June, the industry's compensation expenditure was 475.5 billion, accounting for 5417%, an increase of 337%, which has reached 98For 9% of the property and casualty insurance industry, it is almost equivalent to a loss.
For Sunshine Insurance, which accounts for the majority of its revenue, the pressure on Sunshine Insurance, which accounts for the majority of revenue, has naturally increased exponentially, because Sunshine Insurance's comprehensive solvency and liquidity reserves are declining.
According to the data, as of Q2 2023, the average comprehensive solvency adequacy ratio of insurance companies is 188%, and the core solvency adequacy ratio is 1227%。At the end of 2020, Sunshine Insurance's comprehensive solvency adequacy ratio was 20584%, which is still higher than the industry average. However, in the 2023H1 financial report, Sunshine Insurance's core solvency adequacy ratio slipped to 12256%, and the comprehensive solvency adequacy ratio decreased to 17017%, both slightly lower than the industry average.
In terms of liquidity reserves, Sunshine Insurance is also stretched. Since 2021, its operating cash flow has been consistent**. According to the data, its operating cash flow in 2021 was 4457.3 billion, compared to 262 in 20222.9 billion, a year-on-year decrease of 4115%。As of mid-2023, its operating cash flow is only 1582.3 billion.
As a listed insurance company, Sunshine Insurance will inevitably need to solve the two index problems mentioned above. Therefore, in August and October, Sunshine Insurance's two consecutive big moves also seem to be done to appease investors and the market.
On August 3, Sunshine Life announced that the company would issue an additional 270.3 billion ordinary shares, par value of $1 per share, subscribed for **185 yuan, the total amount of funds raised is about 499.9 billion, subscribed by Sunshine Insurance in cash. After the completion of this capital increase, the total number of shares of Sunshine Life is 2104.5 billion shares, with a registered capital of 2104.5 billion, Sunshine Insurance Group holds 999999% unchanged.
Just two months later, Sunshine Insurance announced again that it had received regulatory approval and was allowed to publicly issue 10-year redeemable capital supplementary bonds in the national interbank bond market, with an issuance scale of no more than 12 billion.
Industry analysts said that the Sunshine Insurance once again issued bonds to improve solvency, undoubtedly to improve solvency and cash flow, after all, in its report, these two key data really make people sweat. At the same time, Sunshine Insurance is still facing regulatory challenges: violations are continuous, and the brand reputation is questionable.
The circulation of H shares was approved, and the decline of Sunshine Property Insurance is still irreversible
On November 14, Sunshine Insurance said that the company had completed the filing of the "full circulation" of H shares. According to the public filing notice, if Sunshine Insurance does not complete the "full circulation" conversion and listing of H shares within 12 months, it should update the filing materials if it intends to continue to advance.
Not long ago, the relevant departments announced a notice of administrative punishment against a number of subsidiaries of Sunshine Insurance. It involved a number of illegal operations and was associated with a number of branches: Sunshine Property Insurance was fined 1.3 million;Sunshine Property & Casualty Insurance Guangdong Branch, Shandong Branch, Meizhou Central Branch, Shaoguan Central Branch, Dezhou Central Branch, and Rizhao Central Branch were each fined 500,000 yuanNine managers at all levels, including Jin Shoulin, assistant to the president and general manager of the Credit Guarantee Insurance Division, were given warnings and fines of varying amounts.
In fact, this is not a "small accident" of Sunshine Insurance. On November 28, Sunshine Insurance was named and punished by the local authorities for "giving the policyholder benefits other than those agreed in the insurance contract": the branch was fined 250,000 yuan, and the assistant general manager of the sales department of the branch was warned and fined 70,000 yuan.
Sunshine Insurance, which has repeatedly walked the tightrope at the business level, has reached a crazy point in its thirst for business increment. However, compared with the three insurance giants in the first echelon, Sunshine Insurance is obviously not enough, and it will take at least a long time to adjust the priorities of its business segments.
Chinese Life focuses on life insurance business, from life insurance, health insurance to accident insurance, etc., almost all-round coverage, so it is almost firmly in the top position in the field of life insurance;On the basis of life insurance, health insurance and property insurance, Ping An has horizontally developed various financial services and shaped its own ecosystemCPIC is the ancestor of the life insurance field and has been exerting its huge energy in the field of property insurance.
Compared with these three giants, Sunshine Insurance is like a fledgling newcomer.
Sunshine Insurance does not need to publish its own financial data before it is listed, nor does it need to worry about stock price fluctuations, but after just a few years of listing, the stock price has been step by step, although there has been a short-term improvement in the middle, but when the general environment is not good, the position of the head insurance company can hardly be shaken, the market performance of Sunshine Insurance has been much worse than before.
In addition, Sunshine Insurance needs to find its own characteristics. The main focus is property insurance, but the breadth and depth of its property insurance coverage is far from enough, and the management naturally sees this, and has been making drastic structural adjustments in recent years, but the effect of optimization has not yet appeared.
Conclusion
Sunshine Insurance is known for its fast claims settlement, nationwide coverage, diversified services and innovation, which is the fundamental reason why it has grown rapidly and successfully listed. However, in the face of the pressure of the capital market and the continuous squeeze of the three giants after listing, the newcomer seemed a little at a loss.
Solvency continues, cash flow is tight, business departments are frequently named and fined for illegal operations, etc., in fact, there are more mountains in front of Sunshine Insurance. If Sunshine Insurance wants to draw a successful end to its 2023, it will have to make more efforts.