For Three Gorges Life, the solvency substandard has always been a major problem hanging over its head, and it is also an urgent need for a large-scale capital increase to "recover".
Text: Daily Financial Report Li Jia.
As 2023 comes to an end, it is no surprise that major insurance companies are reviewing and summarizing this year's business situation and planning and outlook for the coming year.
At a time when the market is tending to be a cool-down period, the capital increase of Three Gorges Life Insurance has brought a trace of waves to the insurance market, which was slightly calm at the end of the year.
On December 13, Three Gorges Life officially announced the results of the capital increase on the official WeChat, and the information shows that Chongqing Yufu Capital Operation Group (hereinafter referred to as "Yufu Capital") and Chongqing Hi-Tech Group (hereinafter referred to as "Chongqing Hi-Tech") will respectively increase the capital of Three Gorges Life 27.5 billion yuan, a total of 5500 million yuan. After the completion of the capital increase, the registered capital of Three Gorges Life Insurance has been successfully increased from 1 billion yuan to 153.7 billion yuan.
It is worth noting that Yufu Capital and Chongqing Hi-Tech are the joint largest shareholders of Three Gorges Life, and the shareholding ratio has changed after the successful capital increase, from the previous 20% to 3049%。In other words, the total shareholding ratio of the two state-owned shareholders will increase from 40% to more than 60%.
In this regard, Three Gorges Life Insurance said that after the completion of the capital increase, the company's capital strength will be further enhanced, and the equity structure will be further optimized, providing important support for the company's next high-quality development.
The solvency has been insufficient for a long time, and the capital increase can be "renewed".
In fact, for Three Gorges Life, the solvency failure to meet the standard has always been a major problem hanging over its head, and it is also an urgent need for a large-scale capital increase to "return blood".
It is not surprising that the solvency of Three Gorges Life Insurance in the first three quarters of this year has continued its previous downward trend, with the core solvency adequacy ratio and comprehensive solvency adequacy ratio respectively being % and the latest comprehensive risk rating of D.
Not only that, according to its Q3 2023 solvency report**, CTG Life's solvency adequacy ratio will continue to decline at the end of the next quarter.
In the six years since its establishment in 2017, the solvency adequacy ratio of CTG Life has declined significantly. According to the data, from 2018 to 2022, the core solvency adequacy ratio of Three Gorges Life Insurance was % and 104% respectivelyThe composite solvency adequacy ratios were 1% and 107%, respectively. Since the beginning of this year, the two indicators have fallen below 100%.
Looking at the comprehensive risk rating, the "Daily Financial Report" found that from the first quarter of 2022, the comprehensive risk rating of Three Gorges Life Insurance has become C. Starting in 2023, CTG Life's comprehensive risk rating will be changed from C to D, which means that CTG Life has failed to meet the solvency standard for six consecutive quarters.
According to regulatory requirements, an insurance company must meet three major conditions at the same time to meet the solvency standard: first, the core solvency adequacy ratio must not be less than 50%;Second, the comprehensive solvency adequacy ratio shall not be less than 100%;Third, the overall risk rating is B or above.
The contrast is very obvious, and how to ensure the long-term and healthy development of the company is indeed a difficult problem to solve.
5 years of accumulated losses 45.7 billion yuan, profitability needs to be improved urgently
When Three Gorges Life Insurance was established in 2017, it went through a six-year preparatory period, and in these 12 years, its business development road has not been smooth, especially since nearly half of the shareholders' shares are still in an abnormal state, and they have even been listed as dishonest executors.
According to public information, Three Gorges Life Insurance has six major shareholders, namely Yufu Capital, Hi-Tech Group, Macrolink Holdings, Jiangsu Huaxi Tongcheng Investment, Chongqing Dima Industry and Chongqing Zhongke Construction Group. It is worth noting that among them, the equity of Macrolink Holdings and Jiangsu Huaxi Tongcheng Investment was frozen, while the equity of Chongqing Zhongke Construction Group was also pledged and frozen.
The pledge and freezing of large-scale shareholders' equity has also invisibly hindered the pace of Three Gorges Life's business development. On the one hand, from the perspective of business area, Three Gorges Life Insurance has not yet left Chongqing, and currently has only 4 branches. It is reported that Ancheng Insurance has two wholly-owned subsidiaries of Ancheng Insurance Sales and Anlan Insurance Brokers, and has 19 provincial branches, 257 branches, and more than 4,500 employees, mainly distributed in the Yangtze River Delta, Pearl River Delta, Northwest China and North China and other important economic belts.
Under such circumstances, there is still a long way to go for CTG Life to expand its development and expand the scale of premiums.
On the other hand, it is also a problem that has been worried about the unprofitability of the market, and profitability needs to be strengthened urgently. According to the data, from 2018 to 2022, Three Gorges Life's insurance business income was 01.1 billion yuan, 91.7 billion yuan, 110.2 billion yuan, 62.4 billion yuan, 55.9 billion yuan;Net profit was -05.8 billion yuan, -11.9 billion yuan, -10.5 billion yuan, -06.5 billion yuan, -1100 million yuan, 5 years of accumulated losses of 45.7 billion yuan.
In the first three quarters of 2023, its profitability is still not optimistic, and the current insurance business income is 35.7 billion yuan, with a net loss of 1$2.6 billion. The continuous decline in business income reflects the difficulties of CTG's operation.
Under the rare "salary" of the former chairman, the first and second leaders have been vacant for a long time
If some of the downward micro performance data reflect the difficulties faced by Three Gorges Life Insurance on the way to expand its business, then in the macro card of internal management, Three Gorges Life Insurance is still facing the dilemma of long-term vacancy of generals.
It is reported that in July this year, the founder and former chairman Li Jiming sued Three Gorges Life Insurance for a huge salary, which pushed the company to the forefront for a while.
According to the adjudication documents, Li claimed that during his tenure, especially during the preparation of the company, CTG Life failed to pay the full amount of labor remuneration and illegally terminated the labor contract without legal procedures. Li has sued Three Gorges Life Insurance to recover wages and performance wages of up to 42.2 million yuan.
The negative news of "salary bargaining" is only the appearance, but what is highlighted behind it is actually that there are loopholes in the internal governance and operation management of Three Gorges Life. Judging from the current situation of Three Gorges Life, its chairman and general manager are both absent.
Following Li Jiming's resignation, in August 2021, Three Gorges Life announced that Zhang Lumin would be the chairman of the company, but 4 months later, Zhang Lumin hurriedly resigned and left. So far, there has been no official candidate for the post of chairman of Three Gorges Life.
In terms of general managers, since the establishment of Three Gorges Life, there have been frequent changes, and they are also in a state of long-term vacancy.
The first general manager of CTG Life was An Yimin, who resigned only half a year after being officially appointed as general manager by the regulatory authorities in June 2018. Since then, although Three Gorges Life Insurance has designated Li Qiming and Xu Yongwei as the temporary heads of the company to act as general managers, the formal appointment of the general manager has not been decided.
It is undeniable that the stability of an enterprise's senior management personnel plays an important role in the promotion and implementation of the company's strategy, and also has an important impact on the corporate culture and team atmosphere.
Now, with the implementation of the state-owned capital increase, it is worth our long-term attention whether Three Gorges Life Insurance can successfully usher in a new "general", and whether its solvency and performance will be further boosted.