Visual China).
Three Gorges Life Insurance Co., Ltd., whose solvency is under pressure, has made "phased progress" in capital increase and reorganization. Blue Whale Finance paid attention to the fact that under the promotion of the Chongqing State-owned Assets Supervision and Administration Commission, recently, two state-owned shareholders of Three Gorges Life Insurance signed a capital increase agreement with Three Gorges Life Insurance. While increasing the capital strength of CTG Life, it will also promote changes in its shareholding structure.
Three Gorges Life, which has been established for six years, has fallen into a dilemma where its solvency has fallen below the regulatory red line, which has caused certain restrictions on its operation and management. Chongqing State-owned Assets also put forward expectations that it will realize the normal operation of Three Gorges Life's business as soon as possible, expand its business scale, and cultivate local state-owned holding legal entities and high-quality state-owned life insurance brands.
The turning point has arrived, can Three Gorges Life really solve the predicament?
Solvency was under pressure, and two state-owned shareholders came to the rescue
Recently, Three Gorges Life Insurance released information that it signed a capital increase agreement with Chongqing Yufu Capital Operation Group (hereinafter referred to as "Yufu Capital") and Chongqing Hi-Tech Group (hereinafter referred to as "Hi-Tech Group").
Zeng Jinghua, Secretary of the Party Committee and Director of Chongqing SASAC, proposed at the signing ceremony that it was "a new action of municipal state-owned enterprises to serve Chongqing's construction of a western financial center".
As the only Chinese-funded life insurance legal entity headquartered in Chongqing, CTG Life Insurance is jointly funded and established by six large enterprises: Yufu Capital, Hi-Tech Group, Macrolink Holdings, Jiangsu Huaxi Tongcheng Investment Holding Group, Chongqing Dima Industrial Co., Ltd., and Chongqing Zhongke Construction (Group). Among them, the first four shareholders hold 20% of the shares, Chongqing Dima Industry holds 15% of the shares, and Chongqing Zhongke Construction holds 5% of the shares.
It is worth mentioning that the equity held by Macrolink Holdings and Huaxi Tongcheng Investment has been frozen, and the equity held by Chongqing Zhongke Construction is "pledged and frozen".
Yufu Capital and Hi-Tech Group, which increased their capital to Three Gorges Life Insurance this time, are both state-owned assets in Chongqing. It is reported that Yufu Capital, known as "Chongqing Huijin", is the country's first local wholly state-owned comprehensive asset management company approved by Chongqing Municipality, and is listed as a municipal key state-owned enterprise under the centralized management of Chongqing State-owned Assets Supervision and Administration Commission.
Founded in 1997, Hi-Tech Group is a wholly state-owned enterprise approved by Chongqing, mainly engaged in development and construction, asset management and investment operation.
According to the agreement, Yufu Capital and Hi-Tech Group will respectively increase the capital of Three Gorges Life.
Zeng Jinghua proposed that Three Gorges Life Insurance is a municipal state-owned financial enterprise and an important part of Chongqing's state-owned assets, and it is necessary to continue to optimize its capital structure, enhance its capital strength, and promote the high-quality development of Three Gorges Life. "It is necessary to continue to promote the full implementation of the capital increase, optimize the management system and corporate governance structure, realize the normalized operation of the Three Gorges Life business as soon as possible, expand the business scale, and cultivate local state-owned holding legal entities and high-quality state-owned life insurance brands. ”
In fact, for Three Gorges Life, a capital increase is imminent.
Since its inception in 2018, CTG's solvency has gradually declined, with its core and comprehensive solvency adequacy ratios declining from % in 2018 to at the end of 202287%。Since the beginning of this year, solvency has continued to decline, and judging from the latest disclosure of the third quarter solvency report, the core and comprehensive solvency adequacy ratios of Three Gorges Life Insurance are respectively56%, the comprehensive solvency adequacy ratio has fallen below the 100% red line set by the regulator, and the core solvency is also hovering at a low level.
In terms of risk rating, starting from the first quarter of 2022, the comprehensive rating of CTG Life Insurance was downgraded from B to C. At that time, CTG Life proposed that the main risk faced by the company was that its solvency was under pressure, and the company's strategy, operation and management were subject to certain restrictions.
Starting from the first quarter of 2023, CTG Life's comprehensive risk rating has further deteriorated to D, mainly involving risks such as solvency stress and related strategic and capitalizable risks.
Problems such as the absence of senior management and the shrinking of premiums need to be solved one by one
In addition to solvency, Three Gorges Life Insurance has faced many problems in operation and management in recent years.
In July this year, a civil ruling on the judgment document network revealed that Li Jiming, the former chairman of Three Gorges Life Insurance, sued his old employer for a salary of 42.2 million yuan. According to Li's complaint, in 2011, he was entrusted by Three Gorges Life Insurance to set up a preparatory team and served as the team leader, and was later approved to serve as the chairman and legal person after the establishment of Three Gorges Life, but in 2021, Three Gorges Life terminated its labor contract without going through legal procedures.
Behind the personnel controversy, it is difficult to say that CTG Life has no omissions in its management structure.
Not only that, after Li Jiming left office, in August 2021, Three Gorges Life announced that Zhang Lumin would be the chairman of the company, and at the same time, Xu Yongwei, deputy general manager and chief investment officer, would be the interim head of the management and act as the general manager. But four months later, Zhang Lumin resigned, and Xu Yongwei's position as interim head expired on February 25, 2022. So far, the positions of chairman and general manager of Three Gorges Life Insurance are still vacant.
Three Gorges Life Insurance had a relatively average equity before, but this time the two shareholders increased their capital and increased the proportion of equity, and resources may also be further tilted. In addition, with the change of equity structure, Three Gorges Life Insurance will further or bring about adjustments in management structure and business strategy", a relevant person in charge of a life insurance company analyzed to Blue Whale Finance, "After the two shareholders increase their holdings, there is a high probability that they will promote the determination of the management of Three Gorges Life." ”
In addition, at the operational level, Three Gorges Life Insurance also needs to break the situation urgently.
In 2018, the first full year of operation after its establishment, CTG Life's premium income was 01.1 billion yuan, which gradually increased to 9 in the following two years1.7 billion yuan, 110.2 billion yuan, but in 2021 and 2022, the premium income of Three Gorges Life Insurance will decline year by year, with 62.4 billion yuan, 55.9 billion yuan, in the first three quarters of this year, the premium income was 35.7 billion yuan, still showing a contraction trend.
From 2018 to 2022, the net profit of Three Gorges Life Insurance was -05.8 billion yuan, -11.9 billion yuan, -10.5 billion yuan, -06.5 billion yuan, -1100 million yuan, in the first three quarters of 2023, the net loss of Three Gorges Life Insurance further expanded to 1$2.6 billion.
Insufficient solvency will lead to restrictions on the business development and use of funds by insurance companies, and after the capital increase is implemented, there will be significant improvements in the development of the business", the relevant person in charge of the aforementioned life insurance company predicted, "In the long run, it is necessary to first clarify the development path." ”
For further business development strategies, Zeng Jinghua also made it clear at the signing ceremony that "it is necessary to highlight the characteristics of life insurance to form core competitive advantages, intensively cultivate the main business, innovate and expand characteristic life insurance, better meet the diverse needs of the people, build a parallel system of ordinary life insurance and characteristic business, and create core competitive advantages." At the same time, he said, "The strategic investors of municipal state-owned enterprises should be good long-term capital, patient capital and strategic capital, support and promote Three Gorges Life Insurance to become stronger, better and bigger in the insurance field, and provide professional and high-quality services in a market-oriented manner." ”
With the capital increase and restructuring about to land, can Three Gorges Life truly usher in a new beginning and achieve a turning point?