According to the solvency report for the fourth quarter of 2023, Huahui Life only achieved 423 insurance business income last year70,000 yuan, net profit loss of 6555920,000 yuan, and the rectification of corporate governance-related issues has not yet been completed.
Punctuation financial researcher Deng Xiuzhi.
With the release of solvency reports for the fourth quarter of 2023, more and more insurers are posting their annual report cards. Among them, Huahui Life Insurance Co., Ltd. *** hereinafter referred to as Huahui Life) continued to have a sluggish operating performance.
According to the solvency report, in 2023, Huahui Life will only achieve insurance business income of 42370,000 yuan, a year-on-year decrease of 2896%；Net profit was -6555920,000 yuan, continuing the momentum of loss. So far, the company has been losing money for 8 years from 2016 to 2023, and has accumulated losses of 62.5 billion yuan.
Compared with the dismal performance, Huahui Life's solvency adequacy ratio can be described as bright. At the end of the fourth quarter of 2023, the company's core solvency adequacy ratio and comprehensive solvency adequacy ratio were respectively. 81%, far exceeding the industry average.
The high solvency adequacy ratio is due to the fact that Huahui Life Insurance is currently limited in the approval of new products and its business operations are stagnant. In the third year of its establishment, the company was issued a regulatory letter by the former China Insurance Regulatory Commission due to equity disputes and the resulting corporate governance issues. In the latest solvency report, Huahui Life said that the company is carrying out corporate governance rectification work in accordance with the requirements of the regulatory letter, and the rectification of related issues has not yet been completed. Because of this, Huahui Life's comprehensive risk rating result is C.
On issues such as business performance and corporate governance rectification, Punctuation Finance researchers sent a communication letter to Huahui Life, but have not received a reply as of press time.
The income from insurance business is less than 5 million yuan
According to public information, Huahui Life Insurance was opened in December 2011 with a registered capital of 1.5 billion yuan. Soon after its opening, Huahui Life Insurance was embroiled in an equity dispute. According to the solvency report, the company's insurance business revenue shrank by 73% year-on-year in 201781% to 23.3 billion yuan, and then contracted year by year, and only 423 in 202370,000 yuan, a year-on-year decrease of 2896%。
According to the solvency report for the fourth quarter of 2023, Huahui Life Insurance is currently restricted in the approval of new products, business scale, investment channels and institutional construction, and the operating institutions only have the Shenyang headquarters and 6 central branches, and the operating area is small, which has great pressure on the company's business development and the realization of the company's strategic goals.
It is reported that in the fourth quarter of 2023, Huahui Life only has one saleable group term life insurance but cannot form a group protection plan, and has not successfully filed new products and launched new businesses. Punctuation financial researchers noticed that there were no products displayed under the "Product Center" column on the company's official website. From the perspective of scale indicators, Huahui Life's insurance business income in 2023 mainly comes from renewal premiums, and the premiums paid in the first year of new policies and the premiums paid in the first year of new policies with a term of 10 years and above are all vacant.
In this case, Huahui Life's net profit loss in 2023 will be 6555$920,000. Punctuation financial researchers combed through the published solvency reports and found that Huahui Life Insurance has been in a state of loss from 2016 to 2023, with a cumulative loss of 62.5 billion yuan.
In addition, Huahui Life's net assets are also shrinking year by year. From the end of 2018 to the end of 2023, the company's net assets were 107 billion yuan, 104.6 billion yuan, 93.2 billion yuan, 85.9 billion yuan, 78.6 billion yuan, 7$2.1 billion.
The company's annual report has been "difficult to deliver" for 10 years
Punctuation financial researchers also caught the attention of Huahui Life's annual report disclosure. So far, the company's official website has only listed the 2012 annual information disclosure report, and the annual information disclosure report for the 10 years from 2013 to 2022 has been shown as "suspended disclosure".
According to relevant announcements, in 2013 and 2014, due to disputes over the ownership of the company's equity, Huahui Life Insurance was unable to convene a board of directors and shareholders' meeting to perform relevant deliberation procedures, and suspended the disclosure of annual information; In 2015 and 2016, Huahui Life suspended the disclosure of annual information due to the fact that the company's equity litigation cases had not yet been concluded, the board of directors and shareholders' meetings could not be convened, and the relevant deliberation procedures could not be performed. From 2017 to 2022, Huahui Life Insurance was suspended from publishing the annual information disclosure report because it was carrying out corporate governance rectification work in accordance with the requirements of the "Regulatory Letter" issued by the regulatory authorities, the board of directors and shareholders' meetings could not be held, and the relevant review procedures could not be performed.
It is understood that Huahui Life Insurance was issued a regulatory letter by the former China Insurance Regulatory Commission in June 2013 due to equity disputes and corporate governance issues caused by them. The regulatory letter requires Huahui Life to strictly control the scale of its business, limit the use of funds to bank deposits and bonds, and prohibit bond repurchases, and at the same time requires Huahui Life to suspend the purchase of large fixed assets such as office buildings.
In October 2017, the regulator issued a regulatory letter to Huahui Life again, pointing out that the company had problems in shareholder equity, the operation of the "three committees and one layer", related party transactions, compliance and internal control management, internal audit, information disclosure, assessment and incentives, etc., and ordered Huahui Life to carry out rectification, and stated that the next step would be to dispose of Huahui Life's illegal equity in accordance with the law, track the results of rectification, and take further regulatory measures as appropriate.
In June 2021, Huahui Life announced that the equity ownership dispute litigation cases that led to the original China Insurance Regulatory Commission issuing a regulatory letter to it in June 2013 had all been concluded.
However, Huahui Life's solvency report for the fourth quarter of 2023 stated that the corporate governance rectification work has not yet been completed, and as of the reporting date, the company has not been able to report on the actual controller.
In this regard, Huahui Life Insurance said that it has repeatedly studied and formulated rectification measures and reported to the regulators, and the next step will be to strengthen communication and reporting with the regulators, and actively carry out corporate governance rectification work in accordance with the opinions of the regulatory authorities.
Solvent fell short for seven consecutive quarters
As the rectification work had not yet been completed, Huahui Life's solvency was not up to standard.
Punctuation financial researchers combed through Huahui Life's past solvency reports and found that in recent years, the company's comprehensive and core solvency adequacy ratios have remained at a high level.
However, due to the fact that the rectification of corporate governance-related issues has not yet been completed, Huahui Life Insurance has been regarded by the regulator as a company with greater operational risk, and has been rated C for seven consecutive quarters since the first quarter of 2022. According to the Regulations on the Solvency Management of Insurance Companies, an insurance company must meet the three regulatory requirements of "core solvency adequacy ratio of not less than 50%, comprehensive solvency adequacy ratio of not less than 100%, and comprehensive risk rating of Class B or above" in order to be a solvency company.
In addition, recently, the Insurance Association of China disclosed the "2022 Annual Evaluation Results of Insurance Company Legal Person Operation", and Huahui Life Insurance was once again rated as Class C. There are a total of 79 life insurance companies in this business evaluation, and only 6 are Class C. It is reported that since 2019, Huahui Life Insurance has been rated as Class C for four consecutive years, and in 2018, it was the only insurance company rated as Class D.
Some operating indicators of Huahui Life Insurance in the fourth quarter of 2023
Data**: Huahui Life Solvency Report for the fourth quarter of 2023.