When the tide recedes, I know who is swimming naked.
According to the "Securities Daily" reporters, as of yesterday, a total of 80 life insurance companies disclosed the solvency report for the first three quarters of this year. Among them, there are four insurance companies' solvency approaching the regulatory verification line; two insurance companies still fail to meet the solvency, namely the Lucky Life and the Sino-French Life Insurance.
Insufficient solvency will not only be subject to regulatory concerns, but will also affect the development of the business. At present, life insurance companies are actively preparing for the "open door" in 2019, and the lack of solvency will inevitably constrain their next year's efforts to "open the door".
A responsible person of a life insurance company whose solvency has long approached the regulatory line told the Securities Daily that the solvency continued to be slightly higher than the regulatory line, which really affected the company's business development. Especially at key nodes such as “opening the door”, after the enthusiasm of the first-line sales staff is mobilized, it is often difficult to maintain the stable growth rate of the premium. The problem of solvency has become a problem of the company’s development. Actively coordinate with shareholders to increase capital.
4 insurance companies' comprehensive solvency
Adequacy ratio between 100% and 120%
Recently, with the solvency report released in the third quarter, the solvency data of the insurance companies and regulatory concerns has also been released. Among them, the comprehensive solvency adequacy ratio of four insurance companies has sounded the alarm: the comprehensive solvency adequacy ratio is between 100% and 120% of the regulatory verification line.
According to the “Regulations on the Solvency of Insurance Companies (Consultation Draft)” issued by the former Insurance Regulatory Commission in 2017, in the case of off-site verification, the Banking Regulatory Commission conducts quarterly solvency reports submitted by insurance companies and publicly disclosed solvency information. Verification, and insurance companies with a core solvency adequacy ratio of less than 60% or a comprehensive solvency of less than 120% and other solvency risks are included in the key verification targets.
According to the statistics of the "Securities Daily" reporters, among the life insurance companies that have disclosed relevant data, four companies have a comprehensive solvency adequacy ratio between 100% and 120%, entering the regulatory verification line mentioned in the above opinion draft.
The relevant person in charge of the above-mentioned insurance companies said that the company's solvency continued to be slightly higher than the supervision line. The company did not want to increase capital, and the actual intention to increase shareholders' capital was not coordinated for a long time. Some shareholders are unwilling to increase capital, but if the shareholders who are willing to increase capital increase their capital, the proportion of equity will exceed the standard (according to regulatory requirements, the single shareholder holding limit may not exceed 30%). This not only tests the company's management capabilities, but also affects the growth rate of the business.
Another person in charge of the insurance company that is close to the regulatory verification line is also told by the Securities Daily that the company is operating normally and is actively increasing capital.
From the business point of view, the four insurance companies' silver insurance business accounted for a large proportion. For example, the "Securities Daily" reporter learned exclusively that among the above-mentioned insurance companies, the proportion of bancassurance channels in the first three quarters of this year was down by 80% compared with 80% in the same period last year. The risk channel increased from 8% to 13%. It can be seen that the insurance company has reduced its reliance on the bancassurance channel in the first three quarters of this year, but the proportion is still very high.
Sunbeam HNA Life Insurance
In addition to the four quarterly solvency of four life insurance companies approaching the regulatory line, there are two companies that are not up to the solvency, namely Sino-French Life and Mascot.
According to regulatory requirements, the core solvency adequacy ratio measures the adequacy status of the insurance company's high-quality capital, and the comprehensive solvency adequacy ratio measures the overall adequacy of the insurance company's capital. The comprehensive risk rating is mainly based on the comprehensive capitalization risk of the insurance company and the difficulty of capital. Risk, measuring the size of the company's overall solvency risk.
The Exposure Draft stipulates that the standards for compliance of the above three indicators are: the core solvency adequacy ratio should be no less than 50%, the comprehensive solvency adequacy ratio should be no less than 100%, and the risk comprehensive rating should be in Class B and above. The three insurance companies that meet the regulatory requirements are the solvency-capable companies; if any of the indicators fails to meet the standards, the solvency is not up to the standard.
In the third quarter of this year, Sino-French Life’s solvency adequacy ratio was negative, and the Mascot Life Risk rating was C-level for two consecutive quarters, both of which were in a state of solvency failure.
Sino-French Life Insurance's solvency report for the third quarter of this year disclosed in the official website of the China Insurance Association shows that its net profit for the first three quarters was -56.74 million yuan, and the insurance business was 113,000 yuan. The core and comprehensive solvency adequacy ratio for the third quarter was -6739.43. %, in a critically low state. According to the statement, “the company’s capital has been exhausted and the cash flow continues to flow out. The company’s liquidity has been depleted since April 2017, and daily operations are maintained by shareholder loans.”
In addition, according to the "Securities Daily" reporters, China and France Life has borrowed 8 times from shareholders this year, with a total loan of more than 60 million yuan. In its solvency report, the company said, "The company will continue to fully promote the capital increase and share expansion work, and strive to apply for capital increase as soon as possible, and fundamentally resolve liquidity risks."
From the perspective of the mascot life, it stated in the solvency report that according to the results of the second-generation regulatory information system, the risk comprehensive rating result in the first quarter of 2018 was C, and the risk rating result in the second quarter was still C. According to the regulatory evaluation rules of risk comprehensive rating, the company's comprehensive risk rating is C because the comprehensive solvency adequacy ratio is not up to standard, and the remaining non-quantitative risks include little change in operation, strategy, reputation, and liquidity risk scores.
It is worth mentioning that Xinguang HNA Life Insurance, which has continued to fail to meet its solvency in the second quarter of this year and the previous five years, has been suspended from the establishment of new branches and new businesses in 2013 and 2015. One of the institutions whose licenses are stagnant. With the recent approval of the capital increase of Xinguang HNA Life Insurance, the solvency has finally turned from negative to positive.
The third quarter solvency report shows that Xinguang HNA Life’s latest comprehensive solvency adequacy ratio is 721%. It stated that the company's board of directors reviewed and approved the resolution on shareholder equity transfer and change of registered capital on July 25, and then submitted a formal application to the Bank of China Insurance Supervision and Administration Committee. This request was reviewed and approved by the Bank of China Insurance Regulatory Commission on September 30, 2018 (Silver Insurance Supervision  No. 917). The company's solvency adequacy ratio at the end of the third quarter has reached the target, and the comprehensive risk rating results for the third quarter of 2018 are expected to improve.
(Article source: Securities Daily)