Every reporter Tu Yinghao
Recently, various insurance companies have successively completed the disclosure of solvency reports in the first quarter of 2024. According to the statistics of the Daily Economic News, it does not include undisclosed insurance companies. The latest comprehensive risk rating of insurance companies shows that there are 10 in category C and 3 in category D. This also means that the solvency of these 13 insurance companies is not up to standard.
Comprehensive rating of insurance companies is an important indicator to measure the solvency of insurance companies. In accordance with the Provisions on the Management of Solvency of Insurance Companies, an insurance company must meet the requirements that the core solvency adequacy ratio is not less than 50%, the comprehensive solvency adequacy ratio is not less than 100%, and the comprehensive risk rating is B or above.
The latest comprehensive risk rating results show that Anxin Property&Casualty Insurance, Peking University Founder Life Insurance and Three Gorges Life Insurance are in Class D. As the capital increase was approved at the end of 2023, the solvency adequacy ratios of China Three Gorges Life Insurance Co., Ltd. and Peking University Founder Life Insurance Co., Ltd. have met the regulatory requirements. By the end of the first quarter of 2024, only Anxin Property Insurance Co., Ltd. had quantitative and qualitative indicators that did not meet the regulatory requirements.
Anxin Property Insurance's solvency is still seriously insufficient
Since the fourth quarter of 2020, the solvency adequacy ratio of Anxin Property&Casualty Insurance has fallen to negative, and its comprehensive risk rating has also fallen to Category D. Due to the serious lack of solvency, in January 2021, the company was ordered by the regulatory authorities to stop accepting new auto insurance business, and the remuneration of directors, supervisors and senior executives was also restricted.
By the end of the first quarter of 2024, the core and comprehensive solvency adequacy ratio of the company was -874.01%, and the solvency was seriously insufficient. Anxin Property&Casualty Insurance said in the report, "Due to the negative solvency adequacy ratio, the company has been ordered to suspend accepting new auto insurance business. The short-term health insurance as a strategic insurance has also been unable to operate, and the company's business development is currently at a standstill. The company is actively promoting the progress of capital increase, and has not yet been able to restore the solvency level as scheduled, and the business stagnation will continue."
As the company no longer carries out new business, the premium income of Anxin Property&Casualty Insurance in the current quarter is zero, the net profit continues to be negative, and the net cash flow, actual capital and net assets of operating activities are negative.
At the end of 2023, the capital increase of Peking University Founder Life was approved, and the company's registered capital increased from 2.88 billion yuan to 4.58 billion yuan. By the end of the first quarter of 2024, the company's core solvency adequacy ratio was 75.89%, and the comprehensive solvency adequacy ratio was 125.41%, reaching the standard level.
Peking University Founder Life Insurance said in the report that the company's solvency adequacy ratio reached the standard in the fourth quarter of 2023, but due to factors such as the indicator time dimension, the capitalization risk score is still at a low level, and the company will continue to strengthen the management of solvency adequacy ratio. For risks that are difficult to capitalize, the company decomposes the management responsibilities of indicators, requires strengthening control and self-evaluation, and continuously improves and improves the indicator status. For weak indicators, actively organizes rectification, and tracks the improvement quarterly.
At the end of 2023, the shareholders of Three Gorges Life Insurance were approved to increase their capital by 550 million yuan, which improved the company's registered capital and solvency adequacy ratio. By the end of the first quarter of 2024, the company's core solvency adequacy ratio was 124.91%, and the comprehensive solvency adequacy ratio was 170.81%.
The comprehensive risk rating results of China Three Gorges Life Insurance in the second quarter and the third quarter of 2023 are both Class D. However, the company did not disclose the comprehensive risk rating results of the fourth quarter of 2023. Three Gorges Life Insurance disclosed relevant measures in its report, saying that it would collect and submit regulatory rating data at the end of 2023 and the end of the first quarter of 2024, conduct effective monitoring, early warning, analysis and reporting on rating indicators, key risk indicators and tolerance indicator data, and dynamically sort out risk points, Organize rectification for indicators with large negative deviation. "With the capital increase in place and the improvement of capitalized risks, we will further optimize the company's strategy, carry out business operations and reduce strategic risk exposure."
In addition, many insurance companies have not yet released solvency reports, and some insurance companies have not disclosed the results of comprehensive risk rating in their reports.
Risk rating results of several insurance companies are Class C
The reporter of the Daily Economic News noted that compared with the fourth quarter of 2023, the solvency of some insurance companies has improved significantly. For example, in the first quarter of 2024, Changsheng Life Insurance will become an insurance company with solvency up to standard from the previous substandard.
As of the end of the first quarter of 2024, the core solvency adequacy ratio of Long Life Insurance is 108.4%, and the comprehensive solvency adequacy ratio is 127.7%, which is at the standard level. At the same time, the comprehensive risk rating result in the fourth quarter of 2023 is Class B, and the comprehensive risk rating result in the third quarter of 2023 is Class C. Changsheng Life Insurance said that the main reason for the improvement of risk rating was that the company strengthened its operation and management, making it difficult to capitalize the risk score increased.
In addition, many insurance companies failed to meet the Class C risk rating results, including three life insurance companies, namely, Huahui Life Insurance, Ping An Pension, United Life Insurance, and seven property insurance companies, namely, Qianhai Property Insurance, Dubang Property Insurance, Everest Property Insurance, Anhua Agricultural Insurance, Fude Property Insurance, Hua'an Insurance, Bohai Property Insurance.
Several companies said in their reports that the main risk situation with a comprehensive risk rating of C is the problem of corporate governance. For example, the comprehensive risk rating result of Anhua Agricultural Insurance in the fourth quarter of 2023 is Class C, which is mainly due to risks in corporate governance. "According to the rectification requirements of the regulatory authorities, the company is actively promoting the relevant rectification work and has made substantial progress." Huahui Life Insurance said that on the rectification work of issues related to corporate governance, the company has repeatedly studied and formulated rectification measures and reported to the regulatory authorities. The next step is to strengthen communication and reporting with regulators, and actively carry out corporate governance rectification according to their opinions.
When referring to the improvement measures, Fude Property and Casualty Insurance said that the chairman of the company has performed his duties and the three meetings and one floor have been in normal operation. The company will further improve its corporate governance and reduce its strategic risks. According to the report, the main risk conditions of Fude Property&Casualty Insurance, including 100 million yuan premium risk degree, negative significant public opinion, negative news rate, crisis degree and other indicators, all scored higher; The retrospective adverse deviation rate of net cash flow from operating activities decreased from 21.55% in the previous quarter to 187.81% in this quarter; The turnover rate of sales personnel rose from 7.32% in the previous quarter to 8.44% in this quarter.
In addition, United Life has been rated as Class C for 12 consecutive quarters. The company said in the report that the main reason was the high operational risk. In terms of liquidity risk, the dividend account and universal account of the company in the first quarter of 2024 are net outflows as a whole. The cash flow of universal conventional account is a net outflow, which is mainly due to the decrease of premium inflow and surrender and the increase of partial withdrawal outflow; The main reason for the net outflow of cash flow from the Universal 5 account is that there is a large scale of full payment for the product.
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