Original title: Observation of Foreign Insurance Enterprises | Capital Increase and Admission Hot! The income and net profit of American Asia Insurance and UNITA Property&Casualty Insurance increased simultaneously
Recently, a number of foreign insurance companies announced their 2023 results, which showed that their insurance business revenue and net profit grew simultaneously. At the same time, many foreign insurance companies chose to invest in China in addition to the multiple factors of policy liberalization and optimistic expectations.
On May 15, Zhongyi Property and Casualty Insurance Co., Ltd. announced that it agreed to PetroChina Group Capital Co., Ltd. transferred its 51% stake in Sino Italian Property and Casualty Insurance to Italian Zhongli Insurance Co., Ltd.
In addition, several foreign insurance companies, such as Swiss Re Ventures, HSBC Life and Sino Dutch Life, will continue to increase their investment in China in 2023 and 2022. Jonathan Rake, CEO of Swiss Re Enterprise Asia Pacific Region, said in an interview with the media earlier that as the world's second largest insurance market, the size of China's insurance market is expected to double in the next ten years. From 2024 to 2025, China's property insurance premium will grow strongly by about 8%, which is still attractive to foreign institutions.
On January 25, 2024, at the press conference held by the State Council Reform Office, Xiao Yuanqi, Deputy Director of the State Administration of Financial Supervision and Administration, said that the State Administration of Financial Supervision and Administration has launched more than 50 opening up measures.
Among them, there are two policies that have a greater impact on the opening up of the insurance industry. One is to cancel the restrictions on the proportion of foreign shares, including the restrictions on the proportion of foreign shares in financial institutions participating in, acquiring and increasing capital. Foreign capital can hold 100% of the shares of bancassurance institutions; The second is to significantly reduce the threshold for quantitative access to foreign investment, enrich the types of foreign institutions, cancel the original requirements for the size and operating life of foreign insurance institutions, and pay more attention to the comprehensive qualification evaluation of foreign investment.
Xiao Yuanqi said: "Foreign financial institutions have become a very important force in China's financial industry by deeply participating in China's economic and financial development and financial market operation."
Foreign insurance companies continue to increase investment in the Chinese market
At the end of January this year, Italian insurance giant Zhongli Insurance announced on its official website that it had signed an agreement to purchase 51% of the equity of Sino Italian Property Insurance at a price of about 99 million euros (about 774 million yuan). After the completion of the transaction, Zhongli Insurance will become a 100% controlling shareholder of Sino Italian Property and Casualty Insurance.
Zhongli Insurance has been in China for more than 20 years so far. It said that the acquisition of Sino Italian property insurance shares is a long-term strategic investment. Similarly, many foreign insurance companies believe that China is a strategically important market. In recent years, they have continued to increase investment in the Chinese market, and have taken measures such as large-scale capital increase, increasing shareholding ratio, and applying for new licenses.
In terms of capital increase, over the past three years, a number of foreign-funded insurance companies have increased their registered capital in varying degrees, such as UNITA Property Insurance (formerly known as "AVIC UNITA Property Insurance"), Aiheyi, Tongfang Global Life, HSBC Life, Swiss Re Enterprise Business, and Sino Dutch Life Insurance.
As for the latest round of capital increase, Pan Shaohui, General Manager of Swiss Re Ventures Insurance Co., Ltd. and CEO of Greater China, said, "Swiss Re Ventures has obtained the new round of capital increase of the Group, which reflects Swiss Re Group's confidence in the development of the Chinese market and its wish and commitment to take root in China for a long time.". He also believed that this capital increase would also have a positive impact on the company's financial situation and operating results, which would be in line with the company's overall interests and promote the company's sustainable, stable and healthy development.
The insurance business income and net profit of several foreign insurance enterprises increased simultaneously
According to the 21st Century Business Herald, the insurance business income and net profit of many foreign insurance companies will increase simultaneously in 2023.
In terms of insurance business income, except for Tokyo Marine and Allianz Life, their insurance business income decreased by 11.61% and 14.52% respectively compared with 2022, the rest of the foreign insurance companies have improved.
Among the foreign-funded insurance companies on the market, AIA Life Insurance, the only foreign-funded insurance company listed in Hong Kong shares, had the largest income, reaching 60.761 billion yuan, and its insurance business income also grew at a considerable 19.05% year-on-year. Among several unlisted foreign-funded insurance companies in the statistics, Sino Dutch Life Insurance will have the largest insurance business revenue in 2023, reaching 11.819 billion yuan, with a year-on-year growth rate of 31.67%; Next is Tongfang Global Life Insurance, with the insurance business income scale reaching 8.175 billion yuan, with a year-on-year growth rate of 15.56%; The income of HSBC Life Insurance business increased significantly last year, up 96.27% from last year to 7.311 billion yuan; AXA Tianping's insurance business income reached 6.535 billion yuan, up 7.57% year on year; In addition, the insurance business income of foreign funded insurance companies such as AIA Insurance, Swiss Re Enterprise Business, UNITA Property Insurance and Aiheyi Insurance increased from last year.
Oliver Bate, Chairman of the Board of Directors and CEO of Allianz Group, expressed his optimism and confidence in the Chinese market when he attended the China Development Forum 2023 as the foreign chairman. "China has always been one of the most important strategic markets of Allianz Group in the world and the core of Allianz Group's Asian growth strategy", Oliver Bate said that the Chinese market contains huge opportunities and will be the engine of Allianz's sustainable development. Allianz has made adequate preparations.
From the perspective of net profit, the net profit of Meiya Insurance in 2023 will be 293 million yuan, up 40.55% year on year; The net profit of UNITA Property&Casualty Insurance in 2023 is 330 million yuan, up 79.03% year on year; In 2023, the net profit of Aiheyi will be 80 million yuan, up 48.54% year on year. The net profits of Tokyo Marine, Tongfang Global Life, Allianz Life and Sino Dutch Life will decline by about 20% in 2023. Swiss Re Enterprise, AXA Tianping and HSBC Life Insurance are still losing money, but the losses of HSBC Life Insurance and AXA Tianping are smaller than last year.
The net profit of Meiya Insurance increased by 40% year on year. In its 2023 annual report, Meiya Insurance has achieved profits for eight consecutive years. In the solvency report of the first quarter, Meiya Insurance attributed the increase in profits to its better underwriting performance. "Due to the better underwriting performance, the company realized an underwriting profit of 75.98 million yuan and an after tax profit of 70.34 million yuan in this quarter, resulting in an increase of 81.12 million yuan in actual capital".
As for the reasons for the performance loss of HSBC Life Insurance, some insiders have analyzed that it is closely related to its high dependence on the sales of bancassurance channels. This dependence leads to an increase in sales costs, which in turn affects the profitability of the company. In addition, since last year, under the regulatory requirements, China's bancassurance channels have strictly implemented the "integration of reporting and banking", and insurance companies with a high proportion of bancassurance channels have been greatly impacted.
HSBC Life Insurance depends heavily on bancassurance channels in terms of business. The 2023 annual report shows that the top five products of HSBC Life Insurance in terms of original premium income, the top three products in terms of new payment of protection investment funds and the top three products in terms of new payment of investment linked insurance independent accounts are all bank agents as the main sales channels, accounting for about 90% of the total premium.
The continuous loss of AXA Tianping is also traceable. According to the analysis of insiders, the high comprehensive cost rate has become the obstacle to its development. The comprehensive cost rate is the main standard to measure the profitability of the property insurance industry. The lower the indicator, the stronger the profitability of property insurance companies. The comprehensive cost rate published in the solvency report of AXA Tianping in the fourth quarter of 2023 is 107.24%. This may be related to many factors. For example, the higher underwriting cost of new energy vehicle insurance is a common problem faced by the entire vehicle insurance industry.
However, AXA Tianping is actively expanding its diversified product strategy beyond auto insurance in recent years, and has developed markets such as health insurance, tourism insurance and accident insurance.
Strategy of foreign insurance companies in China: focusing on long-term sustainable development
It is worth noting that many foreign insurance companies have shown their determination to gain more share in the Chinese market and accelerate their expansion, and have formulated a series of strategies and plans to achieve this goal.
For example, as an AXA Tianping that has entered China for many years with a single property business, its chief executive officer (CEO), Zuo Weihao, recently said in an exclusive interview with reporters from the 21st Century Economic Report that in the past few years, AXA Tianping has made great efforts in diversification, implementing business diversification step by step. He pointed out that because China's economic development rate has maintained a relatively stable and rapid growth, AXA Tianping is very confident about the overall prospects; Secondly, compared with other foreign markets, the depth and density of domestic insurance still have much room for growth and development; From the perspective of company layout, AXA Tianping started to develop its products in a diversified way from 2019, and the strategy of diversified development will continue.
Zuo Weihao said that AXA Tianping has enough confidence to operate its business in China for a long time.
Swiss Re Enterprises and Merchants, which just completed capital increase last year, set up a representative office in Shanghai as early as 2010, and officially entered the Chinese market in 2015, mainly engaged in non auto insurance business, including property insurance, accident and health insurance, liability insurance, construction insurance, credit guarantee, global insurance policies, etc.
Jonathan Rake, CEO of Swiss Re Enterprise Business, said recently that the company's development plans for this year and the next five years did not include too many expansion goals, but focused on long-term sustainable development, looking for new opportunities in the process of long-term sustainable development.
Jonathan Rake added that, in addition to the core business in the large business field, Swiss Re Enterprise also plans to use technology and channel partnerships to expand its business to target medium-sized markets to meet the growing demand for risk reduction. At the same time, Swiss Re industry also supports Chinese enterprises to go global through global insurance policy projects and letter of guarantee business. Among the top ten international contractors in China, Swiss Re Enterprises have now participated in the international guarantee services of seven of them.
Recently, Li Li, assistant to the general manager of Tokyo Marine Japan Action (China), publicly introduced the local strategy of foreign insurance companies. She said that since Tokyo Marine Japan Action (China) has been operating in China for 30 years, it has become a charming company that contributes to China's economic development and social prosperity by providing safe and secure services. In the future, as a participant in China's reform and opening up and economic development, the company will further comply with the general trend of China's development, actively implement the requirements of the "five major articles", and contribute to the construction of China's financial power.
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Editor in charge: Cao Ruitong
