From being sought after by capital to being ignored, the equity of insurance companies can be described as a roller coaster ride. On April 6, the 10% equity of Qianhai reinsurance held by tengbang international was auctioned for the second time. The starting price was 265 million yuan, which was 20% lower than the evaluation price. As of the time of publication, no bid had been made.
Qianhai reinsurance is not an example. There are not a few insurance companies that have been frequently discounted and sold in recent auctions. Not only that, many companies’ equity listing and transfer and pilot war investment projects have not been listed below. Looking back at the prosperity of capital’s hot pursuit of insurance equity around 2016, the equity of insurance companies has changed from “sweetie” to “Mrs. Niu”.
capital boom retreats, insurance equity is cold
The auction price of Jingbang reinsurance platform was RMB 1.0 billion, with a starting price of RMB 6.5 billion, which is the second auction of Jingbang reinsurance platform, which is under way after the first auction, with a starting price of RMB 1.0 billion. As of press time, the project has attracted more than 2400 onlookers, 56 attention reminders, 1 registration, but no bid. The auction platform information shows that if there is still no bid by 10:00 on April 7, the project will be sold again.
In fact, the equity was auctioned at a discount, and it is not only Qianhai reinsurance that has not found a buyer yet. Recently, Alibaba auction showed that Fuzhou Tiance Industrial Co., Ltd. held a 70% discount auction of the equity of a life insurance company, which also suffered a flow auction.
However, not all equity auctions ended in a stream auction. On March 8, the 19.5% equity of Fosun United Health Insurance held by Guangdong Yihua Real Estate Development Co., Ltd. was auctioned for the second time and finally auctioned by Beijing Heping United Technology Co., Ltd. for 112 million yuan. However, the reporter of Beijing Business Daily found that the transaction price of the equity was only 5.6% of the evaluation price of 201 million yuan.
In addition to the discount and auction of the equity of insurance companies passively auctioned, it is also difficult to find investors for strategic investment projects and equity transfer projects actively listed by some insurance companies or their shareholders. The reporter of Beijing business daily noted that in November 2021, the 7.6% equity of Yongcheng property insurance held by Datang asset management was listed and transferred in Shanghai property exchange. The listing deadline of the project has been postponed for many times from December 17, 2021 to April 8, 2022, but there is still no news of buyer investment in the market. Previously, Great Wall Life Insurance and China road insurance both said they would introduce strategic investors, but at present, the two companies have not announced the process and results of lead war investment.
The equity of established insurance companies has cooled, and some insurance companies in the process of preparation are “stillborn”. Since 2022, western agricultural insurance and Huacheng life insurance have been announced to terminate their investment and establishment. As for the reasons for giving up the preparation, Huacheng life’s investors, listed companies Guangdong Highsun Group Co.Ltd(000861) , Chunxue pharmaceutical, Kingfa Sci.& Tech.Co.Ltd(600143) said that considering the changes of macroeconomic environment and financial policies in recent years, Huacheng life’s preparatory group and sponsors decided to terminate the preparation of Huacheng life through consultation.
equity investment should focus on long-term return
What happened behind all this?
For the situation that the equity of insurance companies is discounted and sold, and it is difficult to find strategic investors, Li Wenzhong, deputy director of the insurance Department of Capital University of economics and trade, said that the reduction of equity auction and new license application is the inevitable result of market operation. The return on investment in insurance companies is not as good as before, and the equity attraction of insurance companies naturally decreases.
Li Wenzhong further analyzed and pointed out that in recent years, the insurance industry has entered the adjustment cycle, the market environment faced by small and medium-sized insurance companies has changed, and it is more difficult to make profits. The continuous and strict supervision of the insurance industry by the regulatory authorities also deterred those investors who hoped to achieve other purposes through illegal operation after the establishment of insurance companies.
The reporter of Beijing business daily noted that in the past two years, the development of the insurance industry has made rapid progress, and the speed has slowed down significantly. According to the data of China Banking and Insurance Regulatory Commission, in 2021, the insurance industry achieved a cumulative original premium income of 4.49 trillion yuan, a slight decrease of 0.79% year-on-year. At the same time, the regulatory review of the qualification of insurance company shareholders has become more and more rigorous. After the promulgation of new regulations such as the measures for the administration of equity of insurance companies and the measures for the supervision of the behavior of major shareholders of banking and insurance institutions (for Trial Implementation), the access of insurance company shareholders has been further tightened and the supervision of stock right structure has been strengthened.
“The continuous auction of the equity of insurance companies also shows that some institutions have problems in the valuation of the equity of insurance companies, which can not truly reflect their market value.” Li Wenzhong added.
However, some insiders believe that, as a risk management industry that needs fine operation, insurance needs long-term investment and should not be excessively pursued by capital seeking rapid return. Li Wenzhong also said that the safety of insurance companies is related to people’s well-being and social stability, and the return period of investment is relatively long. Capital has a strong profit seeking nature and is keen on “making fast money”, which is in conflict with the long investment return period of insurance companies. The equity of insurance companies is wildly pursued by capital, which is not conducive to the stability and safety of insurance companies. In other words, investment in the insurance industry should have the concept of long-term investment, not lack of responsibility and responsibility, and achieve multi win through intensive cultivation.
