Recently, insurance companies batch corrected or updated the solvency report of the first quarter. According to the statistics of the reporter of Securities Daily, as of May 22, 16 insurance enterprises have updated or corrected the solvency report on the official website of China Insurance Industry Association. At the same time, under the new rules of the second generation phase II project, the solvency adequacy ratio of insurance enterprises generally decreased, and six companies applied for the transitional period policy of the second generation phase II project.
Insiders said that under the second generation phase II project, insurance enterprises have a stronger demand for capital. On the one hand, it is expected that the scale of exogenous capital supplement will be at a high level. On the other hand, insurance enterprises must strengthen endogenous capital supplement to ensure sufficient solvency.
disclosure indicators increased significantly
According to the requirements of the second generation of compensation project, the insurance industry will fully implement the second generation of compensation project this year, and some companies can apply for the transition period policy, which will be fully implemented no later than 2025. In the first quarter of this year, insurance companies disclosed solvency reports as required.
According to the new rules, the data that insurance companies need to disclose quarterly has increased significantly, including the previously disclosed return on investment and comprehensive return on investment, the comprehensive cost ratio and loss ratio of property insurance companies, and the benefit indicators, scale indicators and quality indicators of life insurance companies.
“Some companies are still not familiar with the relevant requirements of the second generation phase II project, so that there were errors or incomplete disclosures in the first quarter solvency report.” The chief actuary of a life insurance company told reporters that this is an important reason why many insurance companies have corrected or updated their solvency reports recently. According to the reporter’s statistics, as of May 22, 11 property insurance companies and 5 life insurance companies have corrected or updated the solvency report, and one of them has updated it twice.
Generally speaking, the solvency of the second generation insurance industry has declined. Among the insurance companies that have published solvency reports in the first quarter, about 67% of the company’s core solvency decreased month on month. The solvency of 9 insurance companies did not meet the standard, of which 8 companies were rated as class C or below, and the solvency adequacy ratio and comprehensive rating of 1 company did not meet the requirements for the solvency of insurance companies in the regulations on the administration of solvency of insurance companies.
In addition, in addition to the insurance companies that are still under takeover, there are 10 companies such as Shanghai life, Zhujiang life, Evergrande life and Zhongrong life, whose solvency reports in the first quarter are “absent”, and some companies have not disclosed solvency reports for two consecutive quarters.
On the reasons for the “Absence” of the solvency report, an insider of a life insurance company told reporters that the company’s audit institution asked for more information and information. At present, the relevant work has not been completed.
apply while replenishing capital
Under the second generation phase II project, the solvency adequacy ratio of the insurance industry generally declined, and the demand of insurance enterprises for capital further increased. In this context, insurance companies actively replenish capital. At the same time, six insurance companies disclosed in the solvency report that they applied for the transition period policy of the second generation phase II project.
According to insiders, from the perspective of capital sources, the ways of capital supplement of insurance institutions are divided into exogenous capital supplement and endogenous capital supplement.
According to the statistics of public information, since this year, about 20 insurance enterprises plan to supplement the total capital by increasing capital and issuing bonds, with a total amount of more than 50 billion yuan. According to the data of China Banking and Insurance Regulatory Commission, in 2021, the insurance industry supplemented 71.748 billion yuan of external capital, including 17.479 billion yuan of capital increase by shareholders of 20 insurance companies and 54.269 billion yuan of capital supplement bonds and subordinated term debt issued by 21 insurance companies. It can be seen that insurance companies have a strong demand for capital this year.
In addition to promoting exogenous capital replenishment, some insurance companies said they would actively promote endogenous capital replenishment. For example, Changsheng life insurance said that in the first quarter, its core solvency and comprehensive solvency adequacy ratio were 129.9% and 155.8% respectively. Affected by the second generation and phase II project, its solvency was improved compared with the previous quarter. However, because it is still in the early stage of profitability and has not entered the stage of capital self creation, its solvency will continue to decline in 2022. The company said that it would optimize the matching of assets and liabilities and delay the decline of solvency by adjusting the product structure and appropriately allocating long-term government bonds at the right time.
In response to the new requirements of the second generation phase II project, some insurance enterprises have applied for the transition period policy. According to the reporter’s statistics, many companies such as Bohai property insurance, DuPont insurance and Fosun United health insurance have applied for the transition period policy and obtained approval.
DuPont insurance said that although the approval and implementation of the transition period policy can greatly improve the solvency of the current company, the risk factor will gradually increase in annual units over time until the end of the transition period in 2025. The company has applied to all shareholders and approved by the board of directors. In the near future, shareholders will increase the capital of the company by 400 million yuan in the same proportion to alleviate the pressure on solvency and ensure the healthy and stable development of the company.
Fosun United Health said that in order to improve its solvency, the company will take endogenous measures, including improving profitability, optimizing product structure and improving risk management ability; According to the requirements of solvency regulation II, it is planned to take reasonable exogenous measures, such as capital increase and share expansion, to supplement core capital to consolidate capital quality and improve capital structure.
