All kinds of capital that used to be keen on insurance licenses are becoming more and more rational and prudent. Recently, Minsheng life’s 728 million shares were listed for the third time in Shenzhen United Property Exchange after two unsuccessful transfers. On January 23, according to incomplete statistics by the Beijing business daily, a total of 8 insurance companies have been listed for transfer. Among them, the mixed reform projects of Yingda Taihe property insurance and Yingda Taihe life insurance have not been listed for half a year, and the equity of reassuring property insurance has been listed for transfer for many times.
Insiders pointed out that the cold or overheating of equity is essentially the result of the comprehensive balance between investment cost and income of potential investors before equity investment. The regulatory review on the qualification of shareholders is more strict, and some investors have been “discouraged”.
the insurance license is cold, and the equity of many insurance companies is not wanted
After two unsuccessful listing transfers, on January 20, 728 million shares of Minsheng life insurance (accounting for 12% of the total shares) appeared in Shenzhen united property exchange for the third time.
In addition to being listed on Shenzhen United Property Exchange three times, this equity of Minsheng life has also been listed on Beijing United Property Exchange and Ali judicial auction platform, but so far no buyer has appeared.
According to the project information, this equity refers specifically to the rights and interests determined in the execution ruling (2018) Jing 03 Zhi Hui No. 6 issued by the third intermediate people’s Court of Beijing. The reporter of Beijing business daily further inquired about the relevant judgment documents and found that the executee involved in this equity is Shanxi Jianlong iron and Steel Co., Ltd. (formerly known as “Haixin iron and Steel Group Co., Ltd.”), It has been changed to China Minsheng Banking Corp.Ltd(600016) and belongs to China Minsheng Banking Corp.Ltd(600016) .
Although it has not been “favored” by the capital, Minsheng life is not a “poor student” with annual losses. The project information shows that by the end of 2020, Minsheng life has total assets of 115.3 billion yuan, net assets of 15.1 billion yuan and net profit of 2.42 billion yuan, which has been profitable for 11 consecutive years. By the end of the third quarter of 2021, its comprehensive solvency adequacy ratio was 323% and its core solvency adequacy ratio was 306%, far higher than the industry average of 242.5% and 230.5% respectively.
In fact, Minsheng life is not the only insurance company that is not “favored” by capital. On January 23, the reporter of Beijing Business Daily found that at present, the equity of 8 insurance companies are for sale in various property rights exchanges and judicial auction platforms, including Yongcheng property insurance, Guoren property insurance, Anxin property insurance, etc.
Among them, the mixed reform projects of Yingda Taihe property insurance and Yingda Taihe life insurance have been listed for half a year, and no investor has announced its contribution at present. Yongcheng property insurance 165.528 million shares (accounting for 7.6% of the total share capital) have been listed in Shanghai United equity exchange for three months. January 24 is the expiration date of listing. At present, no investor has announced its acceptance.
In addition, in December 2021, Beijing United Equity Exchange listed a capital increase project for a property insurance company. The property insurance company plans to introduce 2-3 investors, with a corresponding equity ratio of no more than 44%. According to media reports, the company is a reassuring property insurance company with cash flow emergency and fruitless capital increase for many times.
stricter supervision and more rational capital for insurance licenses
Once, it was difficult to obtain an insurance license. All kinds of capital flocked to the equity of insurance companies in order to layout the insurance industry.
Take Beijing Weimeng Chuangke Network Technology Co., Ltd., a “Sina” company, as an example. In order to win the license, the company planned to establish Sina life, launched Sina mutual aid, an online mutual aid platform, and announced its investment in Xinmei life, but retreated when investing in Xinmei life and did not participate in the capital increase project of Xinmei life for the time being.
Why is the equity of insurance companies no longer sought after? First, the regulatory review of shareholders’ qualifications has become stricter, and some investors have been “discouraged”. With the implementation of 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 requirements for investors and shareholders of insurance companies are becoming more and more strict. In 2018, Huaye capital intended to take a stake in Great Wall life, but was forced to abandon the plan to acquire the equity of Great Wall life because the performance loss of the parent company and the source of funds for acquisition could not be regarded as its own funds and could not meet the qualification of shareholders of the insurance company.
For the situation that Internet companies are keen on insurance licenses, the supervision has also corrected the deviation to a certain extent. In April 2021, the central bank, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and other departments jointly interviewed 13 Internet platform enterprises engaged in financial business, including Tencent, sina finance and JD finance, requiring all companies to strictly implement the requirements of prudential supervision, improve corporate governance, implement the requirements of “two participation and one control” for investment in bank insurance institutions, and carry out Internet deposit and loan and Internet insurance business in compliance and prudence, Prevent the risk of network mutual assistance business.
In addition to stricter access, capital will also weigh the pros and cons when investing in the equity of insurance enterprises. Hao Chen, associate professor of China Institute of corporate governance at Nankai University, said that the cold or overheating of equity is essentially the result of the comprehensive balance between investment cost and income of potential investors before equity investment. The current profitability of the proposed equity insurance enterprise is an important factor. The loss or meager profit of the insurance company requires the potential investor to be a patient shareholder. At the same time, the relationship between major shareholders and even the relationship between shareholders and management will also affect the investment decisions of potential investors.
In addition, the increased economic pressure on the investors themselves is also an important reason for the cold equity of the insurance company. The director of the public relations department of a large holding group that has taken shares in the property insurance company told the Beijing Business Daily that the group had intended to take shares in a life insurance company to win the life insurance license and realize “complete life and production”. However, the company’s performance in the past two years was poor and it was difficult to raise sufficient funds, Relevant plans can only be shelved.
