The "insurance asset management version" ABS accelerated, and the registration scale exceeded 100 billion yuan for the first time during the year, an increase of more than 60%! In the industry: it is still niche, and the amount of space is large

The scale of the asset securitization business (ABS) of the insurance asset management version hit a new high this year. According to the statistics of China Insurance Company, as of December 2, the asset-backed plans of insurance asset management institutions have registered a total of 28 since the beginning of this year, with a scale of more than 110 billion yuan, which is the first time in recent years that it has exceeded 100 billion yuan from public information.

Since the asset-backed plan was changed from the approval system to "initial review and follow-up registration" in June 2019 and then to "initial review and follow-up registration" in September 2021, insurance asset management has gradually matured and accelerated this ABS business, and more insurance asset management institutions have gradually laid out this business.

Ping An Assets and other institutional layouts

The asset-backed plan business is the asset securitization business (ABS) of the insurance asset management version, that is, the insurance asset management institution establishes an asset-backed plan as the trustee, supports the cash flow generated by the underlying assets as repayment support, and issues benefit certificates to qualified investors such as insurance institutions.

Combined with the data of China Insurance Asset Registration and Trading System Co., Ltd. (hereinafter referred to as China Insurance Deng), the statistics of the Chinese reporter of the securities company show that as of December 2 this year, insurance asset management institutions have registered a total of 28 asset-backed plans, with a scale of 114.24 billion yuan, which is a significant increase of 60% over the annual registration scale in 2020.

Since July 2019, Zhongbaodeng has been responsible for the registration of asset-backed plans, and issued a total of 8 registration notices in 2019, with a registration scale of 11.501 billion yuan. According to the reporter's statistics, in 2020, a total of 24 asset-backed plans were registered on the Zhongbaodeng platform, with a registration scale of 71.277 billion yuan.

Since July 2019, more than 10 insurance asset management institutions have registered asset-backed schemes in China Insurance. Among them, Ping An Assets has the largest business volume and is much higher than other institutions, with a cumulative registered asset-backed plan of more than 20 products and a scale of more than 95 billion yuan. It is followed by Huatai Asset Management and Yangtze River Pension, which registered asset-backed plans of about 38 billion yuan and 20.8 billion yuan respectively.

In addition, many institutions such as China Life Investment Insurance Asset Management, Taiping Assets, PICC Investment Control, Centennial Insurance Asset Management, and CPIC Assets have also registered asset-backed plans as managers.

 

From the perspective of the underlying asset classes of these asset-backed plans, Zhongbaodeng has said that it includes: factoring claims, reverse factoring claims, non-performing asset restructuring, financial leasing, financial leasing, small loans, fund shares, infrastructure fee income rights, and trust claims.

From the registration system to the registration system, more institutions carried out

As a type of asset securitization business (ABS), on the one hand, the asset-backed plan can provide relevant enterprises with financing channels other than traditional financing methods, so as to achieve the purpose of relying on high-quality assets for financing, getting rid of their own credit restrictions, and improving their balance sheets; on the other hand, it also brings investors the opportunity to directly invest in high-quality assets, realize investment diversification, diversify investment risks, and effectively serve the real economy.

The rapid development of China's asset securitization business began in 2014, and the official opening of the asset-backed plan by insurance asset management originated from the interim measures for the management of asset-backed plan business issued by the former China Insurance Regulatory Commission in August 2015. According to public information, the first asset-backed plan was issued by Minsheng Tonghui Asset Management Company as the trustee and manager of the "Minsheng Tonghui - Far East Leasing No. 1 Asset-Backed Plan". Earlier, insurance asset management had experienced the pilot stage of the project asset-backed plan, and at that time, Minsheng Tonghui had launched asset securitization products such as "Minsheng Tonghui - Alibaba Financial No. 1 Project Asset Support Plan".

In the process of development, the establishment and issuance system of asset-backed plans has undergone several market-oriented reforms. At the beginning of 2015, the implementation of "initial declaration and approval, similar products after the report"; in June 2019, it was changed to "initial declaration approval, follow-up product registration", and the asset-backed plan issued after the first asset-backed plan of insurance asset management institutions implemented the registration system management, which was handled by China Baodeng; in September 2021, the CBIRC changed the asset-backed plan to "initial declaration approval, follow-up product registration", and the asset-backed plan was officially changed from the registration system to the registration system.

Subsequently, more insurance asset management institutions have entered this business. For example, In early November this year, China Life Asset Management released news that the "Chinese Life-Jade No. 1 Asset-Backed Plan" product initiated by it was issued, and the "Everybody Asset - Far East Leasing No. 1 Asset-Backed Plan" initiated by Big Assets was approved by the Banking and Insurance Regulatory Commission on November 30, and the two insurance asset management institutions added asset-backed plan business to the alternative business map.

It is still niche in the ABS business and is more in line with the characteristics of insurance funds

Throughout the development of asset-backed plans in recent years, the regulatory authorities have continuously deepened the "decentralization service", which has greatly improved the efficiency of product issuance, making asset-backed plans an important way for insurance funds to serve the real economy. However, from the perspective of the asset securitization business of the entire market, the asset-backed plans of insurance asset management companies are still niche, and there is still a certain gap in volume compared with the asset securitization business of trust companies and securities companies.

For example, in terms of trust ABS business, China Xindeng data shows that in November this year, the scale of asset securitization trust business of new trust companies as direct issuers was 181.389 billion yuan, that is, the scale of issuance in a single month was more than 100 billion.

In the field of securities, the asset securitization business has also developed rapidly since the filing system at the end of 2014. According to the data of the Asset Management Association, in recent years, the number of asset securitization products of enterprises on record every month has been about 100, and the scale of filing is about 100 billion, and the business volume of enterprise ABS is much higher than that of insurance asset management plans. From the perspective of existence, as of the end of October 2021, there were 2303 asset securitization products of existing enterprises, with an existing scale of 2.27 trillion yuan.

For the differences in ABS business in different fields of banking, securities and insurance, a senior asset-backed plan business person told the Chinese reporter of the securities company that from the perspective of issuance procedures and efficiency, the asset-backed plans of insurance asset management have been close to the ABS business in other fields, but there are still differences in the issuance methods of ABS in different fields.

He said that the asset-backed plan is a private placement product, classified as a "non-standard" product, so the difficulty of issuance is slightly higher. "Banks prefer to buy 'standards,'" he said, adding that in contrast, ABS issued by trust companies and securities companies is a standardized securities product, and many investors are banks.

At present, the main investors in the issuance and establishment of asset-backed plans by insurance asset management are still insurance funds, and some institutions still subscribe to the insurance funds of the parent company after issuing asset-backed plans, that is, "their own issuance and self-digestion". As a result, the asset-backed plan of insurance asset management is also a type of product that is more in line with the characteristics of insurance capital in many ABS businesses.

In the view of another person in charge of insurance asset management, due to the characteristics of private placement and non-standard, the asset-backed plan of insurance asset management is not dominant in terms of overall cost for the financing party. The financier is willing to adopt the asset-backed plan approach, more because of the insurance funds behind it.

In terms of the issuance rate of asset-backed plans, some products have public information for certain reference. For example, in November this year, Taikang Life disclosed a related party transaction showing that the issuance scale of the "Yangtze River Pension - Supply Chain No. 1 Asset Support Plan" did not exceed 10 billion yuan, which was issued in installments, and the funds were used for the transfer of accounts receivable assets under the underlying transaction contract by specific suppliers as the original equity holders, and there was a credit enhancement method, and the external rating was AAA. Its investment term is 1 year, the yield before VAT is 4.25%, and the expected yield after VAT is 4.1032%.

In theory, all projects with stable cash flow can be revitalized through asset securitization. Insurance asset managers believe that some large-scale infrastructure projects invested in through debt plans and other projects have stable cash flow and need to be revitalized, so insurance asset management also has the unique advantage of issuing ABS.

Editor-in-charge: Li Xuefeng