Southern Finance and Economics All Media Zheng Jiayi Intern Cheng Wenli Beijing reported that earlier, the capital side represented by listed companies and various private capitals was enthusiastic about the establishment of insurance companies, hoping to obtain an insurance license and use insurance funds to feed back industrial development.
Since the issuance of insurance licenses was tightened in 2016, many capitals have been struggling with a long waiting period for preparation, and have instead purchased an insurance license by acquiring equity and increasing the registered capital of insurance companies.
In today's market, there are both "alternative" shareholders of insurance companies who have been waiting for a long time with number plates, and there are also "unpopular" shares that are frequently cold on the auction floor and can only find buyers' "unpopular" shares through multiple auctions, price reductions, and even selling.
What is the "gold content" of insurance equity in the financial market? Is the insurance license still a "fragrant food" in the eyes of various capitals? Which capitals are still actively laying out the insurance market? Which shareholders do regulators prefer to approve to enter the market?
Based on the 30 equity change plans and 39 capital increase plans launched by insurance companies after 2021, 40 equity auctions of insurance companies since 2016 in the Ali Auction and Judicial Website, and the approval of insurance capital increase and share expansion plans by the Banking and Insurance Regulatory Commission and its branches in recent years, the 21st Century Business Herald analyzes the five major industry trends involving insurance equity.
Trend 1: The threshold for insurance shareholders is raised again
An analysis of the number of insurance companies established, equity changes and the number of capital increase plans approved shows that since 2016, regulators have continuously raised the threshold for shareholders of insurance companies by restricting the issuance of insurance licenses.
In 2016, the former CIRC issued more than 20 licenses, while since 2019, only three insurance companies have been approved to open.
Not only that, after the establishment of insurance companies is hopeless, it is difficult for enterprises that hope to obtain the "admission ticket" of the insurance market through equity changes, capital increases and share expansions. According to statistics, since 2021, only three of the 31 equity change plans disclosed on the website of the insurance industry association have been approved by the Banking and Insurance Regulatory Commission and its branches.
He Xiaowei, head of the Department of Risk Management and Insurance of the Insurance College of the University of International Business and Economics, said that the regulatory authorities have strengthened the monitoring of the equity governance of insurance companies and restricted the entry threshold of shareholders, which is an insistence on the principle of "insurance surname insurance".
"In the past few years, insurance companies have poured into a number of investment capital, such shareholders value short-term returns, instability, easy to appear in violation of laws and regulations, resulting in some insurance companies equity governance problems, such as major shareholder manipulation, internal transactions, illegal related party transactions, etc." In recent years, the Banking and Insurance Regulatory Commission has made great efforts to promote corporate governance and implemented a series of measures, including penetrating supervision, to improve the chaos. He Xiaowei said, "Now the regulatory level tends to choose companies with stronger stability and predictability, and encourages deep ploughing in the insurance industry, which is the tone of supervision in recent years and a return to the original intention of insurance." ”
Public information shows that after 2018, the regulatory authorities have successively issued and revised a number of documents such as the Measures for the Administration of Equity of Insurance Companies and the Measures for the Administration of Related Party Transactions of Insurance Companies, and required insurance groups to strengthen governance supervision in the Measures for the Supervision and Administration of Insurance Group Companies, with a concise, clear and penetrating equity structure, clarify the reasonable level of equity control of subordinate member companies, and strengthen the main responsibility of insurance group companies for the governance of the entire group company.
Trend 2: Financial and technology companies add insurance equity
Compared to other industries, financial, investment, and technology companies have shown greater enthusiasm for insurance equity.
According to the data, in the 39 insurance company capital increase plans announced after 2021, more than 50% of the capital increase shareholders come from investment companies, insurance groups and other financial institutions, Chinese Life, Ping An of China, China Pacific Insurance, China Taiping, China Insurance and other insurance groups have participated in the capital increase projects of their subsidiaries to provide funds and technical support; at the same time, in the 39 capital increase plans, a total of 13 new shareholders want to enter the insurance industry through capital injection, of which 4 shareholders are technology companies. The list of shareholders planning to increase capital is also common in Internet companies such as Tencent, Sina, and Vipshop.
He Xiaowei said that financial institutions and technology companies have favored the equity of insurance companies in recent years, or because their own business can adapt to changes in insurance business and insurance market.
"Insurance is a relatively professional category, and its business is different from bank securities and trusts. Out of operational needs, financial institutions will pursue 'full license'. Insurance licenses can help them achieve business synergy and mixed operations, and investing in insurance companies is a common choice for financial institutions. He Xiaowei said.
At the same time, He Xiaowei pointed out that the entry of technology companies into the insurance market may be related to the background of the development of insurance technology and digital transformation in recent years, "In recent years, the insurance industry has made great progress in technology and digitalization, and many technology companies have noticed this trend." For technology companies, combining technological advantages with insurance business is bound to bring new profit growth space, and technology companies that notice this will have a preference for insurance equity. ”
Trend three: Local state-owned assets are keen to hold shares in local insurance companies
It can be seen from the operating areas and enterprise nature of insurance companies and their capital increase shareholders that local state-owned assets in many places tend to invest in local insurance companies.
For example, in the new capital increase plan of Soochow Life, Suzhou International Development Group, Suzhou Su Gaoxin Group, and Suzhou Urban Construction Investment and Development, a number of local state-owned asset holding companies in Suzhou are listed; the capital increase plan of Zhonglu Property insurance involves Qingdao Guoxin Development (Group), Qingdao Guoxin Financial Holdings, Qingdao Metro Financial Holdings, and Qingdao Jinjiaozhou Asset Management four Qingdao state-owned asset background companies; Bohai Property Insurance capital increase plan involves Tianjin TEDA International Holdings and Tianjin Bohai State-owned Assets Two Tianjin State-owned Assets Background Companies.
He Xiaowei said that the local state-owned assets into local insurance companies are the characteristics of the development of local state-owned assets in recent years, at present, there have been many provinces and local local state-owned assets into one or even more insurance companies, the categories involving property insurance, life insurance, agricultural insurance, and various types of insurance.
"In recent years, more and more governments have recognized the importance of insurance. Whether it is property insurance, life insurance or other types of insurance, there is a lot of room for development, and the implementation of many local policies requires insurance companies to operate and provide protection. If local state-owned assets can successfully purchase an insurance license, they will have an advantage in carrying out local business, which is a natural choice. He Xiaowei said.
Trend four: the development model and other factors on the equity "gold content" impact weight increased
Different from the publicity of the insurance industry association, in the equity auction field, insurance companies are frequently cold, and more than half of the equity is auctioned at one auction, and can only find buyers through multiple auctions, price reductions, and even selling.
According to the data, the Ali auction and judicial website has published a total of 40 insurance equity auctions since 2016, of which a total of 30 equity have been auctioned and only 11 have been successful. In terms of price, the valuation agency's positioning of the equity price of the insurance company is concentrated at 1-1.5 yuan per share, the average price is 1.50 yuan, and the average price of one auction is 1.60 yuan per share, and the average transaction price is 1.24 yuan per share, with an average decrease of 22.5%.
He Xiaowei said that in today's insurance market, factors such as equity structure, legal disputes, shareholder capacity, and company development model may have a greater impact on equity prices.
"The coldness of poor investment targets can reflect from the side that the insurance industry already has good investment targets, which is a reflection of market progress." He Xiaowei said, "The price differentiation in equity transfer is normal. After the reduction of corporate governance problems in the insurance industry, investors' choices have increased, and they are naturally more inclined to have a clear equity structure, no historical disputes, and a healthy development model for insurance companies, which also makes the above problems increase the weight of the impact on equity prices. ”
Trend 5: With the support of opening up policies, China's insurance market still has a strong attraction for foreign investment
As the degree of opening up of the insurance industry to the outside world continues to escalate, many foreign insurance companies have increased their layout in the Chinese market.
Since 2021, among the 30 equity change plans publicly disclosed by the insurance industry association, a total of 7 plan transferees are foreign-funded enterprises, and the equity ratio is significant and the amount is large; the data shows that since 2021, a total of 3 equity change plans involve more than 30% of the equity of the enterprise, and the above plans are participated in by foreign insurance companies, two insurance companies intend to be transformed into wholly foreign-owned companies, and one foreign-funded enterprise intends to become the controlling shareholder. In addition, foreign insurance companies such as AIA Group, Allianz Group and Chubb Group have frequently attracted market attention in the Chinese market.
He Xiaowei said that the basic logic of foreign insurance companies to increase the Size of the Chinese market is to recognize the potential of China's insurance industry, and the driving factor is the mainland's escalating opening up policy in recent years.
"Foreign insurance companies have been making 'big moves' in the past two years, and the first reason is undoubtedly optimistic about the insurance market." In addition, the favorable policies of the regulators in the past two years have also been a driving factor. He Xiaowei said, "In the past, foreign insurance companies had strict shareholding ratio restrictions in China, especially life insurance companies, which could not be wholly owned." After the policy is liberalized, foreign insurance companies can not only set up life insurance holding companies, but also set up insurance groups. Concessions in mainland policy are a huge boost for foreign investment. ”
At the same time, He Xiaowei said that the introduction of foreign competition is not only for foreign investment, but also for China's local insurance market. "The current market share of foreign insurance companies is still very low, which is not a threat to Chinese insurance companies. However, they have precipitated advanced business experience and technology in history, especially in terms of business standards, which are worth learning from many Chinese-funded companies. Promoting such a force to enter the insurance market can promote the development of Chinese-funded insurance companies. ”
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