Text | Bullet Finance Lili
Edit | Egg total
China Pacific Insurance (Group) Co., Ltd. (hereinafter referred to as "CPIC"), which has passed its first year, has recently ushered in a major change in the top management.
On December 11, CPIC announced that the 29th meeting of the 9th board of directors agreed to elect Fu Fan as the chairman of the 9th board of directors of the company, and agreed to appoint Zhao Yonggang as the president of the company, and also added non-executive director candidate Li Zhenghao and independent non-executive director candidate Jin Hongyi.
Behind the handover of CPIC's top management is the continued downturn in the current capital market, the long-term challenges faced by insurance companies' asset side, and the impact of factors such as the switch of new standards and catastrophes, which have put CPIC's profits under pressure.
As you can imagine, there are many difficult problems facing the new leadership of CPIC.
1. Taibao welcomes the era of "Fu Zhao matching".
CPIC announced that Fu Fan and Zhao Yonggang's appointments will take effect after the approval of the regulatory authorities' qualifications. Until the qualifications of Fu Fan and Zhao Yonggang are approved, Kong Qingwei will continue to perform the duties of the chairman, and Fu Fan will continue to perform the duties of the president.
There were signs of this bombshell news before. According to the Shanghai Securities News and other media reports, CPIC held a meeting of cadres and announced that Fu Fan would be appointed secretary of the CPIC party committee and Zhao Yonggang would be appointed deputy secretary of the CPIC party committee. Kong Qingwei is no longer the party secretary of the CPIC due to his age.
Earlier, the official WeChat public account of "Shanghai Release" released a public announcement about the pre-appointment of Shanghai management cadres. Among them, Fu Fan, the current general manager and deputy secretary of the Party Committee of CPIC, has been newly adjusted to be appointed as the principal of the municipal enterprise. At that time, it was already reported that Fu Fan may take the position of chairman of China Pacific Insurance.
According to the official website of CPIC, Fu Fan, 59, has served as deputy general manager of China Investment Industrial Investment Company, deputy general manager of China Investment Morgan Fund, chairman of Shanghai State-owned Assets Management Co., Ltd., and general manager of Shanghai International Group, and has rich experience in asset management and insurance and other financial fields.
Photo / China Pacific Insurance official website
In November 2019, Fu Fan joined CPIC as Deputy Secretary of the Party Committee of CPIC Group, and in March 2020, he served as the General Manager of CPIC.
During his four years as President of CPIC Group, Fu Fan gradually achieved comprehensive management of the main insurance business, asset management, regional strategy, and ESG strategy.
And Zhao Yonggang, who succeeded Fu Fan this time, was formerly the deputy secretary of the Party Committee of Haitong Securities Co., Ltd., and was a "post-70s".
Photo / Haitong Securities official website
Zhao Yonggang is also a veteran of the CPIC, having served in the CPIC for 26 years. He has successively held various positions in CPIC Group, CPIC Life Insurance Corporation and its branches, and has rich working experience in the life insurance business of the group's middle and back office and major sectors on the liability side.
The general view in the industry is that the high-level change of CPIC has achieved a smooth handover. The joint efforts of Fu Fan and Zhao Yonggang, two cadres who are familiar with the insurance industry and the operation and culture of CPIC, will contribute to the stability and sustainability of CPIC's strategy.
The board of directors also deliberated and approved the "Proposal on Nominating Candidates for the 10th Board of Directors of China Pacific Insurance (Group) Co., Ltd.", and added Mr. Li Zhenghao, a non-executive director candidate (on behalf of the shareholder Shenergy Group), and Mr. Jin Hongyi, an independent non-executive director candidate.
Among them, Jin Hongyi's nomination of independent directors was disclosed in October this year, and Chen Jizhong, an independent non-executive director of CPIC and chairman of the risk management and related party transaction control committee of the board of directors, submitted his resignation for personal reasons. The board of directors deliberated and approved the proposal to nominate Jin Hongyi as a candidate for independent director of the company.
Soochow Securities Research Report believes that the new board of directors continues the characteristics of specialization and diversification, with a diversified board structure, covering the post-50s to post-80s, with a balanced proportion of men and women, and each director represents multiple shareholders, both from the overseas experience of foreign shareholders and the local perspective of well-known domestic scholars and professors.
2. Dismissal of the chief risk officer, and the "former" becomes the interim person in charge
In addition to the directors and the first and second leaders, the position of chief risk officer of CPIC also changed in October this year.
According to the announcement of the resolution of the 28th meeting of the 9th session of the board of directors of CPIC, the board of directors deliberated and passed the relevant proposals, agreed to dismiss Mr. Sun Peijian from the position of chief risk officer (assistant to the general manager) of the company, and designated Mr. Zhang Weidong as the interim person in charge of the chief risk officer of the company.
"Generally speaking, the chief risk officer is the senior executive in the organization who is responsible for overall risk management and is directly accountable to the board of directors. Large insurance institutions have a clear division of labor, and the chief risk officer needs to develop a risk management policy to ensure that the company's business activities comply with relevant laws and regulatory requirements. A senior practitioner in the insurance industry revealed to "Interface News Bullet Finance".
Regarding the reason for the personnel change, the relevant person in charge of CPIC said in an interview with Sino-Singapore Jingwei: "Sun Peijian has reached the statutory retirement age, and according to the corporate governance procedures, the board of directors will review and go through the retirement procedures. Before appointing a new Chief Risk Officer, appoint an interim person in charge to ensure an orderly transition of related work. This is a normal retirement arrangement for senior executives. ”
According to the announcement of the China Pacific Insurance, Sun Peijian was born in 1963 and is now 60 years old, and he has indeed reached retirement age. Zhang Weidong, born in 1970, is currently the Chief Compliance Officer and General Counsel, and also serves as a director of CPIC Property & Casualty, CPIC Life, CPIC Assets, Pacific Health and Changjiang Pension.
To the surprise of the industry, Zhang Weidong, who took over as interim head, had previously served as the company's chief risk officer. In March 2021, Zhang Weidong stepped down as the company's chief risk officer and was replaced by Sun Peijian, who was seven years older than Zhang Weidong.
Sun Peijian has only been the chief risk officer for two and a half years, but he was fired because of his age.
According to CPIC's announcement and responses to the media, Zhang Weidong is the interim head of the chief risk officer, and the agency will also hire a new chief risk officer.
Photo / CPIC's announcement on amending the articles of association
In addition, it is worth noting that at the 29th meeting of the 9th board of directors on the 11th, CPIC passed the meeting to deliberate and pass the "Proposal on Amendment". According to the latest amendment to the company's articles of association, several positions in the company may face adjustments.
According to Article 11 of the company's articles of association, among the senior management personnel mentioned in the original articles of association, the three positions of "chief risk officer, chief technology officer, and chief investment officer" have been deleted.
Article 221 shows that the company designates senior management personnel to serve as chief risk officers. The phrase "the person in charge of compliance, and the person in charge of compliance is responsible to the board of directors" in the original articles of association was deleted.
3. There are three main reasons for the decline in net profit
CPIC is an insurance group company established on May 13, 1991 on the basis of China Pacific Insurance Company, and is also the first insurance company listed in A+H+G (Shanghai, Hong Kong and London). As of the end of September 2023, CPIC's total assets were approximately 2.26 trillion yuan.
The annual report data of the past three years since the epidemic shows that CPIC's revenue has continued to grow, and its net profit has been under pressure.
From 2020 to 2022, CPIC's operating income was 422.18 billion yuan, 440.64 billion yuan, and 455.37 billion yuan, respectively, a year-on-year increase of 9.5%, 4.4%, and 3.3%. The net profit attributable to the parent company was 24.58 billion yuan, 26.83 billion yuan and 24.61 billion yuan respectively, a year-on-year increase of -11.4%, 9.2% and -8.3%.
Combined with the recently released three quarterly reports, the decline in CPIC's net profit has still not improved.
According to the financial report data, in the first three quarters of 2023, CPIC achieved operating income of 255.93 billion yuan, a year-on-year increase of 1.0%, and net profit attributable to the parent company of 23.15 billion yuan, a year-on-year decrease of 24.4%.
Photo / CPIC Q3 2023 report
In response to the reasons for the decline in net profit, the communication content of the extraordinary general meeting of shareholders disclosed by China Pacific Insurance on the 11th shows that it is mainly affected by changes in the capital market, the switch of new standards and disasters.
According to the financial report data, the investment income of CPIC in the first three quarters was 6.04 billion yuan, a year-on-year decrease of 89.8%. The company's net investment return on investment assets was 3.0%, down 0.2 percentage points year-on-year, and total investment return was 2.4%, down 0.8 percentage points year-on-year.
"In 2023, the new standards will be implemented, and the volatility of the capital market will be fully reflected in the company's net profit, and the company's investment return rate will be lower than the same period last year due to the continuous downward impact of the capital market. CPIC said, "In the third quarter of 2023, affected by typhoons and other disasters, the company's compensation expenses increased. At the same time, in 2022, due to the low occurrence of natural disasters and other reasons, compensation and other related expenses were lower than the normal annual level. ”
Compared with the investment side, CPIC's liabilities performed better in terms of premiums. In the first three quarters, CPIC achieved insurance service revenue of 204.78 billion yuan, a year-on-year increase of 7.4%.
In terms of life insurance, the value of new business grew rapidly, and the group insurance channel came under pressure.
CPIC Life achieved insurance service revenue of RMB63.91 billion, down 5.2% year-on-year, and new business value of RMB10.33 billion, up 36.8% year-on-year. In terms of channels, in the first three quarters, the life insurance agency channel achieved a new insurance period premium of 23.57 billion yuan, a year-on-year increase of 37.9%;
In terms of bancassurance, the scale premium of the bancassurance channel was 32.69 billion yuan, a year-on-year increase of 31.1%, while the performance of the group insurance channel was relatively poor, with a scale premium of 16.64 billion yuan in the first three quarters, a year-on-year decrease of 10.5%.
In terms of property and casualty insurance, the motor insurance business and non-motor insurance business grew steadily, especially the non-motor insurance contributed to the high growth rate.
According to the financial report data, CPIC property and casualty insurance achieved original insurance premium income of 148.46 billion yuan, a year-on-year increase of 11.8%. Among them, the premium income of motor insurance was 75.67 billion yuan, a year-on-year increase of 5.5%, and the premium income of non-motor insurance was 72.79 billion yuan, a year-on-year increase of 19.3%. The insurance service income was 139.53 billion yuan, a year-on-year increase of 13.9%. The underwriting combined ratio was 98.7%, up 1.0 percentage points year-on-year.
Looking forward to the annual net profit, CPIC said, "The company's operating profit remained stable overall, but under the new standard, the company's net profit was affected by the fluctuation of the capital market, and there was still great uncertainty in the annual net profit." ”
On the whole, factors such as the switch between old and new products and the policy of "integration of newspapers and banks" affect the entire insurance industry, and the situation faced by major insurance companies is more complicated.
As far as CPIC is concerned, the strategic framework of health, pension and technology has gradually become clearer, property and casualty insurance has maintained a steady upward trend, and CPIC Life has continued to transform.
Since the beginning of 2021, CPIC Life has launched the "Long Voyage Action" to start a comprehensive and deepening transformation. In July this year, the "first phase of the project" focusing on the transformation of the field service was completed, and the "second phase of the long voyage" has been officially launched, focusing on the organizational reform of the internal transformation.
After the smooth handover of high-level changes, where will the new leadership team lead CPIC to go?
American Editor | Qianqian
Audit | Ode