65% of Dingcheng Life Insurance is looking for a buyer, and it is still in a loss-making state after five years of resumption of business

Interface News Reporter | Lu Wenqi

On April 15, Jiemian News noticed that the website of the Beijing Equity Exchange disclosed a 65% equity transfer project of a life insurance company, and the main investors were four anonymous companies.

Although the key information of the transferred insurance company and the transferor has been withheld, it can be inferred from the words on the official website of the exchange that the insurance company is Dingcheng Life Insurance. The relevant person of Dingcheng Life Insurance replied to the interface news that there is no news for the release of issues related to equity transfer for the time being.

Dingcheng Life Insurance has undergone several changes since its birth, and its premiums have increased year after year since the resumption of business, but it is still struggling with losses. Previously, Dingcheng Life Insurance has repeatedly reported capital increases and equity changes, but there has been no follow-up progress.

Industry insiders revealed to Jiemian News that some well-known real estate companies had been interested in Dingcheng Life Insurance before, but they could not continue due to changes in the real estate industry and stricter supervision. "Dingcheng Life's own business is still in the early stage of development, and Wan Feng has supported it for a period of time when he was in office, and the long-term health insurance business has grown rapidly, but it should not continue later. ”

A number of clues point to Dingcheng Life

According to the equity transfer information, the target enterprise adheres to the concept of "customer-centric", creates an open, professional, efficient and intimate ecological service platform, and provides differentiated and customized brand insurance products and diversified value-added services covering the whole life cycle with medical care and health as the core through a combat effectiveness and sustainable sales team...... This is in line with the situation described on the official website of Dingcheng Life.

At the same time, the target enterprise has diversified sales channels. Large-scale premium income has grown positively for three consecutive years, and the comprehensive risk rating results have been stable at Class B, maintaining the middle level of the industry.

According to the solvency report of Dingcheng Life, from 2021 to 2023, Dingcheng Life achieved insurance business income of 1.573 billion yuan, 2.132 billion yuan and 2.867 billion yuan respectively. The company's overall risk rating for the second quarter of 2023 is BB. The company's comprehensive risk rating for the third quarter of 2023 is B.

Jiemian News asked Dingcheng Life Insurance for confirmation, and relevant people said that there is no news to release for the time being on issues related to equity transfer. At present, the company is making every effort to promote the capital increase, and if the follow-up company has equity changes and capital increases, the company will disclose information in strict accordance with the regulatory requirements and time limits.

For the transferor, the industry speculates that the transfer of equity should be Shenzhen Bailin Asset Management Co., Ltd. (renamed as "Shunzheng New Investment"), Shenzhen Qianhai Xiangjiang Financial Holding Group Co., Ltd., Shenzhen Guozhan Investment Development Co., Ltd. and Shenzhen Le'anju Commercial Co., Ltd., which together hold 65% of the equity of Dingcheng Life Insurance, which is consistent with the project information.

The company's predecessor was Shin Kong HNA Life Insurance, which was established in March 2009 and was jointly funded by HNA Group and Shin Kong Life Insurance, with a registered capital of 500 million yuan. After its establishment, the growth of Shin Kong HNA Life's premiums was sluggish, and the establishment of branches also stagnated.

Due to the failure to meet the solvency standard, the former China Insurance Regulatory Commission took administrative supervision measures against it, ordering it to suspend the establishment of new branches, stop carrying out new business and increase capital as soon as possible from November 2015. In October 2018, HNA Group was approved to withdraw from the list of shareholders of Shin Kong HNA Life Insurance, and five new real estate shareholders including Heung Kong Holdings joined, and the registered capital increased from 500 million yuan to 1.25 billion yuan, improving solvency.

In June 2019, Shin Kong HNA Life changed its name to Dingcheng Life Insurance and resumed business.

According to the data, from 2019 to 2022, Dingcheng Life's insurance business income was 88 million yuan, 185 million yuan, 1.573 billion yuan, and 2.132 billion yuan respectively. In 2023, Dingcheng Life Insurance will achieve insurance business income of 2.867 billion yuan, a year-on-year increase of 34.47%.

However, the rapid growth of premiums did not bring profits to Dingcheng Life. From 2019 to 2022, Dingcheng Life Insurance achieved net profits of -110 million yuan, -162 million yuan, -265 million yuan, and -255 million yuan respectively. In 2023, Dingcheng Life will have a net loss of 166 million yuan, which is narrower than that of the previous year.

There are frequent changes in equity

Dingcheng Life Insurance has not only faced pressure on profits in recent years, and there have been frequent changes in the shareholder lineup, but there has been no substantial progress.

In July 2021 alone, Dingcheng Life Insurance reported two equity changes. On July 7, Dingcheng Life Insurance announced that Shin Kong Life transferred all its 25% equity of Dingcheng Life Insurance to Hongdou Group, and after the completion of this equity transfer, Shin Kong Life no longer holds the equity of Dingcheng Life, and Hongdou Group holds 25% of the shares, and has become the largest shareholder.

At the same time, Dingcheng Life Insurance also intends to adjust the capital increase plan. According to the announcement issued by Dingcheng Life Insurance on the same day, the company's board of directors and shareholders' meeting agreed to expand and increase the registered capital by 2.5 billion yuan, and the registered capital of Dingcheng Life Insurance will increase to 3.75 billion yuan after the completion of the capital increase. Only Bailin Assets participated in this capital increase, and the rest of the investors were new shareholders such as Hongdou Group.

On July 29, 2021, Dingcheng Life Insurance announced that Xiangjiang Financial Holding intends to transfer all 20% of the company's equity to Yonggang Group, and after the completion of this equity transfer, Xiangjiang Financial Holding will no longer hold the equity of Dingcheng Life, and Yonggang Group will hold 20% of the shares. However, the shareholder equity transfer and change of registered capital have not been approved, and the capital increaser signed the termination agreement of the "Agreement on the Capital Increase of Dingcheng Life Insurance Co., Ltd." on November 3, 2022, and Dingcheng Life Insurance Co., Ltd. returned the capital increase of 2.5 billion yuan in the same month.

Today, the shareholders of Dingcheng Life Insurance are still Shin Kong Life Insurance, Bailin Assets, Heung Kong Finance, Guozhan Investment, Le'anju and Guanpu Real Estate, with a registered capital of 1.25 billion yuan.

The story of Dingcheng Life Insurance reflects the operating difficulties of small and medium-sized insurance companies, and many insurance companies have been cold in equity sales.

Huang Dazhi, a researcher at Xingtu Financial Research Institute, told Jiemian News that the cold equity of insurance companies is inseparable from the value of the insurance company itself and the judgment of future business development expectations. At present, insurance companies are facing difficulties on the asset side and the liability side. On the investment side, the decline in interest rates and the performance of equity and debt of real estate companies dragged down the yield of insurance funds, while on the liability side, the value of new business of various companies declined. This has led to the market not being optimistic about insurance equity.

According to the Risk Assessment Report of China's Insurance Industry, the willingness of social capital to enter the insurance industry has decreased, and the supply of external capital has decreased, mainly due to the following reasons: first, most small and medium-sized insurance companies are difficult to provide long-term and stable capital returns, resulting in the lack of willingness of existing shareholders to increase capital, and the lack of attraction to potential investors; Third, the overall economic environment is under pressure, and the existing shareholders of some insurance companies are facing greater pressure on their operations, and their ability and willingness to increase capital have declined.