Thousands of people walked, and one person took the lead. The ship carries thousands of pounds and is at the helm of one person.
The transformation of the insurance industry is difficult, and the transformation of small and medium-sized insurance companies is even more difficult. Since the beginning of this year, a number of small and medium-sized insurance companies have ushered in a new round of personnel adjustments, according to incomplete statistics of Baoguan, in the four months of this year, a total of 23 small and medium-sized insurance companies have carried out senior management changes.
For a company, the change of core management often means that the company's development direction and strategy will change, but at the same time, if the management change is too frequent, it will also affect the company's stability and strategic continuity to a certain extent. So what is the reason behind the successive announcements of personnel changes by small and medium-sized insurance companies? Let's take a closer look.
1
The management of 23 small and medium-sized insurance companies intensively "changed blood",
Normal turnover and performance pressure are the two main reasons
On the whole, the personnel adjustments of small and medium-sized insurance companies at the beginning of this year are more frequent than in previous years, and the scope and number of personnel adjustments are on the rise. Among the 23 insurance companies, 14 insurance companies have already changed their senior management, and there are still vacancies in the chairman, general manager and other positions of insurance companies such as Fude Life Insurance, CITIC Chengbao, Huaan Property Insurance, etc.
Source: Baoguan finishing
From the perspective of the type of insurance companies, life insurance companies account for the vast majority. Specifically, there are 16 life insurance companies, 8 property insurance companies, and 1 insurance group holding company.
According to the scope of our statistics, from the perspective of position adjustment, the personnel changes of 23 insurance companies involve 5 chairmen, 6 general managers, 2 presidents, 1 chief financial officer, and 9 interim directors.
Of course, for the insurance industry, personnel changes are not only a simple transfer of power, but also reflect some problems and trends in the development of the industry, so what is the main reason behind the frequent changes in the senior management of small and medium-sized insurance companies?
1. Normal replacement at the end of the term of office or retirement at the end of the term
The normal turnover here usually refers to the retirement or expiration of the term of office of the original management personnel of the insurance company, or the transfer or adjustment of work due to personal reasons. For example, the personnel changes of insurance companies such as CITIC Prudential, Hengqin Life Insurance, Huaan Property Insurance, and Dadi Insurance are all normal replacements.
Source: Hengqin Life Insurance official website
Taking Hengqin Life Insurance as an example, in the announcement on April 15, Hengqin Life Insurance said that due to personal reasons, Lan Yadong proposed to retire and apply for resignation from the company's chairman, executive director and all positions held in the company, and confirmed that there was no disagreement with the company's board of directors, and there was no need to remind the company's shareholders and creditors of the matter. Later, Qian Zhonghua was elected as an executive director and chairman of the board, and formally assumed his duties after the approval of his chairman's qualifications.
2. Executive changes brought about by performance pressure
According to the management replacement of small and medium-sized insurance companies in recent years, there is a strong relationship between the development of the company's business performance and the frequency of management replacement, which is also the main reason for the management replacement. Once the company's operating performance and solvency decline rapidly, it is often accompanied by intensive personnel adjustments, and some companies take the initiative to adjust their management in order to seek improvement in the company's performance.
11 of the 23 insurance companies in this survey are more or less facing considerable pressure on their performance. For example, since 2020, Zhonghong Insurance's net profit has gradually declined. The net profit in 2021 will be 1.049 billion, a year-on-year decrease of 3.9%, the net profit in 2022 will be 458 million, a year-on-year decrease of 56.33%, and the net profit in 2023 will be 402 million, a year-on-year decrease of 12.23%, which has declined for three consecutive years.
After the appointment of Wu Xiaoyong as General Manager, He Dade, Chairman of Zhonghong Insurance, said: "We are confident that Wu Xiaoyong will lead the high-performance team of Zhonghong Insurance and lead Zhonghong Insurance to a new stage of development. It can be seen from this sentence that under the continuous performance pressure, the entire Zhonghong Insurance urgently needs a more innovative and forward-looking leadership team to lead the company's urgent development.
In general, when the company is faced with external or internal contradictions, the accelerated adjustment of personnel has become one of the important means of "self-help".
2
Can Increasingly Frequent Personnel Changes Solve the Plight of Small and Medium-Sized Insurers?
As mentioned at the beginning of the article, in the past two years, the insurance industry has begun to enter the deep water area of transformation, and policies such as scheduled interest rate reductions and the integration of newspapers and banks have been introduced one after another. For large insurance companies, they can use the advantages of capital, brand, and resources to resist the impact of all aspects. However, for small and medium-sized insurers with limited business scale and relatively single size, life is even more difficult. Intensified solvency constraints, blocked capital replenishment channels, and unreasonable cost risk control have become the "true portrayal" of small and medium-sized insurance companies.
Of course, small and medium-sized insurers are also aware that their situation may become more difficult in the future, and how to survive has become the first problem to be solved. Changing the management can quickly bring new development horizons and open up new business development directions for the company, which has become the most direct and effective solution at present.
Junlong Life Insurance has frequently changed its commanders and strived to reverse the loss dilemma
As a joint venture insurance company, Junlong Life Insurance has fallen into an embarrassing situation of "increasing revenue but not increasing profits" in recent years. According to the data, in the past three years, the net profit of Junlong Life Insurance was 31 million yuan, -175 million yuan and -173 million yuan respectively. It should be noted that since the establishment of Junlong Life Insurance in 2008, it has only made a profit of 08 million yuan and 31 million yuan in 2020 and 2021 respectively, and all losses in the remaining 13 years, with a total loss of 792 million yuan. At the same time, Junlong Life's comprehensive solvency adequacy ratio in 2023 is only 166.97%, which is lower than the industry level, and the operating evaluation result is C.
In addition to unsatisfactory business performance, Junlong Life Insurance is also facing a surge in surrender rates in 2023. Specifically, the top three products in terms of surrender amount surrendered 489 million yuan, 100 million yuan, and 05 million yuan respectively, accounting for 23% of the insurance business income in 2023, accounting for a large proportion.
There are many reasons why Junlong Life Insurance is in such a passive predicament. On the one hand, due to the impact of investment returns, the investment return rate of Junlong Life Insurance in 2023 will only be -1.43%, which is the bottom of the industry, which affects the company's final profit results. On the other hand, in the process of business promotion, the company has many problems in product design, sales and post-service, resulting in a surge in surrender.
In order to get out of the predicament, we also found that in recent years, Junlong Life Insurance has been constantly making strategic adjustments to adapt to the changes in the entire industry, and the personnel changes of the core management are an important part of it.
Founded for 15 years, Junlong Life finally ushered in the fifth general manager Xu Hongtai in February this year, like the previous general managers, Xu Hongtai in addition to his rich personal experience, also has a foreign shareholder background, which is also in line with the tonality of Junlong Life as a joint venture insurance company. At the critical stage of Junlong Life's transformation, stable and experienced core management is crucial to the company's operation and risk control, and Xu Hongtai, as a veteran of the company, is undoubtedly the most suitable candidate for the first step. However, as far as the operation of Junlong Life Insurance is concerned, there is still a long way to go to get out of the predicament.
The new commander of Qianhai Property Insurance has landed, whether it can lead the company to stand out from the encirclement
In terms of property and casualty insurance companies, Qianhai P&C Insurance, which has been established for nearly 8 years, is also a bit unsatisfactory in terms of net profit. The company only achieved a meager profit of 23 million yuan in 2022, and has accumulated a loss of 575 million yuan from 2016 to 2021, and another loss of 89 million yuan in 2023.
In terms of solvency, as of the end of 2023, Qianhai P&C Insurance's comprehensive solvency adequacy ratio and core solvency adequacy ratio were both 111.48%, touching the edge of the red line, and the comprehensive risk rating did not meet regulatory standards for several quarters.
In addition to the pressure on performance, the pressure encountered by Qianhai P&C shareholders is also a typical problem encountered by many insurance companies in recent years. Previously, many shareholders of Qianhai Property Insurance were riddled with debts, resulting in more than half of the company's equity being frozen. Specifically, 20% of the shares of Jushenghua were frozen, 17.2% of the shares of Shenyue Holdings Co., Ltd. were frozen, and 20% of the shares of Jianye Engineering Group Co., Ltd. were frozen, totaling 58.7%.
These will not only greatly affect the company's decision-making and operation, but also reduce the confidence of external investors to a certain extent. At the same time, Qianhai Property Insurance wants to solve the company's solvency failure by increasing shareholders' capital, but it cannot go through.
In such a grim situation, in March this year, the position of general manager, which had been vacant for two and a half years, finally landed: Li Gongni's qualifications were approved by the Supervision Bureau. It is reported that Li Gongni has served as the general manager of the auto insurance department in many insurance companies, and has rich experience and resume. However, the top management of Qianhai P&C Insurance has experienced a period of continuous turmoil, and the first two chairmen, Yao Zhenhua and Huang Wei, have been investigated successively, the former has been disqualified and banned from the insurance industry for 10 years, and the latter has not been announced by the relevant departments.
Whether it is performance, equity, solvency, or instability at the top, Qianhai P&C Insurance has reached the point where it needs to be solved urgently, and it is still unknown whether Li Gongni's parachute can create a better business environment for the company and further enhance the company's competitiveness.
In general, for small and medium-sized insurance companies, every personnel change can have a profound impact on the company's future development. Good managers can optimize and adjust the company's business model and development strategy in a timely manner in combination with the industry, and improve the execution and cohesion of the company's team. However, if a small and medium-sized insurance company wants to "come back from the dead", it is not enough to replace the management alone, but also to have the company's overall internal ability. For example, shareholders should actively optimize capital allocation, offline teams should deeply cultivate the regional market, and actively build customer management capabilities. Of course, this personnel change also shows us the determination of small and medium-sized insurance companies to save themselves and transform, and we also hope that the new management can lead the company to successfully break through in the future and achieve more stable and faster development.