Can the major change in the management of Huaan Insurance bring a new atmosphere?

Text: "Investor's Network" Cui Yuechen

Recently, the senior executives of Huaan Property Insurance Co., Ltd. (hereinafter referred to as "Huaan Insurance") collectively changed positions. Following the resignation of the former general manager Tong Qing in March this year, a number of senior management positions have been adjusted, and Li Yunhuan, the regional general manager, has been officially appointed as the general manager after serving as the interim head of Huaan Insurance for nearly 6 months.

According to the information on the official website, Huaan Insurance was established in October 1996 and is a professional property insurance company, headquartered in Shenzhen, mainly engaged in various types of property insurance, liability insurance, credit guarantee insurance and other businesses, with more than 1,000 institutions.

This year's management ushered in a blockbuster personnel adjustment, does it mean that Huaan Insurance is about to undergo a strategic transformation? Li Yunhuan, the regional general manager, was transferred to the head office to take the helm, what new changes will be brought to Huaan Insurance?

In the first half of the year, senior executives collectively changed formations

According to Huaan Insurance, Li Yunhuan was born in August 1974 and is a native of Hunan.

Since 2008, Li Yunhuan has been working for Huaan Insurance, successively serving as the general manager of Chenzhou Central Branch, the assistant general manager of Hunan Branch, the general manager of Shanxi Branch, the general manager of Hunan Branch, and the interim head of Huaan Insurance.

Prior to joining Huaan Insurance, Li Yunhuan held management positions in PICC P&C and Pacific P&C Insurance, and has extensive experience in the insurance industry.

In March this year, Huaan Insurance announced that Tong Qing resigned as the company's general manager for personal reasons. In order to ensure the stability of the company's operation, the board of directors appointed Li Yunhuan as the temporary person in charge of the head office for a period of no more than six months.

It is reported that Tong Qing was hired as the general manager of Huaan Insurance in September 2010 and has served in this position for 14 years. In addition to serving as the President of Huaan Insurance, Tong Qing also serves as the Chairman of Huaan Property Insurance Asset Management Co., Ltd. (hereinafter referred to as "Huaan Asset"), a subsidiary of Huaan Insurance, and is in charge of the daily operation and management of the Company.

After Tong Qing's resignation, Huaan Insurance also issued a recruitment notice, planning to recruit 1 president and 1 vice president. This recruitment is an open recruitment, and the company's internal employees can self-recommend, and at the same time accept direct delivery from external social personnel.

Soon after, Li Yunhuan, the regional general manager, served as the interim head of the head office. Recently, the Shenzhen Regulatory Bureau approved Li Yunhuan's qualifications as general manager, which also means that Huaan Insurance completed the handover of the general manager position through internal promotion.

At the same time as Li Yunhuan's change of position, several senior management positions of Huaan Insurance also changed.

In the first half of this year, Zhang Xueqing, chief financial officer and chief investment officer of Huaan Insurance, was adjusted to vice president of the company; Xu Jun, former vice president and vice chairman, was removed from his senior management position and no longer served as vice president of the company; Yu Fengren, the former vice president, was dismissed; The former vice presidents Liao Xiaowei and Fan Dantao were both adjusted to assistant presidents; Liu Peigui, the former vice president, retired.

So far, the number of senior management team of Huaan Insurance has been reduced, and the number of vice presidents has been reduced from the original 5 to 1. At the same time, a number of local branch cadres were transferred to the head office.

It is worth mentioning that compared with the dust of the general manager, the post of chairman of Huaan Insurance is still vacant for a long time.

In January 2019, after Li Guangrong stepped down as chairman at the extraordinary general meeting of shareholders and became vice chairman, the position of chairman of Huaan Insurance has been vacant for five years.

The investment in Country Garden failed

In the first half of this year, the "big shift" in management may be closely related to the performance of Huaan Insurance.

Looking back at the development history of Huaan Insurance, in the past 27 years, Huaan Insurance's operating performance has been stable and its profitability has been strong, but its net profit will turn from a win to a loss in 2023, and the loss amount will exceed 1 billion yuan.

The turning point occurred in 2023, when Huaan Insurance achieved an annual insurance business income of 17.474 billion yuan, a year-on-year increase of 4.84%, while net profit fell sharply, with a loss of 1.166 billion yuan, a year-on-year decrease of 764.99%.

In this regard, Huaan Insurance once told the media that the loss was mainly affected by factors such as the large volatility of the secondary market and the continuous deterioration of the risk of superimposed real estate bonds.

Among them, the key factor is the "thunder" of investing in real estate, especially the investment mistakes in Country Garden's real estate bonds, which have become the main reason for the decline in net profit.

According to the solvency report for the fourth quarter of 2023, from 2020 to 2021, Huaan Asset, a subsidiary of Huaan Insurance, purchased the "H20 Bidi 3", "H20 Bidi 4", "H1 Bidi 01", "H1 Bidi 02" and "H1 Bidi 03" bonds issued by Country Garden several times, with a total investment amount of 428 million yuan.

Affected by the weaker-than-expected recovery of the real estate industry in 2023, Country Garden's sales fell sharply, and it fell into a serious liquidity crisis, unable to pay subsequent maturing bonds as agreed. As of the end of 2023, Huaan Insurance has made an impairment provision of 203 million yuan for the Bidi bonds it holds, with a residual book value of 225 million yuan.

At the same time, due to factors such as insufficient research and judgment on local risk change expectations and untimely adjustment of business policies, the expenditure of insurance claims has also increased significantly compared with the same period. As of the end of the fourth quarter of 2023, Huaan Insurance's core and comprehensive solvency were 75% and 115%, respectively, hovering above and below the regulatory red line.

However, judging from the performance in the first half of this year, Huaan Insurance has improved its operating performance by taking a series of countermeasures. As of the end of June this year, the company achieved insurance business income of 7.872 billion yuan and net profit of 82.59 million yuan. During the same period, the core and comprehensive solvency adequacy ratios increased to 91.51% and 135.6%, respectively.

Compliance issues are a concern

In addition to the decline in performance, Huaan Insurance's compliance issues also need to be solved urgently.

According to the disclosed administrative penalty information, in September this year, Huaan Insurance Zibo Central Branch was fined 110,000 yuan by the Shandong Supervision Bureau of the State Financial Supervision and Administration for inconsistent reimbursement with actual economic matters.

In June, Huaan Insurance Nujiang Central Branch was fined 100,000 yuan by the Nujiang Supervision Bureau for failing to use the recorded insurance clauses in accordance with the regulations.

In May, the Tonghua Central Branch of Huaan Insurance Jilin Branch was fined 170,000 yuan for falsely listing business and management expenses and using insurance agents to fabricate insurance intermediary business. Wang Xiaoyu, then general manager of the Tonghua Central Branch, was warned and fined 20,000 yuan for being responsible for the above matters.

In April, Huaan Insurance Jinan Central Branch was fined 300,000 yuan by the Shandong Supervision Bureau for compiling false financial and business information. Jia Yanying, then general manager of Jinan Central Branch, was responsible for preparing false financial information and was warned and fined 40,000 yuan.

According to incomplete statistics, in the first half of this year, many branches or branches of Huaan Insurance received fines due to compliance issues, with a total penalty of more than 2.7 million yuan.

At the same time, all 11 shareholders of the company have some or all of their shares pledged or frozen, including Tehua Investment Holdings Co., Ltd., which is the largest shareholder, which holds 20% of the shares, HNA Capital Group Co., Ltd., which holds 12.5%, and other "HNA-related" companies.

In 2018, Li Guangrong, then chairman of Huaan Insurance, was arrested on suspicion of bribery, and the following year he stepped down as chairman and became vice chairman, and the position of chairman of the company is still vacant.

With the appointment of the new General Manager Li Yunhuan and the change of management, will Huaan Insurance be able to turn losses into profits, improve compliance issues, and ultimately promote the company's transformation? It's worth looking forward to. (Produced by Thinking Finance)■