Soochow Life Insurance is experiencing changes. Following the resignation of the president and the change of shareholders, this national life insurance company established in a prefecture-level city in Jiangsu has once again attracted the attention of the industry. Soochow Life, established in 2012, is now in its seventh year and was once a major universal insurance company. When it was founded, it claimed to be "profitable in five years and listed in eight years." However, it is now facing the pressure of continuous losses and shrinking assets.
Shareholders frequently change in and out
A few days ago, Soochow Life Insurance announced that its shareholder Suzhou Chuangyuan Investment Development (Group) Co., Ltd. (hereinafter referred to as "Suzhou Chuangyuan Investment") plans to transfer 4.975% of Soochow Life Insurance's equity. The transferee is Suzhou Culture and Tourism Development Group Co., Ltd. (hereinafter referred to as "Suzhou Culture"). It is expected that after the completion of this equity stake, Suzhou Chuangyuan Investment's shareholding will be reduced from the original 10.725% to 5.75%.
However, the reporter checked the information and found that the equity held by Suzhou Chuangyuan Investment has been wavering. As early as December 2016, Soochow Securities announced that it planned to buy 7.725% of Soochow Life Insurance from Suzhou Chuangyuan Investment. , but it did not come to fruition. In August 2017, Soochow Securities once again expressed its intention to buy 4.975% of the equity from Suzhou Chuangyuan Investment, but the announcement stated that it had not yet obtained approval or filing from relevant government departments or regulatory agencies.
Public information shows that the largest shareholders of Soochow Life Insurance and Soochow Securities are both Suzhou International Development Group Co., Ltd. (hereinafter referred to as "Suzhou Guofa"), while Suzhou Guofa, Suzhou Chuangyuan Investment and Suzhou Culture are all A wholly-owned subsidiary of Suzhou State-owned Assets Supervision and Administration Commission (hereinafter referred to as "Suzhou State-owned Assets Supervision and Administration Commission"). It can be seen that the equity change of Soochow Life Insurance can be regarded as an internal equity adjustment of Suzhou State-owned Assets Supervision and Administration Commission.
It is reported that Soochow Life was established in May 2012 and is headquartered in Suzhou, Jiangsu Province. It is the first national life insurance company established in a prefecture-level city in China approved by the former China Insurance Regulatory Commission. In 2016, Soochow Life Insurance was jointly funded by multiple shareholders to increase capital and shareholdings, and the registered capital increased from 2 billion yuan to 4 billion yuan.
So far, in addition to this capital increase and share expansion, Soochow Life Insurance has had several small shareholding changes in recent years. For example, in 2015, one of the original shareholders, Suzhou Tongjin Electric Co., Ltd., twice transferred a total of 0.47% of its equity in Soochow Life Insurance to Suzhou Acer Tools Co., Ltd.; in January 2016, the original shareholder Suzhou Soochow Municipal Government Engineering Co., Ltd. transferred 2% of its equity to Suzhou Xieda Property Management Co., Ltd.; in the third quarter of 2016 and the third quarter of 2017, private shareholder Suzhou Zhenghe Investment Co., Ltd. twice increased its holdings of 20 million shares in Soochow Life Insurance. Shareholders Shengyou Group Co., Ltd. and Suzhou Times Textile Co., Ltd. withdrew.
After the equity transfer is completed, the shareholders of Soochow Life Insurance will be composed of 21 companies, with state-owned capital holding 72.475% and private capital 27.525%.
The president has resigned without fulfilling his ambition
In addition to the equity changes, Xu Jianping, the former president of Soochow Life Insurance, has also recently resigned, and the new president is still vacant. However, this is not the first high-level change of Soochow Life Insurance since its establishment. Up to now, this small and medium-sized insurance company has experienced three changes of chairman and two general managers.
It is reported that after the establishment of Soochow Life Insurance, Zhu Kai and Qian Cheng served as the first chairman and president respectively. Less than three months later, on October 28, 2012, the chairman and president were changed to Huang Jianlin and Xu Jianping respectively. Five years later, on December 21, 2017, Shen Xiaoming was approved to succeed Huang Jianlin as the new chairman. On October 26 this year, Soochow Life Insurance announced that after receiving relevant documents from the Suzhou Municipal Party Committee, former president Xu Jianping would no longer serve as the company's president due to job transfer. Until a new president is elected, his powers will be exercised by chairman Shen Xiaoming. In September this year, Soochow Life also elected Xu Jianping as vice chairman of the company's third board of directors. There are reports in the market that Xu Jianping will serve as vice president of Suzhou Chuangyuan Group.
Regarding Xu Jianping’s transfer during the critical period when Soochow Life Insurance was experiencing a seven-year itch, market rumors may have something to do with the company’s operating conditions. When Soochow Life was first established, it had formulated a grand plan of "making profits in five years and listing in eight years." Compared with the actual situation of China's life insurance industry, which takes at least seven to eight years to make profits, Soochow Life seems a little anxious. At present, Soochow Life Insurance The reality is far from what was originally imagined.
According to Soochow Life’s annual report, from 2012 to 2017, the company achieved insurance business income of 42.844 million yuan, 290 million yuan, 390 million yuan, 440 million yuan, 3.82 billion yuan and 5.15 billion yuan respectively; the net profits in these six years were respectively -21.115 million yuan, -120 million yuan, -220 million yuan, 100 million yuan, -320 million yuan and -300 million yuan, with a total loss of 880 million yuan. Entering 2018, Soochow Life lost 17.8058 million yuan, 47.7586 million yuan, and 29.1256 million yuan respectively in the first three quarters. It can be seen that there is no hope of making profits in five years, and listing in the eighth year is likely to be in vain.
Xu Jianping, who has a background in investment, has always been optimistic about Soochow Life Insurance's road to listing. In the past two years, he has publicly stated many times that Soochow Life Insurance will gradually achieve "three leaps" and consider listing on the New OTC Market. The “three leaps” are from regional operations to national operations, from a professional life insurance company to an insurance and financial group, and from a product supplier to an insurance and financial solution provider.
The idea is an idea, but the reality of Soochow Life Insurance is cruel. The new chairman Shen Xiaoming is not optimistic about the current situation of Soochow Life Insurance. He said at the third quarter operating performance analysis meeting held at the end of October that Soochow Life Insurance is currently facing a period of digestion of conflicts, a period of transformation pain and a period of policy adaptation. Due to the superimposed impact of the "period", the conversion of old and new development momentum is encountering unprecedented difficulties, and enterprises are under great operating pressure and hidden risks.
Once prosperous with the help of universal insurance
Soochow Life has also experienced a period of prosperity and development, with premium income achieving rapid growth. However, as the insurance industry adjusts its structure and returns to the origin of protection, the company's development is facing greater transformation pressure. As Shen Xiaoming said, the company's operating pressure and risks are relatively high.
Soochow Life's strategic positioning was once a "social security service provider and wealth management provider". In the past few years, it focused on private wealth management, which helped Soochow Life become a major universal insurance company. This business development It once attracted the attention of regulatory agencies. In December 2016, Soochow Life was suspended from its Internet insurance business and banned from applying for products for three months due to insufficient rectification of its universal insurance business. According to
data, Soochow Life’s annual premium income did not exceed 500 million yuan from 2013 to 2015. From 2016 to 2017, it experienced three major leaps, a large part of which was income from universal insurance.
However, the substantial growth of universal insurance has also increased the total liabilities of Soochow Life. From 2014 to 2017, Soochow Life's total liabilities were 5.484 billion yuan, 7.15 billion yuan, 12.288 billion yuan, and 16.834 billion yuan respectively, accounting for 76.5%, 78.9%, 77%, and 84.6% of the total assets in that year respectively. The combination of short-term liabilities with long-term assets will also bring cash flow pressure.
Because of this, the net assets of Soochow Life Insurance continue to shrink. In August 2016, Soochow Life increased its capital to 4 billion yuan. Entering 2018, its net assets dropped from 3.1 billion yuan in the first quarter to 2.855 billion yuan in the third quarter.
In response to the current situation of performance losses, Soochow Life Insurance stated in a reply to a reporter from Beijing Business Daily that considering the current macro market environment and industry development trends, the profit time limit may be extended. At present, the company is deeply promoting innovation and transformation in accordance with the strategy of "connotation development and value growth" and will enter the profit cycle as quickly and steadily as possible and in line with the development laws of life insurance.
Transformation pressure has become a common problem in the industry
In fact, many domestic small and medium-sized life insurance companies have experienced equity changes and personnel changes. In recent years, a number of companies such as Huatai, Guolian, Great Wall, and Centennial have experienced equity transfers. According to reports, in the first eight months of this year, a total of 27 insurance company chairmen and 25 general managers changed. A large number of them were small and medium-sized life insurance companies. Frequent changes in personnel also reflect the company's governance issues.
It is understood that with the tightening of supervision and the return of insurance to its basic protection, life insurance companies are seeking to transform, and small and medium-sized life insurance companies among them are facing greater pressure.
Deputy Director of the Insurance Research Office of the Financial Research Institute of the Development Research Center of the State CouncilZhu Junsheng said that for small and medium-sized life insurance companies, the main thing they are currently facing is transformation pressure. On the one hand, as the regulatory orientation shifts to protection-oriented business, small and medium-sized companies have long-term business decline, coupled with the previous impact from short- and medium-term surviving businesses such as universal insurance, the company may experience cash flow pressure.On the other hand, the construction of individual insurance channels of these insurance companies is relatively weak, and most of them are in the initial stage of establishment. At the same time, the payment products are relatively complex, which has an impact on the premium income of small and medium-sized insurance companies. In addition, the Matthew Effect in the personal insurance industry is significant. The "old six" companies such as China Life, Ping An, China Pacific Insurance, and Xinhua account for almost 90% of the industry's profits, objectively squeezing small and medium-sized companies. In the future, small and medium-sized life insurance companies cannot simply copy the models of large companies. It is recommended to explore more differentiated operations, enhance professional operation levels, and create a "small but specialized, specialized and beautiful" business model.
Soochow Life stated that the company has always adhered to the principle of "insurance is surnamed insurance" and focuses on social security service innovation. It now has the business qualifications for critical illness insurance, tax-preferred health insurance, tax-deferred pension insurance, critical illness medical insurance, tax-preferred health insurance, enterprise Projects such as group annuities cover approximately 9.6 million people, and the individual insurance and group insurance businesses maintain their lead among industry entities established during the same period.
(Editor: Guo Weiying)
