Affected by the expansion of losses in the fourth quarter, Hetai Life lost a total of 120 million yuan in 2019. At the same time, the comprehensive solvency adequacy ratio and core solvency adequacy ratio at the end of the year dropped by 124.05 percentage points from the end of

Affected by the expansion of losses in the fourth quarter, Hotai Life lost a total of 120 million yuan in 2019. At the same time, the comprehensive solvency adequacy ratio and core solvency adequacy ratio at the end of the year dropped by 124.05 percentage points from the end of the third quarter

《Investment Times researcher Ling Yue

As the solvency reports of insurance companies for the fourth quarter of 2019 have been released, their annual performance has finally surfaced, once again ushering in the scene of "some happy and some sad".

Among them, Hetai Life Insurance Co., Ltd. (hereinafter referred to as Hetai Life) handed over an annual report card of losses. Data show that although the company achieved small profits in the second and third quarters of last year, its net profits in the first and fourth quarters were losses, especially the fourth quarter loss of 126 million yuan, which was a serious drag on the full-year performance.

At the same time, the company's solvency indicators also declined sharply. At the end of the fourth quarter of last year, the comprehensive solvency adequacy ratio and core solvency adequacy ratio both dropped by 124.05 percentage points.

In response to the above situation, Hotai Life responded to the Investment Times by saying that from the perspective of the entire insurance market, newly established life insurance companies are generally in a state of loss, which is in line with the basic conditions for life insurance companies to be in a loss period for the first 6 to 9 years of operation. law. The company opened on January 24, 2017. Among life insurance companies established during the same period, the overall financial losses have been at a relatively low level.

The fourth quarter dragged down the annual performance

In 2019, Hotai Life turned losses into profits in the second and third quarters, but failed to keep the "fruits of victory" in the fourth quarter.

Judging from the quarterly solvency reports of that year, the company lost 5.0303 million yuan in the first quarter, but made profits of 1.5815 million yuan and 8.8256 million yuan in the second and third quarters respectively. However, due to the large loss in the fourth quarter, up to 126 million yuan, the company failed to successfully start a "turnaround" throughout the year. The cumulative net profit for the year was .

Regarding the losses in the fourth quarter of 2019, Hotai Life said it was mainly due to two reasons: First, the scale of premiums achieved in the fourth quarter was 620 million yuan, which doubled compared with the first three quarters, and the corresponding handling fees also doubled. Second, a considerable number of expense items including IT R&D expenses, audit expenses, etc. were concentrated in the fourth quarter, resulting in a significant increase in administrative expenses in that quarter.

Information shows that Hetai Life Insurance was established on January 24, 2017, by CITIC Guoan Co., Ltd., Beijing Juranzhijia Investment Holding Group Co., Ltd., Shenzhen Golden Century Engineering Industrial Co., Ltd., Beijing Yingke Bicheng Technology Co., Ltd. (a wholly-owned subsidiary of Tencent), Luanchuan County Jinxing Mining Co., Ltd., Qinhuangdao Yuming Real Estate Group Co., Ltd., Shenzhen Hefengtai Technology Co., Ltd., and Shenzhen Mingxiang Holding Group Co., Ltd. initiated the establishment , with a registered capital of RMB 1.5 billion.

"Investment Times" researchers combed through the annual report data of Hotai Life Insurance and found that the company had net losses of 134 million yuan and 78 million yuan in 2017 and 2018 respectively.

Judging from the insurance business income, the company has shown an obvious upward trend. In 2017 and 2018, the company's insurance business income was 153 million yuan and 660 million yuan respectively, an increase of 331.37%. In addition, in the four quarters of 2019, it achieved insurance business income of 393 million yuan, 102 million yuan, 181 million yuan, and 384 million yuan respectively, totaling 1.06 billion yuan.

However, the increase in the refund amount is also obvious. Annual report data shows that Hetai Life Insurance’s surrender payment was 594,800 yuan in 2017 and 7.198 million yuan in 2018, a year-on-year increase of 1110.15%. In addition, the company's compensation expenses in 2017 were 371,000 yuan, and in 2018 this figure was 4.2538 million yuan, an increase of 1046.58%; in 2017, the handling fees and commission expenses were 4.3302 million yuan, and in 2018 this figure was 23.2296 million yuan. The increase reached 436.46%.

The solvency index dropped significantly

"Investment Times" researchers noticed that although Hetai Life's solvency index met regulatory standards, it showed a downward trend last year.

’s 2019 quarterly solvency report shows that the company’s core solvency adequacy ratio and comprehensive solvency adequacy ratio in the four quarters were 461.74%, 414.68%, 404.37%, and 280.32% respectively.In particular, relevant indicators dropped significantly in the fourth quarter, down 124.05 percentage points from the previous quarter.

In this regard, Hetai Life told the Investment Times: "The solvency adequacy ratio is an important indicator for insurance industry supervision. The company's insurance business revenue doubled in 2019, resulting in a doubling of the minimum capital requirements. On the other hand, Normal losses in the early stages of operation lead to a corresponding reduction in actual capital. These two factors cause the solvency adequacy ratio to decline rapidly, which is a normal phenomenon in the company's operating process. "

In addition, it should be noted that Hetai Life Insurance 2019. The fourth quarter solvency report shows that the company currently has a total of 600 million shares pledged, accounting for 40% of the total equity of Hetai Life Insurance.

Specifically, CITIC Guoan Co., Ltd. pledged and froze all 20% of its shares in Hotai Life; Luanchuan County Jinxing Mining Co., Ltd. pledged all 14% of its shares in Hotai Life; Qinhuangdao Yu Ming Real Estate Group Co., Ltd. and Shenzhen Hefengtai Technology Co., Ltd. respectively pledged and pledged and froze 45 million shares of Hetai Life Insurance, accounting for 6% of its total equity.

The "Notice on Carrying out Special Rectification of Equity and Related Transactions of Banking and Insurance Institutions" issued by the China Banking and Insurance Regulatory Commission last year shows that "whether insurance companies have excessive equity pledges and freezing ratios" is one of the key issues to be investigated. It can be seen that the equity pledge risks of insurance companies have attracted the attention of regulators.