Yangtze Business Daily News □ Our reporter Zheng Wei
As Cathay Property Insurance's solvency continues to decline, Cathay Property Insurance recently issued a temporary announcement to disclose the capital increase of 1 billion yuan, and the company's registered capital rose to 2.633 billion yuan.
It is worth noting that Cathay Property Insurance solvency adequacy ratio has approached the regulatory red line. According to the requirements of the China Insurance Regulatory Commission, insurance companies should have capital that is compatible with their risks and business scale to ensure that the solvency adequacy ratio is not less than 100%. As of the end of the third quarter of 2018, Cathay Property Insurance's comprehensive solvency adequacy ratio was 167.95%, and capital increase was imminent. At the same time, a reporter from the Yangtze Business Daily found that Cathay Property Insurance has lost 940 million yuan in the past ten years.
On December 26, 2018, Cathay Property Insurance exclusively responded to the Yangtze Business Daily reporter that since obtaining the capital increase of Ant Financial in 2016, through the empowerment of Ant Financial technology technology, Cathay Property Insurance's transformation has achieved initial results after two years of development. This capital increase is also to allow Cathay Property Insurance to better focus on small-scale fragmented innovative products and allow the public to enjoy inclusive insurance. It is also to strengthen Cathay Property Insurance's capital strength and meet the company's subsequent healthy and sustainable development.
In this regard, a relevant person in charge of Ant Financial told the reporter of the Yangtze Business Daily that there will be no comment on Cathay Pacific news, and the announcement of Cathay Property Insurance shall prevail.
"Ant Financial should want to continue to inject its own Internet model and promote Cathay Pacific Property Insurance to take another step. liability insurance will be an important area for the insurance industry to focus on in the future. In the long run, Cathay Pacific Property Insurance may trigger a new growth point in the future premium income of the Chinese insurance market." An expert analyzed to the reporter of the Yangtze Business Daily.
Ant Financial invested 1.34 billion
Caotai Property Insurance announced that with the unanimous agreement of the shareholders of Cathay Property Insurance, it was decided that each shareholder would subscribe to the capital according to the company's existing equity structure and increase the registered capital by 1 billion yuan in a total of 1 billion yuan. After the completion of this capital increase, Zhejiang Ant Micro Financial Services Group Co., Ltd. (referred to as "Ant Financial"), Cathay Century Products Insurance Co., Ltd. (referred to as "Cathay Century") and Cathay Life Insurance Co., Ltd. (referred to as "Cathay Life") will not change the investment ratio of Cathay Property Insurance, which is 51%, 24.5% and 24.5% respectively, of which Ant Financial will increase its capital by 500 million yuan.
After the completion of this capital increase, Ant Financial's 51% stake remains unchanged, and it is still the largest shareholder of Cathay Property Insurance. The registered capital of Cathay Property Insurance increased from 1.633 billion yuan to 2.633 billion yuan.
From Ant Financial's first capital increase of Cathay Property Insurance by 830 million yuan in 2016, holding 51% of the shares and becoming its controlling shareholder. By the latest round of capital increase, Ant Financial has spent 1.34 billion yuan on Cathay Property Insurance.
Why does Ant Financial favor Cathay Property Insurance so much?
In fact, Alibaba behind Ant Financial has been involved in insurance business since 2009 and started early in BAT. From aviation insurance to return insurance, Taobao's insurance channel has been operating for many years, and property insurance products such as accident insurance and auto insurance and life insurance universal insurance products have already achieved considerable sales.
But these early businesses stay more at the "channel" level and earn a certain platform fee. Alibaba, which has mastered many scenarios and data, obviously will not stop there.
In September 2015, Ant Financial independently released the insurance business segment from the Wealth Business Group and officially established the insurance business department. Yin Ming, former vice president of China Life Property Insurance and vice president of China Life E-commerce Company, was also "poached" as vice president of Ant Financial and general manager of the insurance business department.
It is understood that as of 2015, its insurance business users exceeded 300 million, and there were 76 cooperative insurance institutions. In Ant's "Internet Propeller" plan, Cathay is one of the 78 insurance companies.
The connection between Cathay Property Insurance and shareholder Ant Financial is also gradually deepening. In October 2016, Cathay Property Insurance signed a contract with "Ant Financial" and its affiliates to sell insurance through the Alipay platform and Taobao platform. The transaction method is that Cathay Property Insurance provides Internet insurance products through an e-commerce platform, and shareholders "Ant Financial" and its affiliates purchase related insurance products from the company based on their own business needs and customer experience.
Loss of 29.81 million yuan in the first three quarters
Public information shows that Cathay Property Insurance was established in August 2008 and was initially established by Taiwan Cathay Life Insurance Co., Ltd. and Taiwan Cathay Century Products Insurance Co., Ltd. It has been in a loss state since its establishment, and it has generally shown a trend of expanding losses from 2009 to 2016.
According to statistics, from 2009 to 2016, Cathay Property Insurance's losses were RMB 16.953 million, RMB 47.226 million, RMB 48.733 million, RMB 140 million, RMB 190 million, RMB 71.383 million, RMB 150 million and RMB 160 million, respectively.
In July 2016, Cathay Property Insurance's application to change capital injection and controlling shareholder was officially approved. Ant Financial became the largest shareholder of Cathay Property Insurance to bring more speculations to the outside world. However, judging from the net profit situation, Cathay Property Insurance is still in a loss state. The net loss amount in 2017 was 91.939 million yuan. By 2018, the cumulative loss of 29.81 million yuan in the first three quarters.
Changjiang Business Daily reporters found that over the past 10 years, Cathay Property Insurance has accumulated losses of about 940 million yuan.
In fact, after Ant Financial's first capital increase, Cathay Property Insurance's income structure has undergone significant changes. Before 2016, the majority of Cathay Property Insurance's premium income was occupied by auto insurance for a long time. Until 2017, the liability insurance income increased from 95 million yuan in the previous year to 794 million yuan, an increase of 736%, surpassing auto insurance and becoming the largest source of income. At that time, Cathay Property Insurance stated that the increase in liability insurance revenue was mainly due to its efforts in account security insurance and other aspects.
It is worth noting that Cathay Property Insurance Internet Insurance product information shows that the company has registered 26 Internet products this year, including account security insurance for Mushroom rental, accidental injury insurance for shared bicycles and accident medical insurance , bank card theft insurance exclusively for Ant Financial platform, and insurance "anti-fraud insurance" for online shopping fraud losses, etc. As of September 1, Cathay Property Insurance achieved original premium income of 650 million yuan, an increase of 60.8% over the same period last year, and its original premium income exceeded the full year of 2016.
