On April 29, Sunshine Life announced the solvency report for the first quarter of 2022 on its official website. The report showed that the net profit of Sunshine Life in the first quarter was 296 million yuan, down 52.33% year-on-year. At the same time, its core solvency adequacy ratio also suffered. It fell sharply, from 174.87% at the end of the last quarter to 126.92%. It is worth noting that the report also shows that the surrender rate of a product called Sunshine Jinsui Pension Annuity Insurance under Sunshine Life Insurance was as high as 162.19% in the first quarter.
On the one hand, the performance of Sunshine Life is under pressure. On the other hand, Sunshine Insurance Group, the parent company of Sunshine Life, has officially submitted a prospectus to the Hong Kong Stock Exchange recently, starting the sprint for listing.If the IPO is successful, Sunshine Insurance Group will become the sixth listed insurance group company in China and the fifth Hong Kong-listed insurance company.
As a "latecomer" in China's insurance industry, Sunshine Insurance was established in 2008 and will break through the "100 billion" scale in 2021.According to data released by the China Banking and Insurance Regulatory Commission and the Insurance Industry Association, in terms of original insurance premium income, in the first quarter of 2022, Sunshine Life ranked 10th among 91 life insurance companies in China, and Sunshine Property Insurance ranked among 87 property insurance companies in China. Ranked 7th.However, the growth of Sunshine Insurance has not attracted the favor of the capital market.A few days ago, the International Department of the China Securities Regulatory Commission gave 11 feedbacks on its overseas listing, covering many aspects such as operation, equity, and information security.
The prospectus shows that in 2019, 2020 and 2021, Sunshine Insurance achieved revenue of 100.837 billion yuan, 115.059 billion yuan and 119.969 billion yuan respectively, with year-on-year growth of 14.1% and 4.27% respectively in the past two full years; net profit attributable to the parent was 50.86 RMB 100 million, RMB 5.619 billion and RMB 5.883 billion, recording year-on-year growth of 10.48% and 4.7% in 2020 and 2021, respectively.It is worth noting that the growth rate of Sunshine Insurance not only revenue and net profit attributable to the parent will show a relatively obvious deceleration in 2021.Its ROE and solvency also suffered a significant decline.
In 2019, 2020 and 2021, the average ROE of Sunshine Insurance was 11.0%, 10.6% and 10.3% respectively, showing a downward trend year by year.In addition, at the end of 2021, the company's core solvency surplus was 60.89 billion yuan, and the core solvency adequacy ratio was 197%, a year-on-year decrease of 8 percentage points; the comprehensive solvency surplus was 51.126 billion yuan, and the comprehensive solvency adequacy ratio was 223%, a year-on-year decrease of 6 percentage points. percent.According to data from the China Banking and Insurance Regulatory Commission, at the end of 2021, the average comprehensive solvency adequacy ratio of the insurance industry was 232.1%, and the average core solvency adequacy ratio was 219.7%.Sunshine Insurance's solvency is significantly lower than the industry average.
In this regard, Sunshine Insurance explained in the prospectus that although it has not experienced any major service and business interruption or suspension, "we believe that the new crown epidemic may have an impact on the income of some customers, which may lead to their policy renewal ability weakened. In termsof
business segments, the personal insurance business of Sunshine Insurance accounted for 54.7%, 59.5% and 59.8% of the total premium income in the past three full years, and the property insurance business accounted for 45.3% and 40.5%, respectively. and 40.2%.In life insurance, life insurance occupies a major part; in property insurance business, although motor vehicle insurance contributes most of the income, it shows a relatively obvious downward trend: from 2019 to 2021, motor vehicle insurance business contributed 28%, 26% and 22.7% of gross premium income.
In terms of sales channels, Sunshine Insurance is polarized, and its life insurance business relies heavily on bank sales channels.In terms of life insurance business, the total premium income generated by Sunshine Life's agent channel was RMB14,959 million, RMB15,796 million and RMB15,089 million in 2019, 2020 and 2021, respectively, accounting for the same 31.1%, 28.7% and 24.8% of total premium income.At the same time, the total premium income from bancassurance channels generated through a multi-level and stable bancassurance sales network was RMB26,281 million, RMB32,455 million and RMB39,050 million, respectively, accounting for 4.5% of the total premium income for the same year. 54.6%, 58.9% and 64.2%.However, in the property insurance business, the agency sales channel is the most important sales channel of Sunshine Property & Casualty Insurance. In 2019, 2020 and 2021, the original insurance premium income from agency sales channels accounted for 30% of the total original insurance premium income of Sunshine Property & Casualty Insurance. 68.6%, 72.9% and 72.5%.
In addition to operational issues, 7 of the 11 feedback opinions given by the International Department of the China Securities Regulatory Commission on its overseas listing directly pointed to the issue of shareholder equity.From the perspective of the shareholding structure, Sunshine Insurance has no actual controlling shareholder. The feedback shows that in addition to requiring Sunshine Insurance to make further explanations to its shareholders, the China Securities Regulatory Commission should also specifically state that "the current status of the company's shareholder Beijing CDH Oriental Investment Management Co., Ltd. The reasons why the shareholders have not restored the shares they held in accordance with the requirements of the regulatory authorities, whether there are disputes or disputes over the relevant shares, and whether there are substantial obstacles to the issuance.”
The opinion also mentions whether the administrative penalties imposed by the regulatory authorities on the company and its subsidiaries during the reporting period are major administrative penalties, and please explain the implementation of the rectification.According to information on the official website of the China Banking and Insurance Regulatory Commission, Sunshine Insurance has received 7 fines from regulatory authorities at all levels in the past month.The most recent one was issued by the Chongqing Banking and Insurance Regulatory Bureau on May 25, 2022. The punishment object was Tang Zhi, the former executive of the Chongqing Branch of Sunshine Insurance Agency Co., Ltd. Or the act of providing false reports and materials shall be held responsible for management, and the result of the punishment shall be the revocation of Tang Zhi's executive qualifications.
