Two days later, on July 17, the China Insurance Regulatory Commission announced the detailed capital increase of nine insurance companies, including five property insurance companies and four life insurance companies, namely Dubang Property Insurance, Huatai Property Insurance, Bank of China Insurance, Volkswagen Insurance, Yongan Property Insurance, AVIC Samsung, Xincheng Life Insurance, Sino-American Metropolis and Haier new york Life Insurance.
Wu Dingfu analyzed the reasons for the lack of solvency at the meeting: "Apart from the continuous decline of the stock market, the key reasons are that some companies have extensive development models, unreasonable product structures, weak profitability and even long-term losses, and mainly rely on shareholders to increase capital or issue subordinated debts to maintain solvency. At the same time, some companies have defects in their governance structures and have not established effective internal risk management mechanisms. The short-term behavior in operation is more prominent. "
At the same time, the CIRC also said that for companies with insufficient solvency in rapid development, it is necessary to urge them to raise capital by limiting business scale, strengthening reinsurance, optimizing business structure, and raising capital through listing, increasing capital and shares, and issuing subordinated debt, so as to improve their solvency and alleviate the pressure of insufficient solvency.
In the same period, the CIRC also announced that in the first half of 2008, 23 insurance companies increased their registered capital, and many of them increased their capital last year.
Although so many companies are busy increasing capital, and most of them are large-scale, in the insurance industry, there seems to be nothing to be afraid of.
An accountant of Dubang Property Insurance believes that one of the main factors affecting solvency lies in its shareholders' equity. Their company also completed the capital increase this year, which greatly improved the company's solvency.
A manager of Pacific Antai Insurance Company believes that this is a common phenomenon in the industry. What proportion is adequate and safe varies from country to country.
An insider of Ping An Group believes that companies with insufficient solvency should be more due to the rapid growth of short-term business.
Relevant persons of United Life also said that the solvency adequacy ratio is equal to the ratio of the actual capital to the minimum capital of the insurance company, and the minimum solvency is an early warning indicator set by the insurance company to further support future development on the basis of taking on the existing liabilities. Solvency is a dynamic indicator. Even if there is insufficient solvency in the course of operation, insurance companies can take various measures to solve this problem, such as increasing capital, rationally using insurance funds, adjusting business structure and controlling expenses.
The CIRC urges insurance companies to fill in their homes.
If there is not enough fear, why should the CIRC introduce new regulations? What is solvency?
The ability to pay is a warning line to protect the interests of the insured. It refers to the ability of an insurance institution to fulfill its liability for compensation or payment, and it is also a comparison between the financial strength of an insurance institution and its own liability for dangerous compensation.
On July 4th, 2008, China Insurance Regulatory Commission issued the Provisions on the Management of the Solvency of Insurance Companies, which came into effect on September 10th, 2008. On the same day, the Provisions on the Administration of Solvency Limits and Supervision Indicators of Insurance Companies were abolished.
According to the latest regulations issued by the China Insurance Regulatory Commission, according to the solvency status, insurance companies are divided into three categories: companies with insufficient solvency, companies with sufficient solvency I and companies with sufficient solvency II, with solvency adequacy ratios below 100%, 100% to 150% and above 150% respectively.
Sheng, spokesman of Ping An Group, explained in an interview with the Securities Daily that the new regulations of the China Insurance Regulatory Commission are timely, more scientific and reasonable, and stricter in supervision, which is conducive to the healthy and steady development of the whole industry. In terms of solvency, Ping An is the best second category in the new standard classification. The solvency of the company mainly comes from sufficient capital, good business choice and cost control.
The manager of the strategy department of the above-mentioned joint venture insurance company said that the new policy issued by the CIRC should be based on the consideration of risks. China's insurance industry is different from foreign countries, and it will not be easily dumped. However, similar to the frequent disasters in the first half of this year, the increase of major claims and a large number of runs may also lead to risks in the company's operation.
Professor Hao, Dean of the School of Insurance of the Central University of Finance and Economics, also believes that the new regulations are more standardized and highlight the importance of solvency.
However, it is worth considering that Professor Hao also pointed out that if European and American solvency standards are adopted to supervise insurance companies in China, it is equivalent to using a doctor's standard to require primary school students, both good and bad. In the long run, there is no problem with these standards, but in the short run, a little flexibility is actually possible. Of course, regulators are right to keep sounding the alarm.
"However, we should see that solvency is a concept of time. For an enterprise, if the long-term solvency is insufficient, there must be great risks. If the shortage only occurs at a certain point, it is easy to adjust through business adjustment. Let's make an analogy. Insurance companies in China are teenagers. Although this teenager can't afford 100 kg of rice, we can't say that he has no strength. " Professor Hao analyzed.
The company is insolvent/bankrupt
Judging from the news released by the China Insurance Regulatory Commission, it is not the first time this year that the solvency of insurance companies is insufficient. Wu Dingfu, Chairman of China Insurance Regulatory Commission, previously revealed that at the end of 2007, 65,438+00 insurance companies were found to be insolvent.
In 2005, the China Insurance Regulatory Commission also pointed out that domestic Chinese life insurance companies generally have the problem of insufficient solvency. China Life Insurance Group, Pacific Life Insurance and Xinhua Life Insurance were found to be insolvent, among which Pacific Life Insurance was the most serious.
It caused an uproar after being exposed by the media at that time. Someone once figuratively compared: It's like an insolvent enterprise can go to a bank for a loan?
However, Yang, director of the Regulation Department of China Insurance Regulatory Commission, said in an interview that if the solvency of insurance companies is too low, they will be in danger of bankruptcy, but in China, insurance companies will not go bankrupt easily. Because solvency is an important indicator to measure whether an insurance company can continue to operate stably, the insurance regulatory authorities in China have very strict supervision over the solvency of insurance companies.
Therefore, in 2006, CIRC urged many insurance companies to enrich their capital by increasing capital and shares, issuing subordinated debt and introducing overseas strategic investors.
In 2007, insurance companies such as Sino-British Life Insurance, Minsheng Life Insurance and Sino-German Allianz implemented large-scale capital increase and share expansion. China Life Insurance, China Ping An and China Pacific Insurance, the three giants of domestic insurance industry, have successively landed in the A-share market for financing. By the end of 2007, the total capital of the insurance industry had exceeded 200 billion yuan.
Even so, in the eyes of Professor Hao, there is still nothing to be afraid of. The total capital of the whole insurance industry is equivalent to 1/3 of China Industrial and Commercial Bank.
Professor Hao believes that "China's insurance market is a market for bean sprouts, but it is a market with great development potential. Overseas markets have developed to a certain extent, and there is little room for expansion. If you have good expectations for the future, many problems will be solved with the rise of new business. "
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.