news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Everbright Life Insurance lost 867 million yuan in the first half of this year, which is a significant drop compared to the profit of 316 million yuan in the same period of 2023.

Text/Daily Financial Report Li Jia

Recently, Everbright Life Insurance publicly disclosed its solvency report for the second quarter of 2024. Data showed that in the first half of this year, Everbright Life Insurance achieved premium income of 11.446 billion yuan, a year-on-year decrease of 4.85%; net profit turned from a profit of 316 million yuan in the same period last year to a loss of 867 million yuan, and the loss amount ranked second from the bottom in the net profit ranking of 60 non-listed life insurance companies.

As soon as the data came out, it triggered a heated discussion in the market. For a time, the industry began to widely discuss the performance of Everbright Sun Life Insurance. Why did it drop so much overnight? Was it because of problems in the company's business strategy that caused both revenue and net profit to be under pressure, or was it due to other reasons? Today, we will talk about Everbright Sun Life Insurance based on its performance data in the first half of this year.

The performance is not easy, with a net loss of 867 million yuan in the first half of the year

According to the data statistics disclosed in the first and second quarter solvency reports of Everbright Life Insurance, "Daily Financial Report" found that the company's performance has not been optimistic since 2024.

In the first quarter of this year, Everbright Life Insurance's premium income shrank to 4.672 billion yuan from 5.559 billion yuan in the same period last year, a year-on-year decline of 15.96%. Although it increased by 45% month-on-month to 6.774 billion yuan in the second quarter, the premium growth rate was not obvious compared with the same period last year, with a year-on-year increase of only 4.67%.

Judging from the current situation, if Everbright Life Insurance wants to officially join the ranks of "20 billion yuan income insurance companies" this year, it means that it must collect at least 8.5 billion yuan in premiums in the second half of the year to achieve its goal, which is objectively difficult.

At the same time, Everbright Sun Life Insurance has also shown a decline in profits this year. At the end of the first quarter of this year, the company had already fallen into a quagmire of turning from profit to loss, from 42 million yuan in the same period of 2023 to a loss of 624 million yuan. In the second quarter, the loss slowed down and recorded a loss of 243 million yuan, which eventually led to a total loss of 867 million yuan in the first half of the year. Compared with the profit of 316 million yuan in the same period of 2023, the decline is not small.

In fact, if we look at the time period in a longer term, the unsatisfactory performance of Everbright Life Insurance on the profit side this year can be seen as a "continuation of the chapter" of its previous weak profits under pressure.You should know that after the company just achieved its highest profit in nearly six years in 2021, its profits changed rapidly in 2022, with a huge loss of 1.357 billion yuan that year, and continued to lose 648 million yuan in 2023.

That is to say, from 2022 to the present two and a half years, Everbright Life Insurance has not been able to make a profit, with a total loss of 2.872 billion yuan. Before 2022, its profit figure had not been high, hovering around 100 million yuan most of the time. This also means that the meager profits obtained with great difficulty in previous years have not fully covered the current huge losses, and the pressure is evident.

After the horizontal comparison with itself, we will make a vertical comparison between Everbright Life Insurance's performance and that of ordinary bank-affiliated insurance companies to see what differences exist between the company's current performance and that of its competitors in the same field.

In terms of premium income, major domestic bank-affiliated insurance companies have all seen good growth. Among them, the top bank-affiliated insurance company China Post Life Insurance's insurance business income exceeded 100 billion yuan in the first half of the year, reaching 105.354 billion yuan, a year-on-year increase of 20.3%. In addition, companies such as ABC Life Insurance and Cigna Life Insurance, which had insurance business income of over 10 billion yuan in a single quarter, also grew by more than 25%. However, Everbright Life Insurance reported a year-on-year decline of -4.85%, which was not satisfactory to the market.

In terms of net profit, 6 out of 10 bank-affiliated insurance companies achieved year-on-year growth in net profit, 2 turned to profit, and only two companies, namely, Everbright Life Insurance and CITIC Prudential Life Insurance, suffered losses last year.

It can be clearly seen that among these 10 bank-affiliated life insurance companies, the performance of Everbright Life Insurance in the first half of this year was really "lacking", and the gap with its competitors has gradually begun to widen.

However, we also need to see the good side. In the first half of this year, Everbright Sun Life's investment income performance was relatively good. According to the second quarter solvency report, the company's average investment return rate and comprehensive investment return rate in the past three years were 5.16% and 5.53% respectively, with little change in recent years, which is relatively stable.

In addition, as of the end of June this year, the investment return rate and comprehensive investment return rate of Everbright Life Insurance were 2.28% and 4.35% respectively, which were at the upper-middle level among the 60 non-listed life insurance companies.

In terms of solvency, as of the end of the second quarter, the comprehensive solvency ratio of Everbright Life Insurance was 234.12%, up 16.86 percentage points from the previous quarter; the core solvency ratio was 127.71%, up 11.72 percentage points from the previous quarter.

The refund situation is not optimistic, we need to be vigilant at all times

Behind the decline in insurance business income and profit losses are the current operational difficulties that Everbright Life Insurance cannot avoid, namely the high surrender rate and surrender amount.

Let’s first look at the surrender rate. Data shows that as of the end of the first and second quarters of this year, the comprehensive surrender rate of Everbright Life Insurance was 0.78% and 1.37% respectively, showing an upward trend.

Comparing the surrender rate information in the first and second quarters of this year, it can be found that the surrender rate of the same product of Everbright Sun Life Insurance has increased significantly in 2024. For example, the company's life insurance product "Everbright Sun Life Additional Profit Account Annuity Insurance (Universal Type)" had an annual cumulative surrender rate of 7.87% in the first quarter of 2024, but it increased to 14.07% just one quarter later; the cumulative surrender amount at the end of the second quarter was 413 million yuan, while it was only 209 million yuan at the end of the first quarter.

In addition, as of the end of June, Everbright Life Insurance had a product called "Everbright Life Favorite Family Heirloom Life Insurance", which had the highest surrender rate, reaching 33.49%.

Looking at the surrender amount, in fact, since 2019, Everbright Sun Life's surrender amount has shown an upward trend year by year. From 2019 to 2021, the company's surrender amount was 547 million yuan, 652 million yuan and 958 million yuan respectively, and by 2022, its surrender amount soared to 2.813 billion yuan, a year-on-year increase of 193.63%; although the surrender amount fell back to 1.468 billion yuan in 2023, it was still at a relatively high level.

In the first half of this year, the company's surrender expenditure was also very high. Data showed that as of the end of June, the top three products in terms of surrender amount of Everbright Life Insurance had a cumulative surrender of about 475 million yuan, accounting for about half of the net profit loss of 867 million yuan in the first half of the year.

It is worth noting that from the perspective of business and product structure, the above products are all life insurance products and come from bancassurance channels, which also shows that for a long time Everbright Life Insurance has not yet gotten rid of its dependence on bancassurance channels and its reliance on financial management insurance such as annuity insurance.

Of course, the disadvantages of this are also obvious. Although selling insurance products through the bancassurance channel can enhance customer stickiness, which is beneficial to Everbright Sun Life Insurance, the high reliance on the bancassurance channel will also greatly hinder the improvement of its business development capabilities and product innovation, which is a defect that it needs to overcome at present.

As the dilemma awaits a breakthrough, can the replacement of generals bring about a new atmosphere?

Against the backdrop of poor performance in the past two and a half years, Everbright Life Insurance chose to make important changes to its senior management this year.

In April, Liu Fengquan officially resigned as general manager of Everbright Life Insurance, and the company's chairman Sun Qiang took over the duties of general manager.

Public information shows that Liu Fengquan, born in 1965, was appointed as the general manager of Everbright Sun Life in April 2019. He is one of the few external general managers in Everbright Sun Life who is not a shareholder. Before joining Everbright Sun Life, Liu Fengquan served as deputy general manager of the Strategic Planning Department, deputy general manager of the Group Insurance Sales Department, general manager of the Group Business Department, party secretary and general manager of the Guizhou Branch, Beijing Branch, and Hunan Branch, and member of the party committee and vice president of China Life E-Commerce Co., Ltd.

Sun Qiang, who is now the chairman and general manager, is a veteran of Everbright. His resume shows that he became the chairman and executive director of Everbright Sun Life in September 2020. He previously served as vice president and assistant president of China Everbright Bank. He also serves as a representative of the China Insurance Association and a member of the Fifth Life Insurance Professional Committee of the China Insurance Association.

In addition, according to the information disclosed in the second quarter solvency report, we also found that Zhang Chensong, the current deputy secretary of the Party Committee, deputy general manager and chief risk officer of Everbright Life Insurance, will no longer serve as the company's chief actuary from June. Instead, Gao Song, the company's employee supervisor and general manager of the product actuarial department, will "take over" and serve as the interim chief actuary.

It is reported that both Zhang Chensong and Gao Song are actuaries and have excellent experience in actuarial science and risk management. Among them, Zhang Chensong, who was born in the 1970s, has actuarial titles in China, North America, and the United Kingdom. He has served as the company's chief actuary for 11 years from July 2013 to his resignation. In December 2018, he served as the company's temporary financial director; in May 2019, he was promoted to deputy general manager of the company; from May 2019 to March 2023, he served as the company's financial director, and also served as a director of Everbright Yongming Asset Management Company, an executive director of the Chinese Actuarial Association, and a director of the China Insurance Society. Prior to this, Zhang Chensong served as an actuary of the actuarial department of Taikang Life Insurance and general manager of the risk management department, and was proposed to serve as the chief actuary of Huacheng Life Insurance (Preparatory).

Gao Song, who was appointed as the interim chief actuary this time, is a North American actuary born in the 1980s. He joined Everbright Sun Life Insurance in July 2006 and has served as assistant general manager and deputy general manager of the company's e-commerce headquarters, interim head and general manager of the strategic development department, general manager of the product development department and general manager of the actuarial department.

Can the successive changes in management bring new vitality to Everbright Life Insurance? Can the executives come up with more effective solutions to the above-mentioned problems as soon as possible? Daily Financial Report will continue to pay attention.

Meicai.com Statement: This article is based on public information. The information or opinions expressed do not constitute investment advice to anyone and are for reference only. The picture material comes from the Internet. Please delete if it infringes.