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Investor Network - Ge Fanmei

"Thirty years in the east, thirty years in the west."

In less than 30 years, the former financial giant, Anbang Insurance, went from glory to decline.

On August 2, the State Financial Supervision and Administration issued an approval letter, agreeing to allow Anbang Insurance Group Co., Ltd. and Anbang Property Insurance Co., Ltd. to enter bankruptcy procedures.

This means that the insurance giant, whose assets once reached 2 trillion yuan, was taken over in 2018 and whose former chairman was sentenced to 18 years in prison, has officially exited the stage of history.

Anbang Insurance goes bankrupt

Anbang Insurance Group and Anbang Property and Casualty Insurance have entered bankruptcy proceedings!

The official website of the State Financial Supervision and Administration Bureau announced on August 2 that it has agreed in principle to allow Anbang Insurance Group Co., Ltd. and Anbang Property Insurance Co., Ltd. to enter bankruptcy proceedings. Both approvals were dated June 12, 2024.

The reply shows that the "Request for Instructions on Applying for Bankruptcy and Liquidation of Anbang Insurance Group Co., Ltd." and "Request for Instructions on Applying for Bankruptcy and Liquidation of Anbang Property and Casualty Insurance Co., Ltd." have been received. After research, it is agreed in principle that Anbang Insurance Group Co., Ltd. and Anbang Property and Casualty Insurance Co., Ltd. will enter bankruptcy proceedings.

The State Financial Supervision and Administration Bureau also requires the two companies to carry out follow-up work in strict accordance with relevant laws and regulations. If any major situation occurs, they should report it to the Financial Supervision Bureau in a timely manner.

Looking back at its development history, Anbang Insurance has experienced rapid expansion and eventual bankruptcy. Public information shows that Anbang Insurance was established in 2004 and initially began operations as Anbang Property and Casualty Insurance Co., Ltd.

In the following years, Anbang Insurance expanded rapidly, with premium income exceeding 1 billion yuan, and opened branches in many provinces, achieving nationwide business network coverage.

In 2005, Anbang Property & Casualty Insurance Co., Ltd. increased its capital for the first time and introduced a new shareholder, the state-owned enterprise Sinopec Group, and its registered capital increased from 500 million yuan to 1.69 billion yuan.

After several years of capital increase and mergers and acquisitions, Anbang Insurance embarked on the road of groupization, with a substantial expansion of asset scale. In 2011, it acquired Chengdu Rural Commercial Bank and reorganized and renamed it Anbang Insurance Group. In 2014, it increased its capital twice, and its registered capital soared to 61.9 billion yuan, becoming the insurance company with the highest registered capital in the country.

In an era when it was hard to get a license, Anbang obtained four licenses for health insurance, life insurance, asset management, and pension insurance in just four years from 2010 to 2014. At that time, Anbang's premiums were close to 100 billion yuan. In 2014, Wu Xiaohui surfaced and officially replaced Hu Maoyuan as the legal representative of Anbang Group, and then began to expand its army.

As a capital tycoon, it has also stirred up capital turmoil. In the second half of 2014, Anbang Insurance raised its stake in China Minsheng Bank; in October 2014, it announced the acquisition of the Waldorf Astoria Hotel in New York, USA, at a price of US$1.95 billion; in 2015, it intervened in the "Wanbao dispute" and spent a huge amount of money to raise its stake in Vanke.

However, rapid expansion also brought about the accumulation of risks. In 2018, due to the suspected economic crimes of Wu Xiaohui, the former chairman of Anbang Insurance, Anbang Group was taken over by the China Insurance Regulatory Commission, and the takeover period was extended for one year in 2019. During the takeover period, the regulatory authorities promoted the risk resolution and asset disposal of Anbang Group.

Liquidation procedures have already been initiated

There are multiple reasons behind Anbang Insurance's bankruptcy. The company's chairman Wu Xiaohui was suspected of illegal money laundering. The company's financial products were irregular and suspected of illegal fundraising, which further aggravated the company's financial problems, insufficient solvency, frequent debt problems, etc., and ultimately triggered the takeover conditions in the "Insurance Law", leading to its takeover by the China Banking and Insurance Regulatory Commission.

In 2018, Anbang's former chairman Wu Xiaohui was prosecuted for suspected economic crimes. Wu Xiaohui was sentenced to 18 years in prison and his property of 10.5 billion yuan was confiscated.

On February 23 of the same year, Anbang Insurance was officially taken over. At that time, the former China Banking and Insurance Regulatory Commission announced that in view of the fact that Anbang Insurance Group had violated the provisions of the Insurance Law and might seriously endanger the company's solvency, it was decided to take over Anbang Group in accordance with Article 144 of the Insurance Law for a period of one year.

Subsequently, on February 22, 2019, when the one-year takeover was about to expire, the former China Banking and Insurance Regulatory Commission announced that the takeover period of Anbang Insurance Group would be extended by one year to February 22, 2020 in accordance with the law.

On February 22, 2020, when the former China Banking and Insurance Regulatory Commission ended its takeover of Anbang, it stated: "Anbang Group and Anbang Property and Casualty Insurance will be liquidated and deregistered in accordance with the law."

In July 2019, the former China Banking and Insurance Regulatory Commission approved China Insurance Security Fund Co., Ltd., China Petrochemical Corporation, and Shanghai Automotive Industry (Group) Corporation to jointly invest in the establishment of a new insurance entity - Dajia Insurance Group, with a registered capital of 20.36 billion yuan. The legal representative of the company is He Xiaofeng, head of the Anbang Insurance takeover working group.

On February 22, 2020, in accordance with relevant regulations, the newly established Dajia Insurance Group Co., Ltd., which was spun off from Anbang Insurance Group Co., Ltd., has basically acquired the ability to operate normally, and the China Banking and Insurance Regulatory Commission has ended its takeover of Anbang Group in accordance with the law.

On September 14, 2020, Anbang Group and Anbang Property & Casualty Insurance Co., Ltd. respectively released announcements on their official websites regarding the proposed dissolution and liquidation. The announcements stated that Anbang Group and Anbang Property & Casualty Insurance Co., Ltd. had held shareholders' meetings to resolve the dissolution of the companies and set up a liquidation group (in preparation). They would apply to the (former) China Banking and Insurance Regulatory Commission for dissolution and organize liquidation in a timely manner after obtaining relevant administrative approvals.

During the period of the CBIRC's takeover, the legitimate rights and interests of insurance consumers were effectively protected. Previously, according to relevant officials of the former CBIRC, Anbang Group concentrated on selling more than 1.5 trillion yuan of medium- and short-term wealth management insurance products from 2015 to the first half of 2017, and there was a peak in maturity payments and policy cancellations from 2018 to early 2020. As of January 2020, all of the 1.5 trillion yuan of medium- and short-term wealth management insurance products issued by Anbang Group before the takeover had been redeemed, and no overdue or default incidents had occurred.

The bankruptcy of Anbang Insurance Group not only marks the end of a company, but also reflects a major test of China's insurance industry supervision and governance capabilities. (Produced by Siwei Finance)

Anbang Insurance