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China’s Top 25 Insurers
Contents November 2017 Foreword p. 01 The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next? p. 02 China’s Insurers Turn To Big Data And Digital Technology For Competitive Edge p. 08 China’s Top Life Insurers p. 14 China’s Top Property & Casualty Insurers p. 26 China’s Top Reinsurer p. 38 Market Share Of China’s Life Insurers p. 39 Market Share Of China’s Property & Casualty Insurers p. 40 Contacts p. 41
China’s Top 25 Insurers Foreword S&P Global Ratings presents China's Top 25 Insurers, a comprehensive guide to leading companies in the fast-growing Chinese insurance marketplace. This publication includes recent articles from our analytical team on the sector's outlook and dynamics. In the back of the book, please find credit profiles on 25 leading sector companies: 12 life insurers, 12 property and casualty (P&C) insurers, and a re-insurer. China's insurance sector continues to expand at a rapid clip. Rising demand for insurance in China comes on the back of the country's aging demographics and increasing affluence among its citizens, who are seeking wealth protection against unexpected events and preparing for retirement. The rapid buildout in the country's insurance sector has contributed to volatility in performance and increased regulatory oversight. Amid fast asset growth in 2015-2016, insurers increased their allocations to risky investments in a quest to increase returns. Some cashed-up sectors sought to take over listed companies in sectors ranging from property to tourism. Such risky behavior led the Chinese insurance regulator to publish new rules and tighten discipline. We believe technology will increasingly define China's insurance market. Sector leaders are offering more products through digital means. Not only can this help cut costs amid intense competition and rising regulatory burdens, the "big data" derived from online services could also help insurers to customize services and offer more innovative products. As for China's mid-tier insurance companies, we believe there remain significant opportunities to be tapped in the world's fastest-growing insurance marketplace. We hope you will find this publication useful. As always, we welcome your comments and feedback on our research and insights. Vera Chaplin Managing Director and Lead Analytical Manager Financial Services Ratings Foreword 1
China’s Top 25 Insurers
The China Insurance
Sector’s ‘Year Of
Living Dangerously’
Is Over. What’s Next?
Primary Credit Analyst:
Eunice Tan, Hong Kong, (852) 2533-3553; eunice.tan@spglobal.com
Secondary Contacts:
WenWen Chen, Hong Kong, (852) 2533-3559; wenwen.chen@spglobal.com
Mark Li, Hong Kong (852) 2533-3585; mark.li@spglobal.com
Research Assistants:
Ce Wang, Hong Kong
Richie Jiang, Hong Kong
C
hina’s insurance sector is integral to the country’s deleveraging-related
reforms. This is because broadly speaking, insurers can either add to the
country’s financial risks, or help offset them.
In 2016, insurers seemed intent on adding to high-profiles forays overseas. Regulators
systemic risks. The sector attracted new premiums responded by substantially tightening sector
with customer-pleasing products, and increased investment rules and subjecting industry players
allocations to risky assets, in some cases taking to disciplinary investigations.
over listed Chinese companies or making
2 The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next?China’s Top 25 Insurers
whose managers have recently been investigated
Overview or sanctioned for misconduct or engaging in risky
practices include Anbang Insurance Group Co. Ltd.,
-- Regulators have issued new regulations Foresea Life Insurance Co. Ltd., and Evergrande
and sanctioned industry participants after Life Insurance Co. Ltd.
insurers undertook aggressive strategies
-- Officials are seeking more market While the overall risks in the system have been
discipline, in both investment allocation reduced, some of the conditions that helped fan
and product offerings the high-risk behavior persist. China’s insurance
-- Insurers are likely to increase allocations market is fast growing yet heavily competitive, with
to long-term infrastructure investments to sector players regularly poaching customers—and
better match their long-term liabilities employees—from each other. Interest rates remain
low by historical standards, and with China’s
economic growth rate set to structurally decline,
At the same time, other rules have been yield-hunting will remain a major pursuit.
liberalized to encourage insurance companies to
participate in state-guided investment activities The low interest rate environment will also force
to shore up indebted enterprises and underwrite insurers to increase their loss-reserve provisioning.
infrastructure investment. S&P Global Ratings We forecast that the discount rate for insurance
expects state planners will play a larger role in reserve provisions (the 750-day moving average
the sector’s investment allocations. This too could yield curve) will hit another new low for insurers
entail risk, however, if insurer’s balance sheets are in 2017. A lower discount rate means higher
channeled to bail out heavily indebted SOEs. provisioning, which in turn will hurt profitability
and could lead to capital pressure for insurers.
We believe insurers will struggle to absorb
higher regulatory costs over the next few years, Higher reserves will pinch the most for insurers
particularly in a low interest-rate environment. that are focused on underwriting short- to
Indeed, the challenge to boost investment returns medium-term duration products. For the
could encourage continued risky behavior, despite traditional life insurers focused on underwriting
an official emphasis on increased discipline. In our long-duration protection products (duration
view, China still has a long way to deepen its risk exceeding 40 years), the revised requirements will
management practices. help reduce regulatory capital pressures. This is
because recently updated reserve requirements
are intended to promote long-duration products.
The Rules Are Different,
But Conditions The Same Overall, we expect higher regulatory costs, low
The dismissal of Xiang Junbo, China’s top interest rates, and weaker profitability to chip
insurance regulator, in March 2017, signaled the away at the insurance sector’s capital buffers in
close of a period of aggressive market jostling by the coming year or two. To fund shortfalls, and
China’s fast-growing insurance sector. Not only given increasing capital controls and currency
have the rules changed (see table 1), but industry restrictions, we expect insurers will likely tap the
participants are keenly aware that they will face onshore debt markets.
career and disciplinary risks for undertaking
aggressive competitive strategies. Companies
The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next? 3China’s Top 25 Insurers
TABLE 1: CIRC Rule Changes Are Focused On Strengthening Risk Controls
CIRC Circular
Date No. & Related Area Regulation Summary
20-Sep-2017 #67—Risk Management CIRC issues proposed guideline on C-ROSS Phase II.
28-Jul-2017 #299—Risk Management CIRC proposes enhanced regulation on asset liability management.
20-Jul-17 Regulatory Proposal CIRC releases the second draft request for comment on insurance companies’ shareholding management
11-Jul-2017 #174—Market Conduct CIRC takes action to strengthen discipline in the motor insurance market.
#163—
4-Jul-2017 CIRC implements guidelines on the design and regulatory registration of P&C insurance products.
Product Development
5-Jun-2017 #143—Market Conduct CIRC initiates industry-wide self-examination in areas of regulatory reporting and capital authenticity.
#134 CIRC reiterates the protection characteristic of life insurance products and implements guidelines on
23-May-2017
-Product Development product development.
9-May-2017 #128—Risk Management CIRC enhances compliance in insurance asset utilization to rein in risky investment behavior in the market.
7-May-2017 #44—Risk Management CIRC aims to plug regulatory loopholes and to step up supervision to overcome shortcomings in the system.
Insurance funds can finance PPP enterprises under their infrastructure investment plans by means of debt,
5-May-2017 #41—Investments
equity, or a combination of the two.
CIRC will speed up approvals for financing PPP projects related to programs such as Belt and Road initiatives,
5-May-2017 #41—Investments
development of the Beijing-Tianjin-Hebei region, etc.
4-May-2017 #42—Investments Incentives introduced for insurance funds to participate in national development strategies.
CIRC enhances market conducts in areas of capital authenticity, corporate governance, and
28-Apr-2017 #40—Market Conduct
investment behavior.
23-Apr-2017 #35—Risk Management CIRC outlines 39 points across 10 areas of risk.
#34—Risk Management,
20-Apr-2017 CIRC highlights upcoming regulatory enhancements.
Market Conduct
CIRC caps the amount investable by Chinese insurers in a single stock at 5% of the insurer’s total assets (from
24-Jan-2017 #9—Investments
previous 10%).
24-Jan-2017 #9—Investments Insurers are restricted to having 30% of their total assets invested in equities (from previous 40%).
CIRC narrows the scale of investments on listed companies, and limits targets on financial industry or
24-Jan-2017 #9—Investments
insurance-related businesses.
#115—
3-Jan-2017 CIRC implements guidelines on insurance product designs.
Product Development
Regulatory Proposal on
29-Dec-2016 CIRC updates shareholder ownership to cap individual ownership at 33% from 51%.
Shareholder Ownership
#22—
1-Dec-16 CIRC sets up sales limits on short-term insurance products.
Product Development
CIRC—China Insurance Regulatory Commission. PPP—Public-private partnerships. C-ROSS—China Risk Oriented Solvency System.
P&C—Property and Casualty. Sources: CIRC, S&P Global Ratings.
4 The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next?China’s Top 25 Insurers
So What’s Next? with, for example, insurers acquiring major stakes
in banks and real estate companies. However, we
The removal of the chairman of the China Insurance
anticipate the risk charges for long-term equity
Regulatory Commission (CIRC), numerous public
investments to tighten in the upcoming C-ROSS
statements by financial regulators, and the
Phase 2 review.
flurry of revised insurance-sector guidelines, all
point to a renewed focus on risk management
and tighter discipline. In our view, these actions Different products
reflect a return to the fundamental principles of On the product side, strong interbank liquidity
insurance—providing protection and prudent conditions have encouraged insurers and other
risk management. financial players to focus on profitable, short-term
endowment policies. However, these products
Reforms will affect both sides of the balance are vulnerable to abrupt changes in short-term
sheet: insurers will be selling a different liquidity and, amid closer regulatory scrutiny, such
mix of products; and investing their assets strategies will be harder to pursue.
differently as well.
Insurers have also responded to regulatory
pressures by selling more protection products. This
C-ROSS Phase 2
segment has a higher profit margin than savings
We believe that planned updates in the China Risk-
products, and has boosted insurers’ embedded
Oriented Solvency System (C-ROSS) framework
values. However, we expect intensified competition
over the next three years will help to rein in some
among the traditional life insurers in this product
of the risky equity investment behavior. C-ROSS
line, which could compress margins over time.
is a framework designed to bring the country’s
insurance sector in line with global solvency In our view, participating policies will become more
standards. With C-ROSS Phase 2 in the pipeline, attractive for the Chinese insurance market given
we anticipate the regulator will review risk their profit-sharing features with policyholders
charges to ready the regulations for upcoming (i.e., they pay dividends). The products, which
International Financial Reporting Standards (IFRS) combine a floor in investment returns with
accounting updates. Under IFRS 9 and IFRS 17, we upside potential (unguaranteed returns), will
anticipate that insurers’ financial performance will require insurers to invest in a combination of low-
become more volatile. and high-risk investments. The profit-sharing
features of participating insurance products
When S&P Global Ratings assesses the capital
will help mitigate some of the investment risks
position of Chinese insurers, we deduct entirely
faced by insurers.
some of the long-term equity investments
undertaken by insurers. This is because we While short-term universal life products have
consider such investments to be strategic in nature received bad publicity in China, we think that
and unlikely to be sold during volatile market mid-term (around five to 10 years) savings
conditions. By contrast, according to the current products will remain attractive for China’s under-
C-ROSS treatment, risk charges for long-term developed insurance market. For insurers, these
equity investments are lower when compared with endowment products have lower profit margin than
typical (passive) equity investments. In our view, protection products. However, these products,
this C-ROSS treatment prompted some insurers which provide a combination of life protection
to undertake aggressive investment strategies,
The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next? 5China’s Top 25 Insurers
and wealth management, can potentially reduce is another likely source of future investments for
insurers’ exposure to asset-liability mismatch insurers’ expanding balance sheets.
risk. In addition, they can be easily explained to
policyholders, reducing mis-selling risk. We also anticipate that the insurance sector will
engage in privatization deals, debt for equity
swaps, and other transactions that will arise
And a shifting investment focus
from state-guided efforts to reduce financial
Another key question for regulators is where and risk and encourage corporate deleveraging. For
how insurance companies invest their rapidly example, China Life Insurance Co. Ltd. was one
expanding assets. This has been an issue going of 10 companies (both private and state-owned)
back to 2007, when Ping An Insurance (Group) that participated in a mega US$11.7 billion deal to
Co. of China Ltd. purchased the Dutch-Belgian sharply reduce China Unicom’s state ownership
financial services firm Fortis at a top-of- levels. China Life took a 10% stake in Unicom, the
the-market price. largest of all the deal participants.
In 2016, at a time when Chinese insurers’ asset China’s insurers collectively have Chinese renminbi
bases were rapidly expanding, the sector 16.43 trillion (US$2.15 trillion) in assets (see chart
participated in a number of headline-grabbing 1). As such, the sector is in a position to play a role
deals, including sizeable or controlling stakes in the country’s deleveraging and financial reform
in listed Chinese companies. Concerns of efforts. Still, questions remain, such as whether
concentrated exposure led the regulator to cap insurers will be properly compensated for any
individual investment stakes at no more than 5% of potential high-risk state-guided investments.
the insurer’s assets. This could come, for example, through guaranteed
returns, or deal sweeteners by way of tax breaks,
We expect the sectors’ real-economy investments
price discounts, or other benefits.
to expand, amid growing concerns and restrictions
on equity investments. Regulators have put in
place supportive policies and tax incentives to Chart 1: Investment Allocation In China's Insurance Industry
facilitate this new paradigm. For example, we see Other investments Stocks and funds Bonds Bank deposits Total
Chinese insurers increasingly shifting their fixed- (RMB tril.)
income investments toward local government 16
and infrastructure-related projects. By doing so,
14
the insurers are able to benefit from capital gains
tax-free policies, in particular for local government 12
fixed-income investments. 10
Another benefit of increasing allocations to 8
infrastructure: this sector provides long-term 6
investments that will help alleviate the sector’s
asset-liability mismatch problem. New guidelines 4
and an emphasis on the private-public partnership 2
(PPP) model should provide further opportunities.
0
The central government’s “Belt and Road” initiative 2014 2015 2016 2017H1
RMB: Renminbi. tril.: Trillion. H1: First half. % yoy: Year on year percentage growth.
Source: China Insurance Regulatory Commission.
6 The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next?China’s Top 25 Insurers
TABLE 2: China Insurance Premiums Have Seen Multi-Year Growth
2013 2014 2015 2016 2017H1
Total Direct Premiums* (RMB bil.)
Life 1,074 1,269 1,586 2,169 1,786
P&C 648 754 842 927 528
No. of Insurers
Life 64 65 73 81 83
P&C 70 71 75 77 82
* As of June 30, 2017. RMB: Chinese renminbi. bil.: Billion. P&C: Property and Casualty. H1: First half. Source: China Insurance Regulatory Commission
No Risk, No Reward underlying assets in these alternative investments
are commonly tied to the infrastructure and
More stringent risk and discipline controls will not real estate sectors. In our view, these shadow-
completely shut down recent trends, or instantly banking-related investments are high credit risks
mature the sector’s risk management culture. Risk and less transparent when compared with vanilla
management remains an evolving story in China. fixed-income investments. We consider these
instruments as illiquid, and have observed that
Amid concerns of reckless and ill-timed forays
some Chinese insurers continue to hold them.
into the global investment markets, we expect
overseas activity to slow. Tighter capital controls Keep in mind that in the past year, a large volume
also act as constraint on overseas acquisitions. of guidelines has been introduced over a short
That said, we believe Chinese insurers will continue span of time. Effectively executing the new rules
to show interest in global activity, given the wider could prove challenging, given that the changes
world’s broader choices of investments. The have come swiftly, and China’s managerial risk-
current allocation towards overseas investments management know-how is still developing. While
is low, when compared with international insurers. we believe discipline will improve and risks become
Chinese insurers have only US$49 billion in more contained amid tighter supervision, we
foreign-currency investments. also expect that some risk-control efforts will
remain superficial. On the bright side, Chinese
We also note that allocations to alternative
policymakers seem to be quickly learning from
investments (wealth management, debt schemes,
their missteps, as indicated, for example, by the
and trust plans) reached a new high for most
planned revisions to the C-ROSS framework.
insurers in 2016 and remain high. Some alternative
investments benefit from credit enhancement Only a rating committee may determine a rating action and this
features that often come in the form of collateral report does not constitute a rating action.
or credit supports from external parties. The
The China Insurance Sector’s ‘Year Of Living Dangerously’ Is Over. What’s Next? 7China’s Top 25 Insurers
China’s Insurers
.Turn To Big Data And
Digital Technology For
Competitive Edge
Primary Credit Analyst:
Eunice Tan, Hong Kong, (852) 2533-3553; eunice.tan@spglobal.com
Secondary Contacts:
WenWen Chen, Hong Kong, (852) 2533-3559; wenwen.chen@spglobal.com
Mark Li, Hong Kong (852) 2533-3585; mark.li@spglobal.com
C
hina’s insurance marketplace is growing fast but the sector's profit margins
are moderate. Our survey of the 25 leading Chinese insurers shows that new
premiums written and assets under management continue to rapidly expand.
However, returns on equity and assets have credit profiles. We expect that insurers who can
edged down for many insurers, amid volatile master big data and adapt to new cost-saving
capital markets, low interest rates, and intense technologies will be better able to withstand
competition. While this year's strong Chinese stock pressures on earnings.
market performance might boost earnings in the
short run, in the long run we believe the country's Our study also highlights a continued widening
insurers need to improve their business strategies credit quality between the insurance majors and
and risk management in order to sustain their small and midsized players, with capitalization
8 China’s Insurers Turn To Big Data And Digital Techonology For Competitive EdgeChina’s Top 25 Insurers
Fast Growth, Slower Profits
Overview We examined the financial data of 25 Chinese
-- Competition is intensifying for insurers over the past several years: the top
Chinese insurers given the backdrop 12 life insurers, top 12 property and casualty
of slower economic growth and rising (P&C) insurers, and one reinsurer. Our survey
regulatory costs covered their premiums, investment assets, key
-- China's biggest insurers tend to have profitability metrics, and solvency ratios. One
stronger financial profiles and a better key takeaway is that assets are growing faster
capacity to adjust to a changing landscape than profits, which erodes capital bases. This is
-- New technologies will shape the ultimately an unsustainable path.
direction of insurance companies in
areas of distribution, pricing, and claims China's bigger players have the strongest financial
administration profiles and have been able to maintain their
-- A regulatory crackdown on risky practices dominant market shares. Of the four biggest
will cause pain to some insurers, but is life insurance companies, three have above-
necessary for long-term stability average business and financial profiles: China
Life Insurance Co. Ltd., Ping An Life Insurance
Co. Ltd., and China Pacific Life Insurance Co. Ltd.
The exception is Anbang Life Insurance Co. Ltd.
being the key constraint on credit profiles.
Anbang has jumped up the ranking to third from
Increasing allocations into alternative investments
fourth last year in the life segment, and has a 9%
and equities, in pursuit of investment yield, have
market share. But this aggressive growth has left
diluted capital positions. The bigger players
the company with a thinning regulatory solvency
tend to have the strongest stand-alone credit
buffer, given the capital intensive products that
profiles, due to their well-established franchises
Anbang has sold.
and extensive distribution networks, and better
access to funding.
Chart 1: Average Profitability Of 12 Leading Chinese Life Insurers
Return on equity Net investment yield*
That said, given strong overall market growth Return on asset § Adjusted return on asset ±
for insurance products, the future is still (%)
18
wide open. A key deciding factor might be
technology. We believe technology will disrupt 16
traditional insurance business models. One 14
example is Zhong An Online Property & Casualty 12
Insurance Co., an online Chinese insurer which 10
recently filed to list on the Hong Kong stock
8
exchange. Digitalization, big data analytics,
6
and access to multi-distribution channels
will increasingly dictate the future of China's 4
insurance marketplace. 2
0
2013 2014 2015 2016
*Net investment yield calculation includes realized gains/losses, shares of profits of affiliates, and
excludes unrealized gains/losses. §Return-on-asset calculation excludes investment gains/losses.
±Adjusted-return-on-asset calculation includes investment gains/losses .
Source: Company information, S&P Global Ratings' calculations.
China’s Insurers Turn To Big Data And Digital Techonology For Competitive Edge 9China's Top 25 Insurers
While the biggest players have not escaped the played pioneering roles in providing insurance
margin pressures arising from intense competition coverage to the inland cities. Such coverage
and rising regulatory costs, small and midsize (medical, pension, agriculture and catastrophe) is
insurers are more vulnerable to these trends. For often thin in margins.
example, this year the China Insurance Regulatory
Commission (CIRC) imposed sales limits on short- Given their huge asset bases, GRE insurers have
to medium-duration products, which were popular also been directed to buy shares to stabilize the
for their potential for investment gains, and has stock market in financial downturns. In recent
guided the sector to focus more on long-term years, GRE insurers have expanded overseas,
protection products. This shift has forced the both through acquisitions and organically. This is
smaller players--many of which relied heavily on in part to support the insurance needs of Chinese
bancassurance distribution channels--to shift companies as they go global, including through
their product strategies and start building their "Belt and Road" initiatives. Increasingly, we expect
own agency force. This is costly. the big state insurers to allocate more assets to
real-economy development projects and national
One upside to the shift to longer-duration products development strategies. This could prove a good
is that they generally have higher margins, so in match for their long-term liabilities; on the other
the long run could shore up profitability. Again, hand, state-directed investments raise concerns
however, the more established players have over risk-versus-return calculations.
competitive advantages, due to their already
established agency sales forces. For them, the
main pressure of the new dynamics has been the
The P&C Sector: New Stress,
poaching of staff by smaller players trying to scale New Opportunities
up their agency forces. Big players have even a bigger sway in China's
P&C insurance market. PICC alone holds a 34%
The big get bigger but it's not all upside market share. The next biggest player in this
segment, Ping An Property & Casualty Insurance
The Chinese insurance industry's strong market
Co. of China Ltd., has nearly a 20% share. Add in
growth has created a few Chinese insurers that
the third largest, China Pacific Property Insurance
are among the largest globally in the life, nonlife,
Co. Ltd., and nearly 60% of this segment's market
and reinsurance sectors. This includes China
share is locked up.
Life Insurance, China Reinsurance (Group) Corp.,
and PICC Property and Casualty Insurance Co.
We believe the launch of the second phase of
Ltd. These insurers continue to have strong
motor insurance pricing reforms in China will
relationships with the central government,
increase volatility in the underwriting performance
which feed through into lower funding costs
of P&C insurers over the next two years. That's
and bigger potential government support in the
because motor insurance contributes more than
case of distress.
70% of the sector's premium income. However, we
expect the reforms to support a more sustainable
However, Chinese government-related insurance
and healthy market discipline in the sector over
groups also have the responsibility to take on
the longer run.
some business that commercial players have
less incentive to provide. For example, the big
government-related entity (GRE) insurers have
10 China’s Insurers Turn To Big Data And Digital Techonology For Competitive EdgeChina's Top 25 Insurers
On June 9, 2017, CIRC announced updated motor insurance products) as part of the reforms
premium adjustment factors for motor insurance, will prompt policyholders to acquire motor
allowing for more pricing autonomy within the insurance policies directly from insurance
sector. In particular, the regulator will now companies, bypassing intermediaries. In our view,
allow for differentiated pricing floors for various this will result in insurers strengthening their
regions in the country. This follow on a liberalized efforts to establish strong tele-marketing and
pricing framework that was first implemented online sales channels.
in June 2015, and a year later applied to all
regions in China. Besides motor insurance pricing reforms, the P&C
sector is also hampered by slower new car sales,
Since the debut of motor insurance pricing and slower GDP growth. As such, this sector has
reforms, drivers with good driving records can also been hit hard by price wars.
enjoy more favorable premiums through the
application of a wider range of no claims discounts.
A number of large P&C players have already
Technology Will Disrupt, But Also Help
established various techniques to support more China is already a leader in digital technologies
efficient underwriting and claim-handling, and that allow customers to execute a range of
develop risk-classification models. financial services online or even on their mobile
phones. As a result, the pool of data on financial
We believe the small and midsize P&C insurers are customers is ever expanding. Chinese insurers
less prepared to adjust to these regulatory-led can use this data to improve customer services,
market changes. However, the higher discount enhance cross-selling, pinpoint marketing efforts,
factor permitted by CIRC for direct distribution and better understand the needs for policyholders.
channels (i.e. insurers can offer lower-premium
Chart 2: Average Profitability Of 12 Leading Property & Casualty Insurers
Net expense ratio Net loss ratio Net Investment yield* Return on equity
(left scale) (left scale) (right scale) (right scale)
(%)
120 25
100
20
80
15
60
10
40
5
20
0 0
2013 2014 2015 2016
*Net investment yield calculation includes realized gains/losses, share of profits of affiliates, and
excludes unrealized gains/losses.
Source: Company Information, S&P Global Ratings' calculations.
China’s Insurers Turn To Big Data And Digital Techonology For Competitive Edge 11China's Top 25 Insurers
TABLE 1: Business And Financial Profiles Of China's Top 25 Insurers
Business Profile
Financial
Profile Below Average Average Above Average
Above Average
Sinosafe General Insurance Co. Ltd. China Life Insurance Co. Ltd.
Huatai Property & Casualty Insurance Co. Ltd. China Pacific Life Insurance Co. Ltd.
AXA Tianping Property & Casualty Insurance Co. Ltd. Ping An Life Insurance Co. of China Ltd.
China Reinsurance (Group) Corp.
Average
Yingda Taihe Property Insurance Co. Ltd. New China Life Insurance Co. Ltd. PICC Property & Casualty Insurance Co. Ltd.
Taiping Life Insurance Co. Ltd. Ping An P&C Insurance Co. of China Ltd.
China Pacific Property Insurance Co. Ltd.
Below Average
Anbang Life Insurance Co. Ltd. ABC Life Insurance Co. Ltd. Taikang Insurance Group Inc.
Huaxia Life Insurance Co. Ltd. ICBC AXA Assurance Co. Ltd.
BOC Insurance Co. Ltd. PICC Life Insurance Co. Ltd.
Sunshine Life Insurance Corp. Ltd.
China Life Property & Casualty Insurnace Co. Ltd.
China United Property Insurance Co. Ltd.
Sunshine Property & Casualty Insurance Co. Ltd.
Taiping General Insurance Co. Ltd.
Key:
Life Insurers
P&C Insurers
Reinsurer
12 China’s Insurers Turn To Big Data And Digital Techonology For Competitive EdgeChina's Top 25 Insurers
Moreover, having greater data sets at hand could The rapid expansion of some insurance companies
enable insurers to design customized products and in 2014-2016 is unlikely to repeat itself. Instead, a
break away from homogenous product offerings. more sustainable growth model that focuses on
One reason for price wars in the sector is that insurance protection products will likely emerge.
insurers are all pushing similar products, and as In our view, insurance companies will resume their
such can often only undercut the competition on focus on underwriting and cut back on speculative
price alone. Meanwhile, regulatory costs are on investments, while more prudently managing
the rise, and slowing economic growth will limit their regulatory solvency positions. The need to
investment opportunities. If deployed and adapted strengthen risk management and compliance will
properly, technology could help offset some of hike up operational costs, however, and once again
these pressures. this burden will fall more heavily on small and
mid-size insurance companies. This is because the
Over time, big data might be able to help insurers larger players already have more standardized risk
cut out middle men and get straight to the management frameworks in place.
customers, offsetting rising cost pressures. This
could particularly help smaller players that often However, hope is not all lost for the mid-tier
pay high distribution fees. That said, the biggest insurers. Speedier product customization, coupled
insurers have invested more in technology and may with precise or targeted geographic outreach,
thus have an advantage. Many of them already should allow mid-tier insurers to stay relevant
have a head start, and are operating various within China's under-penetrated insurance
well-established internet and WeChat platforms industry. The country's increasingly affluent
to support their insurance policy sales and claim population will provide an abundance of growth
handling process. opportunities for the still young insurance industry.
Only a rating committee may determine a rating action and this
Hope Remains For Mid-Size Insurers report does not constitute a rating action.
China has been getting tougher over rising risks
in the financial system, largely in response to a
spurt of risky investments by insurers with fast-
growing balance sheets. After a number of reforms
announced by CIRC this year, we expect market
discipline to improve and risk measures to tighten.
China’s Insurers Turn To Big Data And Digital Techonology For Competitive Edge 13China’s Top 25 Insurers
China Life Insurance Co. Ltd.
Eunice Tan, Hong Kong (852) 2533-3553; eunice.tan@spglobal.com
Judy Chen, Hong Kong (852) 2532-8059; judy.chen@spglobal.com
Mark Li, Hong Kong (852) 2533-3585; mark.li@spglobal.com
Business Profile: Above Average Chart 1: Gross Written Premium
-- Leading life insurer in China with extensive (Mil. RMB)
500,000 Regular premium (in-force)
geographic coverage 450,000
Regular premium (New)
400,000
-- Well-established brand in China supported by a strong 350,000 Single premium
300,000 Policyholder's investment fund
distribution network 250,000
200,000
-- Reduced market share due to sales initiatives on longer– 150,000
term, regular premium, protection-type products 100,000
50,000
0
2012 2013 2014 2015 2016
Financial Profile: Above Average
Chart 2: Investment Assets*
-- Demonstrated access to equity and debt capital markets
(Mil. RMB)
for funding requirements 3,000,000 Cash and short-term investments
Common stock
-- Strained capital and earnings profile, though moderated by 2,500,000
Preference stock
increasing sales of higher margin products 2,000,000
Bonds
1,500,000 Investment funds
-- Heightening exposure to credit and market risks due to 1,000,000 Loans
increasingly aggressive investment appetite Real estate
500,000
Investments in affiliates
0
Other Factors: 2012 2013 2014 2015 2016
Other investments
*Investment assets classification is based on annual report.
-- Core subsidiary of China Life Insurance (Group) Co. (CLG)
Chart 3: Profitability Metrics
-- Very high likelihood of extraordinary support from the 14% Return on assets*
Chinese government through CLG 12% Return on equity
Net investment yield§
10%
Major Shareholders 8%
6%
China Life Insurance (Group) Co. Ltd. 68.37%
4%
HKSCC Nominees Ltd. 25.88% 2%
0%
China Securities Finance Co. Ltd. 2.02% 2013 2014 2015 2016
*Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Central Huijin Asset Management Co. Ltd. 0.42%
Chart 4: C-ROSS Comprehensive Solvency Ratio
Background Information (Mil. RMB)
400,000 400% RBC: Insurance risk (left scale)
Type Life insurer 350,000 350% RBC: Market risk (left scale)
300,000 300%
Established 2003 250,000 250%
RBC: Credit risk (left scale)
Comprehensive solvency ratio
200,000 200%
Head office location Beijing (right scale)
150,000 150%
Top life average solvency*
Registered capital (mil. RMB) 28,265 100,000 100% (right scale)
50,000 50%
2017 1H Ranking by direct premium #1 0 0%
2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2
2017 1H Ranking by total policy written* #1 *Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
figures calculation excludes solvency status of Anbang Life due to information unavailability.
C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
S&P Global Ratings A+/Watch Neg
RMB—Renminbi.
*Total policy written includes direct premium and policyholder Sources: Company information
CIRC—China Insurance Regulatory Commission,
investment funds, excludes premium from unit-linked products S&P Global Ratings' calculation.
14 China’s Top Life InsurersChina’s Top 25 Insurers
Ping An Life Insurance
Co. of China Ltd.
Eunice Tan, Hong Kong (852) 2533-3553; eunice.tan@spglobal.com
Serene Hsieh, Taipei (886) 2 8722-5820; serene.hsieh@spglobal.com
Business Profile: Above Average Chart 1: Gross Written Premium
-- Second-largest life insurer with diverse franchise in China (Mil. RMB)
300,000 Total premium
-- A high level of control on effective distribution channel with 250,000 Regular premium (in-force)
well-recognized brand strength 200,000
Regular premium (New)
Single premium
-- Sound operating performance supported by its strong 150,000 Policyholder's investment fund
focus on sales of high margin products and satisfactory 100,000
agency productivity 50,000
0
2012* 2013* 2014* 2015 2016
Financial Profile: Above Average *2012-2014 breakdown by payment types is unavailable for Ping An Life.
-- Demonstrated access to offshore debt capital markets Chart 2: Investment Assets*
(Mil. RMB)
-- Average capitalization supported by strong earnings and 2,000,000 Cash and short-term
investments
value generation, though moderated by high dividend 1,800,000 Common stock
payout to group 1,600,000 Bonds
1,400,000 Investment funds
-- Heightening sensitivity to market volatility due to increasing 1,200,000 Loans
exposure to high risk assets 1,000,000 Real estate
800,000 Investments in affiliates
600,000
Other Factors: 400,000
Other investments
200,000
-- Integral role for the wider Ping An Group’s strategy to
0
develop into a financial services conglomerate 2012 2013 2014 2015 2016
*Investment assets classification is based on annual report.
-- Potential capital drain to support sister Chart 3: Profitability Metrics
company Ping An Bank 30% Return on assets*
Return on equity
25%
Net investment yield§
Major Shareholder 20%
15%
Ping An Insurance (Group) Co. of China Ltd. 99.51%
10%
5%
Background Information
0%
2013 2014 2015 2016
Type Life insurer *Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Established 2002
Chart 4: C-ROSS Comprehensive Solvency Ratio
Head office location Shenzhen
(Mil. RMB)
450,000
Registered capital (mil. RMB) 33,800 300% RBC: Insurance risk (left scale)
400,000
250% RBC: Market risk (left scale)
350,000
2017 1H Ranking by direct premium #2 RBC: Credit risk (left scale)
300,000 200%
2017 1H Ranking by total policy written* #2 250,000 150%
Comprehensive solvency ratio
200,000 (right scale)
100%
S&P Global Ratings Unrated 150,000 Top life average solvency*
100,000 (right scale)
50%
50,000
*Total policy written includes direct premium and policyholder 0 0%
2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2
investment funds, excludes premium from unit-linked products.
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
figures calculation excludes solvency status of Anbang Life due to information unavailability.
C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
RMB—Renminbi.
Sources: Company information
CIRC—China Insurance Regulatory Commission,
China’s Top Life Insurers S&P Global Ratings' calculation. 15China’s Top 25 Insurers
Anbang Life Insurance Co. Ltd.
Wenwen Chen, Hong Kong (852) 2533-3559; wenwen.chen@spglobal.com
Patty Wang, Taipei (886) 2 8722-5823; patty.wang@spglobal.com
Chart 1: Gross Written Premium
Business Profile: Below Average
(Mil. RMB)
-- Aggressive business growth driven by sale of short to 220000 P&C premium*
medium term products previously, though recent regulatory 200000
180000 Regular premium (in-force)
restriction had resulted in a slowdown in such product sales 160000 Regular premium (New)
140000
Single premium
120000
-- Uncertain future growth and profitability given tightening 100000 Policyholder's investment fund
regulatory purview and brand deterioration 80000
60000
40000
-- Limited control over distribution channels due to reliance 20000
on non-exclusive bancassurance channels 0
2012 2013 2014 2015 2016
*Property & casualty (P&C) premium due to consolidation of P&C business in 2015.
Financial Profile: Below Average Chart 2: Investment Assets*
-- Thin regulatory solvency buffer due to aggressive growth of (Mil. RMB)
Cash and short-term
1,400,000
thin-margin short-term products investments
1,200,000 Common stock
-- High financial leverage reflective of significant reliance on 1,000,000
Bonds
Investment funds
debt financing 800,000 Loans
-- Strain on liquidity due to pending hike in policy surrender 600,000
Real estate
Investments in affiliates
and limitation of new product offering 400,000 Other investments
-- Reduced investment concentration in financial sector 200,000
following divestment of major banks’ stocks 0
2012 2013 2014 2015 2016
*Investment assets classification is based on annual report.
-- Manageable foreign exchange exposure given natural hedge
Chart 3: Profitability Metrics
of overseas assets and liabilities
40% Return on assets*
35% Return on equity
Other Factors: 30%
Net investment yield§
25%
-- Potential group support from Anbang Insurance Group 20%
15%
Major Shareholder 10%
5%
Anbang Insurance Group 100.00% 0%
-5%
2013 2014 2015 2016
Background Information *Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Type Life insurer Chart 4: C-ROSS Comprehensive Solvency Ratio
Established 2010 (Mil. RMB)
70,000 350% RBC: Insurance risk (left scale)
Head office location Beijing
60,000 300% RBC: Market risk (left scale)
Registered capital (mil. RMB) 30,790 50,000 250% RBC: Credit risk (left scale)
40,000 200% Comprehensive solvency ratio
2017 1H Ranking by direct premium #3 150% (right scale)
30,000
Top life average solvency*
2017 1H Ranking by total policy written* #3 20,000 100%
(right scale)
10,000 50%
S&P Global Ratings Unrated 0 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 0%
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
*Total policy written includes direct premium and policyholder figures calculation excludes solvency status of Anbang Life due to information unavailability.
investment funds, excludes premium from unit-linked products. C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
RMB—Renminbi.
Sources: Company information
16 CIRC—China Insurance Regulatory Commission, China’s Top Life Insurers
S&P Global Ratings' calculation.China’s Top 25 Insurers
China Pacific Life
Insurance Co. Ltd.
Wenwen Chen, Hong Kong (852) 2533-3559; wenwen.chen@spglobal.com
Eunice Tan, Hong Kong (852) 2533-3553; eunice.tan@spglobal.com
Business Profile: Above Average Chart 1: Gross Written Premium
-- Solid competitive position as one of the top-four life (Mil. RMB)
160,000 Regular premium (in-force)
insurers, supported by leading market position and 140,000 Regular premium (New)
extensive geographic coverage in China 120,000 Single premium
100,000 Policyholder's investment fund
-- Increasing focus on long-term sustainable growth, backed 80,000
by growing agency force 60,000
40,000
-- Sound operating performance supported by strong new 20,000
business margin growth and good expense control 0
2012 2013 2014 2015 2016
Financial Profile: Above Average Chart 2: Investment Assets*
(Mil. RMB)
-- Above-average capitalization level despite rising sensitivity 900,000 Cash and short-term
investments
to credit and market risks 800,000 Common stock
700,000 Preference stock
-- Heightening exposure to risky assets including equity and 600,000
Bonds
alternative investments 500,000
Investment funds
400,000
Loans
-- Demonstrated access to onshore equity and debt capital 300,000
Real estate
markets for funding requirements 200,000
Other investments
100,000
0
Other Factors: 2012 2013 2014 2015
*Investment assets classification is based on annual report.
2016
-- Potential group support from China Pacific Insurance
Chart 3: Profitability Metrics
(Group) Co. Ltd.
20% Return on assets*
Return on equity
Major Shareholder 15% Net investment yield§
China Pacific Insurance (Group) Co. Ltd. 98.29% 10%
5%
Background Information
Type Life insurer 0%
2013 2014 2015 2016
*Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
Established 2001 gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Head office location Shanghai Chart 4: C-ROSS Comprehensive Solvency Ratio
(Mil. RMB)
Registered capital (mil. RMB) 8,420
160,000 300% RBC: Insurance risk (left scale)
2017 1H Ranking by direct premium #4 140,000
250% RBC: Market risk (left scale)
120,000
RBC: Credit risk (left scale)
2017 1H Ranking by total policy* #4 100,000
200%
Comprehensive solvency ratio
80,000 150%
S&P Global Ratings Unrated (right scale)
60,000 100% Top life average solvency*
40,000 (right scale)
50%
*Total policy includes direct premium and policyholder investment 20,000
0 0%
funds, excludes premium from unit-linked products. 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
figures calculation excludes solvency status of Anbang Life due to information unavailability.
C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
RMB—Renminbi.
Sources: Company information
CIRC—China Insurance Regulatory Commission,
S&P Global Ratings' calculation.
China’s Top Life Insurers 17China’s Top 25 Insurers
PICC Life Insurance Co. Ltd.
Mark Li, Hong Kong (852) 2533-3585; mark.li@spglobal.com
Charles Wang, Hong Kong (852) 2533-3505; charles.wang@spglobal.com
Business Profile: Average Chart 1: Gross Written Premium
-- Benefit of the PICC Group’s strong brand (Mil. RMB)
120,000 Regular premium (in-force)
-- Potential operating performance volatility following 100,000
Regular premium (New)
restructuring of business to focus on regular premium Single premium
80,000
Policyholder's investment fund
-- Heavy usage of bancassurance channel, which limits 60,000
effective control over quality of business 40,000
Financial Profile: Below Average 20,000
0
2012 2013 2014 2015 2016
-- Below-average capital position due to relatively
small capital base Chart 2: Investment Assets*
(Mil. RMB)
-- Significant investment risk sensitivity, owing to concentrated 400,000 Cash and short-term
investments
exposure to Industrial Bank Co. Ltd. and high exposure to 350,000 Common stock
risky assets including equity and alternative investments 300,000 Preference stock
250,000 Bonds
-- Ample sources of external capital and liquidity, benefiting Investment funds
200,000
from both group’s listed status and track record of capital Loans
150,000
injection from parent Real estate
100,000
Investments in affiliates
Other Factors: 50,000
0
Other investments
2012 2013 2014 2015 2016
-- Potential group support from The People’s Insurance Company *Investment assets classification is based on annual report.
(Group) of China Ltd., though small profit contribution
Chart 3: Profitability Metrics
12% Return on assets*
Major Shareholders 10% Return on equity
Net investment yield§
The People’s Insurance Company (Group) of China Ltd. 71.08% 8%
6%
Sumitomo Life Insurance Co. 10.00%
4%
PICC Property and Casualty Co. Ltd. 8.62% 2%
0%
Asia Financial Holdings Ltd. 5.00%
-2%
2013 2014 2015 2016
Bangkok Bank Public Co. Ltd. 5.00% *Return on assets calculation excludes investment gains/losses. §Net investment yield calculation
includes realized gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Background Information Chart 4: C-ROSS Comprehensive Solvency Ratio
(Mil. RMB)
Type Life insurer 45,000 300% RBC: Insurance risk (left scale)
40,000
250%
Established 2005 35,000
RBC: Market risk (left scale)
30,000 200% RBC: Credit risk (left scale)
Head office location Shanghai 25,000 Comprehensive solvency ratio
150%
20,000 (right scale)
Registered capital (mil. RMB) 25,761 15,000 100% Top life average solvency*
10,000 (right scale)
50%
2017 1H Ranking by direct premium #5 5,000
0 0%
2017 1H Ranking by total policy written* #6 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
figures calculation excludes solvency status of Anbang Life due to information unavailability.
S&P Global Ratings Unrated C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
RMB—Renminbi.
*Total policy written includes direct premium and policyholder Sources: Company information
investment funds, excludes premium from unit-linked products. CIRC—China Insurance Regulatory Commission,
S&P Global Ratings' calculation.
18 China’s Top Life InsurersChina’s Top 25 Insurers
Taiping Life Insurance Co. Ltd.
Wenwen Chen, Hong Kong (852) 2533-3559; wenwen.chen@spglobal.com
Eunice Tan, Hong Kong (852) 2533-3553; eunice.tan@spglobal.com
Business Profile: Average Chart 1: Gross Written Premium
-- Benefit from parent group China Taiping Insurance (Mil. RMB)
100,000
Holdings Co. Ltd (CTIH)’s brand and reputation as a 90,000
Regular premium (in-force)
Regular premium (New)
government-related entity 80,000
Single premium
70,000
-- Average but growing presence among Chinese domestic 60,000 Policyholder's investment fund
50,000
life insurance companies, supported by focus on regular 40,000
premium products 30,000
20,000
-- Strengthening, though average, profitability, reflective of 10,000
0
improving expense ratio and increased contribution from 2012 2013 2014 2015 2016
high margin products Chart 2: Investment Assets*
(Mil. RMB)
Financial Profile: Average 350,000 Cash and short-term
investments
-- Average capital position due to fast-growth insurance 300,000 Common stock
Preference stock
strategy and deleveraging initiatives 250,000
Bonds
200,000
-- Expansion of financial leasing subsidiary, which may Investment funds
150,000 Loans
introduce volatility in earnings and require capital support Real estate
due to start-up phase 100,000
Investments in affiliates
50,000
Other investments
-- Increasing exposure to risky assets to maintain strong 0
investment performance, which widens its sensitivity to 2012 2013 2014 2015 2016
*Investment assets classification is based on annual report.
market and credit risks
Chart 3: Profitability Metrics
Other Factors: 25% Return on assets*
Return on equity
20%
-- Integral position within CTIH group given dominant capital Net investment yield§
and profit contribution 15%
10%
-- Potential operational and financial support from joint-
venture partner Ageas Group 5%
0%
2013 2014 2015 2016
Major Shareholders *Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
China Taiping Insurance Holdings Co. Ltd. 75.10%
Ageas Insurance International N.V. 12.45% Chart 4: C-ROSS Comprehensive Solvency Ratio
(Mil. RMB)
Cubemax Prime International Investment Ltd. 12.45% 80,000 300% RBC: Insurance risk (left scale)
70,000
Background Information 60,000
250% RBC: Market risk (left scale)
200% RBC: Credit risk (left scale)
Type Life insurer 50,000
Comprehensive solvency ratio
40,000 150%
Established 1984 (right scale)
30,000 100% Top life average solvency*
Head office location Shanghai 20,000 (right scale)
50%
Registered capital (mil. RMB) 10,300 10,000
0 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 0%
2017 1H Ranking by direct premium #6
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average
2017 1H Ranking by total policy written* #9 figures calculation excludes solvency status of Anbang Life due to information unavailability.
C-ROSS: China-Risk Oriented Solvency System. RBC: Risk Based Capital.
S&P Global Ratings Unrated
RMB—Renminbi.
*Total policy written includes direct premium and policyholder Sources: Company information
investment funds, excludes premium from unit-linked products. CIRC—China Insurance Regulatory Commission,
S&P Global Ratings' calculation.
China’s Top Life Insurers 19China’s Top 25 Insurers
Taikang Insurance Group Inc.
(previously known as Taikang Life Insurance Co. Ltd.)
Mark Li, Hong Kong (852) 2533-3585; mark.li@spglobal.com
Charles Wang, Hong Kong (852) 2533-3505; charles.wang@spglobal.com
Business Profile: Above Average Chart 1: Gross Written Premium
-- Above-average profitability, reflective of strong (Mil. RMB)
120,000
Regular premium (in-force)
investment performance
100,000 Regular premium (New)
-- Good brand recognition and market position in the 80,000
Single premium
Chinese life insurance market 60,000
Policyholder's investment fund
-- Strengthening control over distribution channel through 40,000
development of agency force, telemarketing, and online 20,000
sales channels 0
2012 2013 2014 2015 2016
Financial Profile: Below Average Chart 2: Investment Assets*
(Mil. RMB)
-- Above-average reliance on subordinated debt to support 600,000
Consolidated portion
regulatory capital Cash and short-term investments
500,000
-- Extensive usage of repurchase agreement (repo) relative to 400,000
Loans
Real estate
absolute capital size
300,000 Investments in affiliates
-- Rising exposure to retirement home projects and real 200,000
estate, which may weaken its liquidity position 100,000
0
Major Shareholders 2012 2013 2014 2015 2016
*Investment assets classification is based on annual report.
Guardian Investment Holdings Ltd. 23.8%
Chart 3: Profitability Metrics
The Goldman Sachs Group, Inc. 12.6%
35% Return on assets*
Tetrad Ventures Pte Ltd. 11.4% 30% Return on equity
Net investment yield§
25%
Beijing Wuhong Union Investment Co. Ltd. 11.0%
20%
15%
10%
Background Information 5%
Type Life insurer 0%
2013 2014 2015 2016
*Calculation excludes investment gains/losses. §Net investment yield calculation includes realized
Established 2016 gain/(loss), share of profits of affiliates, and excludes unrealized gain/(loss).
Head office location Beijing Chart 4: C-ROSS Comprehensive Solvency Ratio
(Mil. RMB)
Registered capital (mil. RMB) 3,000
100,000 350%
RBC: Insurance risk (left scale)
90,000
2017 1H Ranking by direct premium #7 80,000
300%
RBC: Market risk (left scale)
70,000 250%
RBC: Credit risk (left scale)
2017 1H Ranking by total policy written* #7 60,000 200%
50,000 Comprehensive solvency ratio
S&P Global Ratings Unrated 40,000 150% (right scale)
30,000 100% Top life average solvency*
20,000 (right scale)
*Total policy written includes direct premium and policyholder 10,000
50%
investment funds, excludes premium from unit-linked products. 0
2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2
0%
*Top life average solvency calculation includes the 12 Life insurers covered in this publication; 2017Q2 average figures
calculation excludes solvency status of Anbang Life due to information unavailability. C-ROSS: China-Risk Oriented Solvency
System. RBC: Risk Based Capital.
RMB—Renminbi.
Sources: Company information
CIRC—China Insurance Regulatory Commission,
S&P Global Ratings' calculation.
20 China’s Top Life InsurersYou can also read
