Text / Hong Lingxiang
According to the “Financial News” report, it was only two years ago that Shin Kong Gold was listed because it invested too much in lower-rated bonds and high-volatility stock targets, resulting in an unrealized loss of more than 30 billion yuan in financial assets, resulting in a low net worth. FCA watch list. Not far from Yin Jian, Sanshang Smith Barney Life Insurance is still following in the footsteps.
Since the beginning of this year, due to the active interest rate hike by the US Federal Reserve, the stock and bond market has collapsed once more, and the overall net worth of life insurance companies has shrunk by 500 billion yuan in the first quarter. above the level. Only the seventh largest life insurance company, American Life Insurance, not only made only 1.09 billion yuan last year, but also reported an following-tax loss of 3.32 billion yuan in the first quarter of this year and a net loss of 1.22 yuan per share, the largest loss since its establishment.
The chairman was absent for a month without a letter
The Caixun report pointed out that it is widely rumored in the market that the loss was caused by Weng Cuijun, vice chairman of Sanshang Life, and Lin Dajun, chief investment officer, who made mistakes in their investment decisions and placed heavy bets on Yuanta Taiwan 50 to 1, Russian bonds and other targets. In this regard, Sanshang Meibang Life Insurance stated that the company’s stock operations are operated by investment units in accordance with professional and market conditions, and comply with relevant norms.
At the end of last year, the capital adequacy ratio (RBC) of Sanshang Life was only 203.62% and the net worth ratio was 3.28%, which was close to the critical point that the Financial Regulatory Commission required RBC to be 200% and net worth ratio of more than 3%; the net worth of Sanshang Life was sharpened once more in the first quarter of this year. Reduced to 39.6 billion yuan, the estimated net worth ratio has fallen below the supervision red line, leaving only 2.75%; compared with the insurance debt as high as 1.22 trillion yuan on the balance sheet, the solvency is a concern.
What is even more worrying is that, in order to complete the official integration of International Accounting Standards Bulletin 17 (IFRS 17) in 2026, according to the “Financial News” report, starting next year, the insurance industry will complete the construction of liability-related calculation models and systems. In 2024, parallel testing of the system will be completed to meet the scheduled time.
However, Chen Xiangjie, chairman of Sanshangshou, and Weng Cuijun, vice chairman of the board, both resigned without warning on the eve of the announcement of the loss. The decision-making executives were suddenly in a vacuum. Sanshang Shou said that the major shareholder is only resigning, not appearing, in order to allow the company to practice the goal of all-manager management.
So who will be the chairman of Sanshangshou in the future? There is no following so far, but the new chairman has a great responsibility, not only to understand the operation of insurance, but also to be able to enter the market with funds as soon as possible.
According to the analysis of Caixun, the major shareholders of Sanshangshou are the Chen Hedong and Weng Zhaoxi families who founded Sanshangshou. Although the business territory includes catering (Sanshang Qiaofu), retail (Lianshe), finance (Sanshang Meibang, Fuhua Investment Trust), pharmaceutical (Xufu), etc., it is necessary to support the capital increase of the life insurance industry, which can cost tens of billions of yuan at every turn. Still struggling.
Major shareholders are hard to look forward to new funds
“Financial News” reported that at the beginning of this year, Sanshang Shou had just handled the ninth capital increase in 10 years. Although it was claimed to be the largest current increase in 20 years, the scale was only 3.526 billion yuan, and some real estate had to be sold in the second half of the year. Floors are monetized to replenish capital, but this is only a drop in the bucket for the capital increase required to comply with IFRS 17.
Coincidentally, this year, Shin Kong Gold, which has stepped on the Russian debt and the high-level trapped in insider trading of Yuanfu Securities, has just passed the establishment of a “merger research task force”. The target of the merger was originally targeted at brother Wu Dongliang, but now it is no longer necessary for Taishin Gold. It is rare to be so eager to sell oneself, and it is obvious that the existing executives are not sure that they will be able to operate the future life insurance industry.
But the market is often following the dust has settled before someone enters the market to pick up bargains. After the financial tsunami in 2008, many foreign-funded life insurance companies were unable to afford investment failures and long-term losses, so they sought to sell them. At the end of 2008, Fubon Gold didn’t pay a cent in cash, so they exchanged second-ranked corporate bonds equivalent to US$600 million. ING Antai Life Insurance; China Life Insurance also bought Prudential Life’s Taiwan business and Allianz Life’s traditional insurance policies for NT$1. Now that Sanshangshou and Shin Kong Gold are using different attitudes to attract relatives, how will the market evaluate them? It is worth continuing to observe.
Further reading:
Chen Hongsheng, Chairman of Sanshang Meibang, Vice Chairman and General Manager of Shuangci
