China Post Life plans to raise 7.1 billion in public funds. Is this the plan to become the industry leader?

On April 26, 2021, China Post Life Insurance announced in the Capital Increase Project Center of Shanghai United Equity Exchange that it planned to add 1 investor. The total amount of funds raised and the price of the planned capital increase will be determined based on market conditions. The shareholding ratio is 24.99%, and the registered capital has increased by 7.162 billion yuan. China Post Life said the funds raised will be used to replenish capital and will not invest in consortia or contracted private equity funds, asset management plans or trust plans. According to the information disclosure requirements, the corporate legal person established by the purpose investor of China Post Life Insurance is legally established and effectively exists within the territory of the People's Republic of China or an overseas financial institution.

Relying on the Postal Group and starting from bank insurance channels and participating insurance, Nayou Life Insurance Co., Ltd. has accelerated the pace of adjustment, optimized the payment structure and term structure of the underwriting business, and developed the guarantee business. At the end of last year, its general manager resigned due to personal reasons, and then began market recruitment. The general manager has not yet decided. With capital increase to pave the way for the pilot battle, new shareholders and new helmsman, China Post will still usher in a critical moment of transformation and development. According to public information, China Post Life Insurance Co., Ltd. was established in August 2009 and is a life insurance company under the Postal Group. Currently it holds 50.92% of the shares of China Post Group Co., Ltd., 20.00% of the shares of Beijing China Post Asset Management Co., Ltd., 16.25% of the shares of China Philatelic Co., Ltd., and 12.83% of the shares of the Postal Research and Planning Institute Co., Ltd.

Further analysis shows that among China Post’s life insurance business, the bonus insurance savings business with a warranty period of 5-6 years accounts for the highest proportion, while the scale of traditional life insurance, health insurance and accident insurance are relatively small. Low. Taking 2019 as an example, public data shows that China Post Life’s dividend and mutual insurance premium income was 60.8 billion yuan, accounting for 90.02% of its business. Due to fierce market competition and short guarantee period, the main profit of this type of business comes from the gap between the actual investment income and the investment income required for liabilities.

China Post Life Insurance Co., Ltd.’s rolling plan (2019-2021) mentions in the plan that by 2021, it will achieve comprehensive transformation and development goals and complete guidance work, business scale, efficiency level, and service capabilities. and brand value, the comprehensive strength of the company has taken a major step towards the top five in the industry, and the new growth pole position has been firmly established as a shareholder group. From an industry perspective, to achieve the goal of hitting the top five in the industry, Postal Life Insurance needs to comprehensively improve its basic capabilities, comprehensively strengthen the development of high-quality foundations, and use the basic management of the entire industry chain of Shougang Life Insurance Company to strengthen product design and sales. The continuous improvement of capabilities in operations, operations, investment, and technological support has continued to reverse the fundamental mismatch between management and corporate development.