Li Wenfeng took charge of New China Retirement in March and became the new party secretary of the company. New China Retirement had a net loss of 1.3 billion yuan in the first quarter, with an investment return rate ranking behind in the industry. Under the wind of the individual pension system, how will New China Retirement differentiate and innovate in the future?
Finance Associated Press, July 18th (Reporter Xia Shuyuan) New China Life Insurance Co., Ltd. (hereinafter referred to as "New China Retirement") has a new chairman. According to the company's latest announcement, the China Banking and Insurance Regulatory Commission has approved Li Wenfeng's qualifications as the chairman of the company, and Li Wenfeng has served as the chairman of the company since July 12, 2024.
According to the data, in the first quarter of 2024, New China Retirement had a net loss of 1.3 billion yuan, and the net return on assets and the total return on assets were both negative. The investment return rate and the comprehensive investment return rate were 0.57% and 0.61%, respectively, ranking behind in the life insurance industry. With the inauguration of the new chairman, New China Retirement's good professional advantages in the pension insurance company, exploration of innovative pension insurance products and services models, are worthy of expectation.
Li Wenfeng approved as the chairman of New China Retirement.
Li Wenfeng has taken charge of New China Retirement since March this year and became the new party secretary of the company.
Public information shows that Li Wenfeng was born in 1981, obtained a Master of Economics from Northeast University of Finance and Economics in June 2008, has the qualification of a certified public accountant, and has worked for the Ji'nan Special Audit Office of the National Audit Office, and the Information and Postal Audit Bureau of the National Audit Office. From September 2009 to December 2023, Li Wenfeng served as the senior deputy manager of the party committee office of CITIC, the senior deputy manager of the insurance institution management department of Central Huijin, and once served as the deputy director of Chaoyang Garden Management Committee of Zhongguancun Science and Technology Park. From August 2023 to May 2024, Li Wenfeng concurrently served as a director of China Reinsurance Group. Since February 2024, Li Wenfeng has been the assistant president of New China Insurance.
According to sources, the former chairman of New China Retirement was Li Quan. In March 2020, Li Quan became the chairman of New China Retirement and the chairman of New China Insurance in April 2023.
On July 25, 2023, China Life Insurance announced that the Board approved the proposal regarding the candidates for the chairman of New China Retirement, and agreed to recommend Zhang Hong as the candidate for the chairman of New China Retirement. Li Quan no longer serves as the chairman of New China Retirement.
It is worth noting that Zhang Hong's qualifications have not yet been approved by the regulatory authorities. In April of this year, Li Quan, the former chairman of New China Insurance, was reported missing.
Insiders said that since 2020, New China Retirement's daily management has mainly been responsible for by President Yuan Chaojun, and the company's business mainly revolves around insurance and pension business.
New China Retirement was established in September 2016. It is a national joint-stock professional pension insurance company jointly established by New China Insurance and New China Asset Management, with a registered capital of 5 billion yuan.
In the first quarter, New China Retirement had negative net return on assets and total return on assets.
Established nearly 8 years ago, New China Retirement Insurance currently only has branches in Beijing, Shenzhen and Hubei. As of the end of 2023, New China Retirement manages a total of 32 billion yuan in assets and has two pension protection management products and ten pension products.
In the past three years, New China Retirement's revenue and net profit have shown some fluctuations. In 2020, 2021, and 2023, New China Retirement achieved operating income of 0.282 billion yuan, 0.149 billion yuan, and 0.177 billion yuan, respectively, with corresponding net profits of 0.07 billion yuan, -0.008 billion yuan, and 0.008 billion yuan. In the first quarter of 2024, New China Retirement's insurance business revenue was 0.626 million yuan, and the net loss was 1.3 billion yuan.
Insiders analyze that, in addition to the impact of the transformation, the investment return rate and net profit indicators of insurance companies are also closely related. After stripping off the asset management and personal pension businesses that previously accounted for a high proportion of the pension insurance company and were profitable, the business structure of the pension insurance company will undergo tremendous changes, and the company's revenue and net profit will also be affected to varying degrees.
In the first quarter of 2024, the insurance business income of New China Retirement was 0.626 million yuan, and the net loss was 1.3 billion yuan.
In addition to the impact of transformation, the investment return rate and net profit indicators of insurance companies are also closely related. After stripping off the asset management and personal pension businesses that previously accounted for a high proportion of the pension insurance company and were profitable, the business structure of the pension insurance company will undergo tremendous changes, and the company's revenue and net profit will also be affected to varying degrees.
According to the solvency report, in the first quarter of 2024, the net asset return rate and total asset return rate of Xinhua Retirement were -0.24% and -0.17%, respectively, both negative. The investment yield and comprehensive investment yield are 0.57% and 0.61%, respectively, ranking relatively low among personal insurance companies.
How to seize the annuity market in the future?
In recent years, retirement insurance companies have ushered in a wave of significant business adjustments under new regulatory policies.
Since 2021, regulatory authorities have reshaped the development positioning and business structure of retirement insurance companies, guiding them to return to their core business of retirement and focus on the development and innovation of long-term retirement financial products.
On January 16, 2024, the Insurance Bureau of the China Banking and Insurance Regulatory Commission issued a document stating that in accordance with the "Interim Measures for the Supervision and Administration of Retirement Insurance Companies", it will promote the reconstruction of the positioning of retirement insurance companies, the return of main business, orderly promote business structure adjustments, and achieve smooth organizational and team transitions.
In fact, Xinhua Retirement also has a certain focus on business transformation.
At the annual management work conference held at the beginning of the year, Xinhua Retirement President Yuan Chaojun stated that in 2024, Xinhua Retirement's management work will focus on the responsibility of the main business, expand and strengthen the development of enterprise pension, enrich the supply of three-pillar long-term retirement products, and investment lines will be operated and management closed according to regulations.
Recently, at the mid-year work conference, Xinhua Retirement President Yuan Chaojun emphasized that the annuity business is one of Xinhua Retirement's important revenue channels, and in the second half of the year, they will focus on achieving high-quality development of the annuity business through work such as team building, increment improvement, and institutional development.
According to Long Ge, deputy director of the Center for Innovation and Risk Management Research at the University of International Business and Economics, retirement insurance companies are currently mainly making business adjustments in two areas: first, developing the enterprise pension and occupational pension businesses of the second pillar; second, deepening the third pillar of retirement insurance, such as developing commercial pension business, individual pension business, innovative development of commercial retirement insurance products, and supporting diversified health and wellness services, etc.
"According to Zhou Jin, a partner in the financial management consulting department of PwC China, the transformation of retirement insurance companies should be determined based on the company's own conditions. Both operating pension businesses and insurance businesses have their own advantages and disadvantages.
"Now the development of annuity business has reached a bottleneck period dominated by stock maintenance, and it is unlikely to have significant breakthroughs in the short term, while the development space of retirement insurance business is large but also faces competition with other life insurance companies, and its professional advantages are not obvious," Zhou said.
As the new chairman takes office, it is worth looking forward to how Xinhua Retirement will give full play to the professional advantages of retirement insurance companies, explore innovative retirement insurance products and service models.