Eternal Sincerity Property Insurance Co., Ltd. (Eternal Sincerity Insurance) recently released its performance for 2024, showing a net loss of 550 million yuan (RMB).
According to the report by Huaxia Times on February 8, the solvency report for the fourth quarter of 2024 released by Eternal Sincerity Insurance revealed that the company achieved insurance business income of 6.94 billion yuan for the whole year 2024, a decrease from the previous year’s 7.213 billion yuan, with the net profit also turning from profit to loss.
The company’s annual reports for the years 2019 to 2023 indicated that the insurance business income was 6.578 billion yuan, 7.378 billion yuan, 7.666 billion yuan, 7.254 billion yuan, and 7.213 billion yuan respectively for those years, while the net profits for the same period were 109 million yuan, 149 million yuan, 110 million yuan, 93 million yuan, and 97 million yuan, achieving profit for five consecutive years. However, in 2024, it shifted from profit to loss.
Regarding the reasons for the net profit loss, the relevant person in charge of Eternal Sincerity Insurance stated that it was mainly due to the impact of natural disasters such as the “Capricorn” typhoon and individual major claims in 2024.
In addition to the shift from profit to loss in net profit, Eternal Sincerity Insurance also experienced a decline in solvency. In the fourth quarter of 2024, the company’s core and comprehensive solvency adequacy ratios were 136.4% and 164.34% respectively, decreasing by 29.2 and 28.2 percentage points compared to the previous quarter.
Regarding this, Eternal Sincerity Insurance stated in its quarterly report: “Mainly due to increased operating losses from the third quarter, actual capital decreased, leading to a significant drop in solvency. The company has taken various measures to actively improve operational efficiency.”
Public information shows that Eternal Sincerity Insurance was established in 2004, jointly formed by large electricity enterprise groups such as China Huaneng and industrial investment groups, with its headquarters located in Shanghai, and is a typical “electricity-based” insurance company.
According to reports, several “electricity-based” shareholders of Eternal Sincerity Insurance are seeking to exit. In December last year, 3.28% of the equity of Eternal Sincerity Insurance was listed for transfer by the Southern Power Grid, with a transfer floor price of about 111 million yuan. On February 8, when the listing period expired, no new buyer was found for the mentioned equity. This is the second time that the Southern Power Grid has listed all its shares for transfer, as in July 2023, it listed the equity in the Guangdong Joint Property Exchange Center with a floor price of 102 million yuan.
Moreover, Datang Capital, National Power Capital, and China Power Capital have also separately listed their holdings of 7.6%, 6.57%, and 7.6% of Eternal Sincerity Insurance’s equity on the property exchange. Together with the Southern Power Grid’s listed 3.28% equity, a total of 25.05% of Eternal Sincerity Insurance’s equity is about to be “cleared out.”
Regarding the future of Eternal Sincerity Insurance, Wang Hongying, Director of the China (Hong Kong) Financial Derivatives Investment Research Institute, analyzed, “As an electricity-based insurance company, the most important advantage of Eternal Sincerity Insurance lies in its shareholder strength. Expanding the electricity insurance business based on shareholder resources. Therefore, as shareholders exit, it will inevitably affect the development of this part of the business.”