(A) Comparative analysis of the capital strength of Chinese and foreign insurance industry
The strong capital strength of insurance companies is conducive to increasing R&D investment and improving the ability to develop new products; Conducive to achieving economies of scale and reducing production costs; It is conducive to broadening marketing channels, obtaining more financing channels and improving the company's comprehensive strength. This interactive relationship between enterprise capital strength and international competitiveness is usually called "circular cumulative effect". See Table 2.
Table 2 Comparison of Asset Strength between Chinese and Foreign Insurance Companies in 2002
Asset size of insurance companies in China
Annual premium income (RMB 100 million)
Asset size of foreign-funded insurance companies (RMB 100 million)
Annual premium income (USD 100 million)
(Billion dollars)
People's Insurance Company of China 525.9 507.4 French AXA 7890 72 1
China Pacific Insurance Company 289.7 143.4 AIA 1340 259
China Ping An Insurance Company 948.3 464.6 British Standard Life 2000 2 1 (100 million pounds)
China Life Insurance Company 2209.7 2333.7 British Chamber of Commerce Group 3200 4 16
Source: Insurance Information Network.
As can be seen from Table 2, the most obvious competitive advantage of foreign insurance companies is their huge capital strength. Even the assets of large multinational insurance companies are more than the total assets of China's insurance industry. At present, foreign-funded insurance companies operating in China have a history of over 100 years, with total assets mostly in the tens or even hundreds of billions of dollars. Take AXA Group as an example. The insurance enterprise group ranked 15 among the world's top 500 companies had assets of US$ 789 billion and business income of US$ 7.2/kloc-0.0 billion in 2002 (compared with the total assets of China at the end of 2003 of RMB 90/kloc-0.28 billion and the total premium income of RMB 388.04 billion), which is the total assets of the insurance industry in China. However, the capital scale of Chinese insurance companies is generally small. Except for the top four insurance companies, the scale of other insurance companies is even weaker than that of foreign insurance companies. The "three small" situation of small registered capital, small net assets and small total assets makes it difficult for Chinese insurance companies to exert economies of scale and be at a disadvantage in the competition with foreign insurance companies.
(B) Analysis of market possession capacity
Look at the market share comparison first, as shown in Table 3.
Table 3 Comparison of premium income between China and major developed countries in the world in 2002
The United States, Japan, Britain, Germany, French, Italian and China.
Guaranteed income (USD 100 million)10004.00 4456.00 2367.001358.001250.00 840.00 381.66
World share (%) 42.4718.9210.05 5.77 5. 3 1 3.57 1.55
Source: According to Swiss reinsurance company Sigma, No.8, 2003.
As can be seen from Table 3, the world premium income is mainly concentrated in developed countries, which also shows that developed countries occupy a major position in the world insurance market. Since the resumption of business, China's insurance industry has developed rapidly, but the total scale of insurance business is still small.
The reasons for the low level of economies of scale of China's insurance companies are as follows: First, most Chinese insurance companies have only been doing business for 10 years, and their scale has not reached the level of realizing economies of scale, so the critical point of the minimum optimal scale should be at a high level; Secondly, the development environment of insurance market, capital market and national economy in China has affected the realization of scale economy of insurance companies; Third, due to the lack of actuaries and other professional and technical personnel, the key links of insurance management, such as underwriting, insurance development and premium determination, are insufficient. , making the product update slow and difficult to achieve economies of scale.
Listing is also very effective for improving the core competitiveness of insurance companies. At present, there are two major problems in state-owned insurance companies, besides the lack of capital, there is also the problem of the absence of owners. The single property right structure leads to the low efficiency of micro-management mechanism.
(2) Take the form of mergers and acquisitions.
According to the data, from 65438 to 0996, 382 insurance companies in the world completed mergers and acquisitions, with a total amount of 4 1 100 million US dollars. During the five years from 65438 to 0997 to 20065438+0, there were 5 1 14 global insurance mergers and acquisitions, involving a total amount. It can be seen that in the development of international insurance industry in 2 1 century, M&A insurance will have a growing trend.
According to the general principle of economies of scale, large companies generally have lower operating costs and higher operating efficiency than small companies, which is caused by the inseparability of fixed capital elements. When the company expands its business volume, the total investment will not increase proportionally with the increase of business volume, and the average fixed cost will decrease with the increase of business volume. So? The average cost of products, including fixed costs and variable costs, will naturally decrease with the increase of business volume. From a large number of international insurance M&A cases, we can verify a universal law: insurance companies can expand their business scale through mergers and acquisitions, and the expansion of business scale can reduce the average cost, thus improving economies of scale.
At present, most insurance companies in China's insurance industry have not yet reached the requirements of economies of scale, and some companies still have the characteristics of miniaturization, regionalization and decentralization. Some small and medium-sized insurance companies in China may go bankrupt once problems arise because of their limited capital, weak strength and poor ability to resist risks. However, China's insurance regulatory authorities generally deal with such matters by means of merger and reorganization, government assistance and bankruptcy liquidation. Although these three methods have their own advantages in practice, on the whole, the effect of merger and reorganization is better than government assistance and bankruptcy liquidation under the condition of imperfect risk dispersion mechanism. Merger and acquisition can reduce the burden of national finance and enterprises, fully tap the survival value of insurance companies in the crisis, and also reduce the impact on society and insurance system. In addition, mergers and acquisitions have brought diversified business perspectives to insurance companies. Diversification of management and products can effectively spread risks and enhance their position in the market. International experience shows that the integration of existing insurance resources through mergers and acquisitions can not only improve the performance of insurance companies from a micro perspective, but also improve the allocation efficiency of social insurance resources from a macro perspective, which will help China insurance companies to take the lead in the future competition with the international insurance industry and enhance the overall competitiveness of China insurance industry.
(3) forming an insurance group
Judging from the current organizational mode of foreign insurance companies entering China's insurance market, most of them adopt the group holding mode to realize the separate operation and professional management of production and life insurance. For example, American International Group (AIG), the first company to enter the China market, owns AIA, a wholly-owned life insurance subsidiary, and AIA, a property insurance subsidiary. In the United States, AIG also has a number of investment subsidiaries, which are responsible for the professional management of insurance funds of the whole group. During 1998, property insurance accounted for 49.9%, life insurance accounted for 33.3%, and financial services accounted for 16.8%. Allianz Group of Germany also adopted the group holding mode in its organizational mode. From 65438 to 0998, life insurance and health insurance accounted for 34.4% of insurance business income, and property insurance and accident insurance accounted for 65.6%. Royal Sun United Insurance Group also adopted the group holding mode. In the total premium income of 1998, property insurance accounted for 70.6% and life insurance accounted for 29.4%. Foreign insurance companies have achieved economies of scale through group holding, thus enhancing their competitiveness.