China Pacific Insurance : Summaries of Solvency Reports (experts)

Summary of Solvency Report (Excerpts)

CHINA PACIFIC INSURANCE (GROUP) CO., LTD.

2023

Company overview and contact information

Company name (Chinese):	中国太平洋保险（集团）股份有限公司
Company name (English):	CHINA PACIFIC INSURANCE (GROUP) CO., LTD.
Legal representative:	FU Fan
Registered address:	1 Zhongshan Road (South), Huangpu District,
Shanghai, PRC.
Registered capital:	RMB9.62 billion
Business license number:	000013
First date for registration:	May 13, 1991
Business scope:	Invest in controlling stakes of insurance companies;
supervise and manage the domestic and
international reinsurance business of the insurers
under its control; supervise and manage the
investments by the insurers under its control;
participate in international insurance activities as
approved.
Contact person：	HUANG Danyan
Office Tel. number：	021-33968093
Cell phone：	13764517031
Fax number：	021-58792445
E-mail：	[e-mail]

CONTENTS

I. BOARD AND MANAGEMENT STATEMENT ...................................................... 4

II. BASIC INFORMATION ................................................................................ 5

III. BUSINESS OPERATION OF MAJOR MEMBER COMPANIES ....................... 7

IV. SOLVENCY STATEMENTS .......................................................................... 9

V. MANAGEMENT ANALYSIS AND DISCUSSIONS ............................................ 10

VI. RISK MANAGEMENT CAPABILITIES .............................................................. 11

VII. INTEGRATED RISK RATING ............................................................................. 18

3

I. Statement by the board and management

The report has been approved by the board of directors. The board and the senior management of the Company warrant that the contents of this report are true, accurate and complete and have fully complied with applicable laws and regulations, and that there is no false representation, misleading statements or material omissions; and they severally and jointly accept responsibility for the contents of this report.

1．Voting results by directors

Name of directors	For
WANG Tayu	√
LIU Xiaodan	√
CHEN Ran	√
LAM Tyng Yih,	√
Elizabeth
LO Yuen Man, Elainen	√
CHIN Hung I David	√
ZHOU Donghui	√
JIANG Xuping	√
HUANG Dinan	√
FU Fan	√
LU Qiaoling	√
John Robert Dacey	√
Total	12

Against

Abstain

Note: Mark "√" in corresponding blanks according to opinions of directors.

2．Are there any directors who cannot guarantee or harbor any doubt about the truthfulness, accuracy, completeness or compliance of the contents of this report? （yes□no■）

II. Basic Information

(I) Shareholding structure, shareholders and change

1．Shareholding structure (unit: share)

As at the beginning of the reporting period

Increase or decrease (+ or -) of shareholding during the reporting period

As at the end of the reporting period

PercentageAmount

Transfer

(%)New shares issuedBonus shares

1.Ordinary shares denominated in RMB

6,845,041,455

2.Domestically shares

listedforeign

3.Overseas listed foreign shares (H share)

-2,775,300,000

4. Others Total

- 9,620,341,455

71.15

28.85

- 100

----

- ----

- -

from reserves

---

- -

Others

---

- -

Sub-total	Amount	Percentage (%)
6,845,041,455	71.15
-	-
2,775,300,000	28.85
-	-
9,620,341,455	100

-

--

- -

2．Top 10 shareholders (unit: share)

Name of shareholders

Percentage of shareholding

Total number of shares heldIncrease or decrease (+ or -) of shareholding during the reporting periodNumber of shares subject to pledge or lock-up

Type of shares

HKSCC Nominees Limited

Shenergy (Group) Co., Ltd.

28.82% 14.05%

2,772,583,107 1,352,129,014

+52,880

- -H Share

-

A Share

Hwabao Investment Co., Ltd.

13.35%

1,284,277,846

-

-A Share

Shanghai State-Owned Assets Operation Co., Ltd.

6.34%

Shanghai Haiyan Investment Management Company Limited

4.87%

609,929,956 468,828,104

- -- -A Share

A ShareChina Securities Finance Co., Ltd.

2.82%

271,089,843

+38,416,359

-A Share

HKSCC

2.46%

236,525,992

Shanghai International Group

1.66%

160,000,000

Yunnan Hehe (Group) Company Limited

0.95%

91,868,387

Shanghai Jiushi Company Limited

0.93%

89,737,760

- - - -1,141,900

- - - -

• A Share

• A Share

• A Share

• A ShareDescription of related relations or concerted actions among the aforesaid shareholderHKSCC Nominees Limited and HKSCC are connected, as the former is a wholly-owned subsidiary of the latter. Shanghai State-Owned Assets Operation Co., Ltd. is a wholly-owned subsidiary of Shanghai International Group, and they act in concert. Other than this, the Company is not aware of any other connected relations or concerted actions among the above-mentioned shareholders.

Notes:

• 1. As at the end of the reporting period, the Company did not issue any preferred shares.

• 2. The shareholding of the top 10 shareholders is based on the lists of registered shareholders provided by China Securities Depository and Clearing Corporation Limited Shanghai Branch (A share) and Computershare Hong Kong Investor Services Limited (H share) respectively. The nature of A shareholders is the same as the nature of their accounts registered with China Securities Depository and Clearing Corporation Limited Shanghai Branch.

3. The shares held by HKSCC Nominees Limited are held on behalf of its clients. As SEHK does not require such shareholders to disclose to HKSCC Nominees Limited whether the shares held by them are subject to pledge or lock-up period, HKSCC Nominees Limited is unable to calculate, or make available such data. Pursuant to Part XV of the SFO, a Substantial Shareholder is required to give notice to SEHK and the Company on the occurrence of certain events including a change in the nature of its interest in shares such as the pledging of its shares. As at the end of the reporting period, the Company is not aware of any such notices from Substantial Shareholders under Part XV of the SFO.

4. HKSCC is the nominal holder of shares traded through Shanghai-Hong Kong Connect Programme.

III. Business Operation of Major Member Companies

(I) CPIC Life

CPIC Life adhered to high-quality development, and achieved solid momentum in business development. In 2023, the subsidiary recorded written premiums of 252.817bn yuan, a year-on-year growth of 3.2%; net profits of 19.532bn yuan; NBV of 10.962bn yuan, up by 19.1% from 2022.

As of the end of 2023, its comprehensive solvency margin ratio was 210%, a decline of 8pt from the year beginning, mainly due to impact of changes in interest rate, capital market fluctuations, business development, changes to asset allocation, bond issuance, and implementation of new regulation (Jingui [2023] No.5). Of this,

(1) Actual capital 312.005bn yuan, down by 9.4%, or 32.217bn yuan from the year beginning;

(2) Minimum capital 148.723bn yuan, down by 5.8%, or 9.079bn yuan from the year beginning.

(II) CPIC P/C

In 2023, the subsidiary reported rapid premium growth with solid underwriting profitability.

It delivered 188.342bn yuan in primary premium income, a year-on-year growth of 11.4%, and net profits of 6.575bn yuan.

As of the end of 2023, its comprehensive solvency margin ratio stood at 214%, up by 12pt from the year beginning, mainly due to impact of capital market fluctuations, changes to asset allocation, business development, issuance of bond, and implementation of new regulation. Of this,

(1) Actual capital61.775bn yuan, up by 6.621bn yuan from the year beginning, or a growth of 12.0%;

(2) Minimum capital 28.898bn yuan, up by 1.652bn yuan, or 6.1% from the year beginning.

(III) CPIC Health

The company saw sustained improvement in business metrics, with enhanced professional capability for sustainable development. During the reporting period, the subsidiary realised 2.079bn yuan in GWP and health management fee income, and net profits of 31mn yuan.

As of the end of 2023, its comprehensive solvency margin ratio stood at 258%, down by 7pt from the year beginning, mainly due to impact of changes of interest rate and capital market, business development, and changes to asset allocation and implementation of new regulation. Of this,

• (1) Actual capital 3.488bn yuan, up by 8.1%, or 263mn yuan from the year beginning;

• (2) Minimum capital 1.352bn yuan, up by 11.2%, or 136mn yuan from the year beginning.

(IV) CPIC AMC

During the reporting period, the company followed high-quality development, pro-actively optimised its investment strategies, vigourously managed various risks and pushed for steady development of third-party business. It posted 225.154bn yuan in third-party AuM.

(V) Changjiang Pension

Changjiang Pension stayed committed to serving China's national retirement strategies, pro-actively optimise investment strategies, actively control all kinds of risks, and guarantee the stable operation of third-party asset management business. As at 31 December 2023, its third-party assets under trustee management amounted to

RMB410.993 billion; third-party assets under investment management reached RMB352.032 billion.

(VI) Other member companies

As of the end of 2023, total assets of CPIC Property reached 225mn yuan, with net assets of 191mn yuan; total assets of CPIC Technology reached 1.625bn yuan, with net assets of 714mn yuan.

IV. Solvency Statements

Solvency Statements of Insurance Holding Groups

Name：China Pacific Insurance (Group) Co., Ltd.

(31 December, 2023)

unit：10 thousand RMB yuan

Items	No. of lines	As at the end of the reporting period 1	As at the beginning of the reporting period 2
Actual capital	（1）=（2）+（3）+ （4）+（5）	45,693,824	47,907,342
Tier 1 core capital	（2）	29,176,067	31,950,386
Tier 2 core capital	（3）	1,214,761	1,291,004
Tier 1 supplement capital	（4）	15,298,572	14,658,632
Tier 2 supplement capital	（5）	4,424	7,320
Minimum capital	（6）=（7）+（21） +（22）	17,801,725	18,733,329
Minimum capital for quantitative risks	（7）=（8）+（9）+ （10）+（11）+（12） +（13）－（20）	18,012,787	18,733,329
Minimum capital for parent company	（8）	-
Minimum capital for insurance member companies	（9）	18,012,787	18,733,329
Minimum capital for banking member companies	（10）	-	-
Minimum capital for securities member companies	（11）	-	-
Minimum capital for trust member companies	（12）	-	-
Minimum capital for quantifiable group-specific risks	（13）=（14）+（15）	-	-
Minimum capital for risk contagion	（14）	-	-
Minimum capital for concentration risk	（15）=（16）+（17） +（18）-（19）	-	-
Minimum capital for concentration risk - counter parties	（16）	-	-
Minimum capital for concentration risk - industry	（17）	-	-
Minimum capital for	（18）	-	-
concentration risk - customers
Risk diversification effect	（19）	-	-
Decrease in required capital for risk diversification effect	（20）	-	-
Minimum capital for control risk	（21）	(211,061)	-
Supplement capital	（22）	-	-
Core solvency margin	（23）=（2）+（3） －（6）× 50%	21,489,965	23,874,725
Core solvency margin ratio	（24）= [（2）+（3）] / （6）× 100%	171%	177%
Comprehensive solvency margin	（25）=（1）－（6）	27,892,098	29,174,012
Comprehensive solvency margin ratio	（26）=（1）/（6） × 100%	257%	256%

Note: Decrease in required capital for risk diversification effect and supplement capital at the group level are yet to be defined by the regulator.

V. Management Analysis and Discussions

(I) Analysis of solvency margin ratio movements during the reporting period

As of the end of 2023, Group comprehensive solvency margin ratio stood at 257%, up by 1pt from the year beginning; core solvency margin ratio was 171%, down by 6pt from the year beginning, mainly due to changes to interest rate and capital market, business development, and bond issuance of its subsidiaries. Of this,

1) Actual capital amounted to 456.9bn yuan, down by 22.2bn yuan from the year beginning; core capital 303.9bn yuan, down by 28.5bn yuan from the year beginning.

2) Minimum capital 178.0bn yuan, down by 9.3bn yuan from the year beginning.

In short, Group solvency margin ratios stayed solid, all above regulatory minimum levels.

(II) Analysis of changes to IRR and Group risk status during the reporting period

The regulator is yet to carry out Integrated Risk Rating for insurance groups.

In 2023, the Group enjoyed sound and stable operation overall with effective implementation of its risk appetite. All the risk indicators remained stable, with the overall risk under control.

No risk events with significant impact occurred in the year. However, the Group still faces some risks caused by uncertainty in the environment, including:

First, macro-environmental risks. World political landscape remains complex and difficult, with flare-ups in geo-political conflicts, polarisation of economic development and

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