21 Century Economic Daily Reporter Huang Zixiao, Shenzhen
On 9 month 30 day, China Merchants Renhe Life Insurance Co., Ltd. (hereinafter referred to as "China Merchants Renhe Life") announced a change in registered capital, proposing an exclusive capital injection of 26.56 billion yuan by its major shareholder, China Merchants Financial Holdings Co., Ltd. (hereinafter referred to as "China Merchants Financial Holdings").
This marks the first capital increase for the company since 2020, driven by a wave of capital supplementation among insurers this year. According to incomplete statistics, approximately 20 insurance companies have announced capital increases so far, with 5 disclosing their plans since 9.
After six years, China Merchants Group increases its stake to nearly half.
The announcement stated that the shareholders' meeting of China Merchants Renhe Life Insurance Co., Ltd. approved the capital increase and share expansion plan for 2026. The company plans to issue 18.57 billion additional shares, raising 26.56 billion yuan, all subscribed by shareholder China Merchants Financial Holdings (CMFH), with no new shareholders added. Upon completion of the capital increase, the company's registered capital will rise from 65.99 billion yuan to 84.57 billion yuan, and CMFH's stake will increase from 33.33% to 47.97%. The shareholding percentages of other seven shareholders, including China Mobile, CAICT, Shenzhen Investment Holding, and Qianhai Financial Holdings, will be correspondingly diluted.
This capital increase constitutes a material related-party transaction. The affiliated shareholder, China Merchants Financial Holdings, abstained from voting; the resolution was passed unanimously and will take effect upon regulatory approval. Regarding the use of proceeds, the company stated that funds will be used to meet solvency adequacy ratio requirements, strengthen risk resilience, and support the implementation of the "15th Five-Year Plan." The funding source is China Merchants Financial Holdings' own capital, not loans or raised funds.
Founded by central state-owned enterprises including China Merchants, China Mobile, and China Information Technology, China Merchants Renhe Life traces its brand heritage back to the Insurance Bureau of the China Merchants Steam Navigation Company and "Renhe Insurance," established in 1875. The company resumed operations on 4 7, 2017, at Shenzhen Qianhai, primarily offering life insurance, health insurance, and other services.
The company's last capital increase dates back to 2020 in 3. At that time, shareholders Zhaorong Investment Holdings (the predecessor of China Merchants Financial Holdings), China Mobile, and Qianhai Financial Holdings jointly invested, increasing the registered capital from 50 billion to 65.99 billion yuan.
This marks the first capital injection in six years. Following the 2020 capital increase, Zhaorong Toukang held 33.33% of shares, reaching the single-shareholder cap at that time; after this round of capital injection, China Merchants Holdings' stake is nearly 50%, further strengthening its control.
Under the "Administrative Measures for Equity of Insurance Companies," a single shareholder's stake in an insurance company shall not exceed one-third. However, if an investment or acquisition is made to establish or acquire an insurance company due to business innovation, specialization, or group operations, there is no cap on the capital contribution or shareholding percentage.
In the past year, capital increase cases with major shareholders holding over one-third of shares have been approved for companies such as Huagui Life Insurance (under Moutai Group), Zhongmei Property & Casualty Insurance (under Shanxi Financial Holdings), and Hengqin Life Insurance (under Huafa Group).
Recovery in solvency
From an operational perspective, China Merchants Renhe Life Insurance is in a growth phase.
The 2025 annual report shows that the company achieved total revenue of 192.78 billion yuan, a year-over-year increase of 17.56%; net profit reached 6.78 billion yuan, surging 419.22% year-over-year to set a new record high; total assets hit 1081.68 billion yuan, up 18.42% from last year, surpassing 100 billion yuan for the first time; and total premiums written for the year amounted to 194.8 billion yuan, up 18.5% year-over-year.
At the end of 2025, the company's comprehensive and core solvency adequacy ratios dropped to 160.53% and 96.19%, respectively. However, after issuing 23 billion yuan in perpetual bonds in the first half of 2026, these ratios rebounded by the end of 6 to 163% and 113%, respectively, and further increased to 170.21% and 122% by the end of 7.
According to the mid-year work conference of China Merchants Renhe Life Insurance 2026, in the first half of 2026, the company achieved a consolidated net profit of 6.27 billion yuan, with a budget achievement rate of 123.34%, marking a significant improvement in profit targets. Total assets reached 1133.42 billion yuan, representing a 5.88% increase from the beginning of the year.
The credit evaluation report for China Merchants & Renhe Life Insurance released on 9 28 provides more details. In the first half of the year, the company reported consolidated revenue of 28.76 billion yuan, including insurance service income of 7.54 billion yuan, interest income of 12.08 billion yuan, investment income of 8.65 billion yuan, and net profit of 6.27 billion yuan.
Lianhe Ratings stated in the report that, during the first half of 2026, underwriting income for China Merchants Renhe Life Insurance declined year-over-year due to factors such as the transformation of participating insurance products and intensified market competition. The company's distribution channels remain primarily bank-led (over 85%). In the first half of the year, the company recorded gross written premiums of 99.51 billion yuan, a 3.51% decrease year-over-year, with a market share of 0.35%; scale premiums totaled 105.75 billion yuan, down 4.35% from the same period last year.
"After implementing the new standards, the company has shown strong profitability; however, maintaining future earnings stability requires close monitoring. Solvency remains at a robust level," the credit rating agency stated.
About 20 insurers raised capital this year.
In addition to China Merchants Renhe Life and Guobao Life disclosing capital increase plans ahead of the National Day holiday, five central insurance SOEs have received capital injections from the Ministry of Finance this year. Other insurers—including Dajia Property & Casualty, Taikang Pension, Haixia Jinqiao Property & Casualty, Zhonghua United Life, Bohai Property & Casualty, Huatai Life, Zhongan Online, Lujiazui Guotai Life, Taiping Reinsurance (China), Changjiang Property & Casualty, HSBC Life, Guofu Life, Junlong Life, and China Fisheries Mutual Insurance Society—have also announced their own capital increase plans.
Huatai Life's 9.7 billion yuan capital increase plan was approved in 9, raising registered capital from 43.13 billion to 52.83 billion yuan. HSBC Life completed two capital increases this year: the 5.56 billion yuan injection approved in 6 was finalized, and in 8, it disclosed plans for its sole shareholder, HSBC Insurance (Asia), to inject an additional 4.72 billion yuan. Lujiazui Taikang Life's two shareholders each plan to contribute 10 billion yuan, increasing registered capital from 30 billion to 50 billion yuan. Guobao Life intends to raise approximately 25.41 billion yuan in registered capital, with Sichuan Golden Control Group subscribing to about 10.25 billion yuan in new shares. Meanwhile, perpetual bonds have become the primary tool for insurers to bolster their capital.
According to data from the National Financial Regulatory Administration, as of the end of Q2 2026, insurers' average comprehensive solvency adequacy ratio was 180.6%, and their core solvency adequacy ratio was 133.5%. These figures represent a quarter-over-quarter decrease of 0.4 percentage points and an increase of 1.6 percentage points, respectively, while year-over-year changes were decreases of 23.9 and 14.3 percentage points, respectively. Among them, life insurers had comprehensive and core solvency adequacy ratios of 169.7% and 119.6%, respectively.
China Bond Credit Rating Agency noted that under the "C-ROSS Phase II" rules, only policy surpluses with remaining terms of 10 years or longer can be included in core capital, and their proportion must not exceed 35%. Consequently, many insurers face downward pressure on their core capital.
Guosheng Securities believes that the rationale for insurance institutions to supplement capital lies in: a low-interest-rate environment depressing investment returns and intensifying asset-liability matching pressures, while business expansion and increased allocation to equity and other risk assets continuously deplete solvency capital. Therefore, capital injection is needed to strengthen the capital base, improve solvency ratios, and create room for long-term investments.
In 9 this year, the Ministry of Finance announced the issuance of special bonds worth 3000 billion yuan to support 8 central financial enterprises in bolstering their core tier-1 capital. For the first time, 5 central insurance enterprises were included, with a total capital injection of 700 billion yuan. Research institutions generally believe that major insurers currently have sufficient capital adequacy, and the capital top-up is primarily a precautionary measure.
However, analysts argue that capital increases and bond issuance are essentially external financing. Over-reliance on these can raise leverage and increase medium-to-long-term liquidity management pressure. A more fundamental approach is to strengthen internal capital accumulation by optimizing business structure and improving operational efficiency.
