Yongcheng Property Insurance fined 1.47 million yuan for four violations, former VP held accountable

Headquarters Penalty Marks First of 2025

The Shanghai Financial Regulatory Bureau has issued an administrative penalty against Yongcheng Property Insurance Co., Ltd. (hereinafter "Yongcheng Property Insurance"), according to a recent disclosure.

The fine notice states that Yongcheng Property Insurance was warned and fined 1.47 million yuan for the following violations:

• Conducting insurance business outside its registered location
• Failing to use approved or filed insurance clauses and premium rates as required
• Inadequate internal controls over insurance business
• Lax management of underwriting authority for accident and health insurance

Additionally, Han Liang, who served as Assistant President and later Vice President of Yongcheng Property Insurance, was warned and fined 100,000 yuan for his responsibility in the improper use of insurance clauses and premium rates, as well as lax underwriting management for accident and health insurance.

This is the company's first administrative penalty at the headquarters level this year, and the 1.47 million yuan fine represents the highest single penalty amount Yongcheng has received in 2025.

Multiple Branch Penalties Earlier This Year

Founded in 2004, Yongcheng Property Insurance is a national joint-stock property insurance company jointly established by large power enterprise groups and industrial investment groups. Headquartered in Shanghai with a registered capital of 2.178 billion yuan, it was the first insurance company listed on China's New Third Board (NEEQ).

In response to the penalty, Yongcheng Property Insurance told International Financial News that the issues primarily occurred between 2020 and 2023. The company stated it has taken targeted measures, completed all related rectifications, and continues to improve compliance management and internal controls.

"This penalty has not had a significant impact on the company," Yongcheng Property Insurance said, adding that it will strictly implement regulatory requirements to ensure all business activities fully comply with national laws and regulations.

According to incomplete statistics from reporters, multiple branches and subsidiaries of Yongcheng Property Insurance received regulatory penalties in the first half of this year, with cumulative fines exceeding 2 million yuan.

January penalties:

• Tongchuan Central Sub-branch: Fined 55,000 yuan for using direct business to falsely list intermediary business to extract fees; responsible person warned and fined 10,000 yuan
• Xianyang Central Sub-branch: Fined 160,000 yuan for falsified financial data; two responsible persons warned and fined 11,000 yuan and 14,000 yuan respectively

February penalties:

• Jiangsu Branch: Fined 210,000 yuan for reimbursing expenses through fictitious business and management fees; responsible person warned and fined 40,000 yuan
• Yongcheng Insurance Asset Management Co., Ltd. (wholly-owned subsidiary): Fined 1.2 million yuan for non-standard asset management business, irregular related-party transactions, and inaccurate financial data; responsible person warned and fined 180,000 yuan

March penalties:

• Dazhou Central Sub-branch: Fined 40,000 yuan for changing business premises without regulatory approval; responsible person warned and fined 40,000 yuan
• Weinan Central Sub-branch: Fined 125,000 yuan for falsifying expenses to extract funds; responsible person warned and fined 15,000 yuan

June penalty:

• Jiamusi Central Sub-branch: Fined 210,000 yuan for fabricating false financial materials; responsible person warned and fined 40,000 yuan

Profit Structure Weaknesses Persist

From 2019 to 2023, Yongcheng Property Insurance reported the following performance:

| Year | Insurance Revenue (billion yuan) | Net Profit (billion yuan) | |------|--------------------------------|--------------------------| | 2019 | 6.578 | 0.109 | | 2020 | 7.378 | 0.149 | | 2021 | 7.666 | 0.110 | | 2022 | 7.254 | 0.093 | | 2023 | 7.213 | 0.097 |

The company maintained profitability for five consecutive years.

However, in 2024, Yongcheng suffered a significant downturn:

• Insurance revenue: 6.936 billion yuan (down 3.84% year-on-year)
• Net loss: 469 million yuan (down 585.99% year-on-year)

Yongcheng explained that the revenue decline was due to the cessation of new financing guarantee insurance business. Excluding this impact, insurance revenue grew over 10% year-on-year. Additionally, the company was affected by overseas major claims, extreme weather disasters, and guarantee insurance business losses, with a combined impact of 767 million yuan.

In 2025, performance rebounded:

• Insurance revenue: 7.255 billion yuan (up 4.61% year-on-year)
• Net profit: 175 million yuan (up 137.39% year-on-year)
• Comprehensive cost ratio: 99.97% (down from 115.19% in 2024)

Despite the recovery, Yongcheng's profit structure remains imbalanced. Enterprise property insurance was the only profitable line, while all other lines posted underwriting losses:

| Insurance Line | Premium Revenue (billion yuan) | Underwriting Profit/Loss (million yuan) | Comprehensive Cost Ratio | |----------------|-------------------------------|----------------------------------------|-------------------------| | Enterprise Property | 1.770 | +187 | 56.99% | | Auto Insurance | 2.542 | -36.2664 | >100% | | Health Insurance | 1.383 | -93.2549 | >100% | | Liability Insurance | — | -5.0658 | >100% | | Engineering Insurance | — | -3.1842 | >100% |

Meanwhile, Yongcheng's revenue remains heavily dependent on shareholder resources. In 2025, the company's top five clients were all shareholders, accounting for 35.52% of related-party sales revenue. China Huaneng Group Co., Ltd. and its subsidiaries alone contributed 27.20%.

In the first half of this year, Yongcheng achieved insurance revenue of 4.703 billion yuan and net profit of 106 million yuan. As of the end of Q2, the company's core solvency adequacy ratio was 126.08%, and its comprehensive solvency adequacy ratio was 165.43%, with the comprehensive cost ratio further reduced to 97.61%.

Multiple "Power Sector" Shareholders Seek Exit

Yongcheng Property Insurance currently has 12 shareholders. Among them, China Huaneng Group holds 20% through Huaneng Capital Services Co., Ltd. (the controlling shareholder) and 7.92% through Northern United Power Co., Ltd. (the fifth-largest shareholder). Huaneng Group also indirectly holds a portion of Shenzhen Energy Group Co., Ltd. (the fourth-largest shareholder) through Huaneng International Power Co., Ltd.

In recent years, amid the central and state-owned enterprises' push to "return to core business," multiple "power sector" shareholders have been seeking to exit Yongcheng:

• September 2021: China Datang Group Capital Holding Co., Ltd. listed 165.528 million shares (7.6% of total equity) for transfer at 281 million yuan
• December 2022: China Huadian Group Industry & Finance Holding Co., Ltd. listed 165.528 million shares (7.6%) for transfer at 256 million yuan
• July 2023: China Southern Power Grid Industry & Finance Holding Group Co., Ltd. listed 71.5 million shares (3.28%) for transfer at 102 million yuan
• September 2023: State Power Investment Group Capital Holding Co., Ltd. listed 143 million shares (6.57%) for transfer at 219 million yuan

Since 2024, these four shareholders have made multiple attempts to list their stakes, with a combined intended transfer of over 25%. However, no buyers have emerged so far.

Analysts noted that for small and medium-sized property insurers, one key resource is business derived from shareholders. Yongcheng, for example, leverages shareholders' power resources to gain advantages in expanding power insurance-related business. The withdrawal of capital could affect this business segment going forward.

"However, this does not necessarily mean a significant negative impact," the analyst added. "While existing shareholder advantages may weaken, new shareholders could bring fresh resources. For enterprise development, shareholder resources are just one aspect. More important is the new shareholders' understanding of industry operational规律 and their strategic direction for the property insurer's future development."

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