China has witnessed its first bond default in the insurance sector, as Tian’An Property Insurance Company announced it would be unable to repay a 5.3bn yuan (US$744.4m) capital supplementary bond due on 30 September of this year, according to a recent announcement.
The bond, referred to as “15 Tian’An Property Insurance,” is a capital supplementary bond issued by the company on 29 September 2015, with a ten-year duration.
According to the announcement, Tian’An Property anticipated it would be unable to repay the principal and interest due to the fact that, as of September 30, 2025, the company could not ensure that its solvency ratio would remain above 100% after repaying the principal and interest of this bond, while also being able to settle other liabilities.
The firm also stated that it has actively communicated with the bondholders and is fully cooperating with their requests. Additionally, the company would manage this bond as part of its risk management efforts in the future.
Tian’An Property is the fourth property insurance company established in China, according to the company website. Headquartered in Shanghai, the firm was founded in 1995 with a registered capital of 17.8bn yuan.
In July 2020, several companies, including Tian’An Property Insurance, were placed under the supervision of regulatory authorities. In September of the same year, the insurer decided not to exercise its redemption option, stating that the company was conducting an asset verification process.
Later in 2024, Sheneng Property Insurance Company was established and acquired Tian’An Property Insurance’s business, including its assets, liabilities, and insurance operations.
In June this year, China’s National Financial Regulatory Administration (NRFA) revoked Tian’An Property Insurance’s licence, citing that its governance report does not align with the actual situation. Additionally, some proposed senior management personnel have assumed their positions without the requisite qualifications.
The company was also accused of illegally transferring benefits to related parties through trusts, deposits, wealth management, and equity fund investments, and has failed to use the approved insurance terms and premium rates as required. It has also allegedly provided false reports, statements, documents, and materials to regulatory authorities.
