Three Gorges Life Insurance's Equity Auction Fails: Only by Shedding the License Bubble Can True Value Be Seen

Listing | Zhongfang.com

Review | Li Xiaoyan

On February 10th, the auction of 200 million shares of Three Gorges Life held by Xinhuanet Holdings on JD.com’s auction platform failed to attract any bids. Despite drawing 4,401 viewers, no bids were placed. This transaction was once interpreted as a sign that insurance licenses are losing favor. However, looking beyond the short-term surface, this failed auction does not indicate industry decline but is a natural result of China’s insurance industry shifting from extensive expansion to high-quality development. It is also a key moment for Three Gorges Life’s reform under Chongqing state-owned assets, moving towards risk mitigation and lighter operations. Currently, the industry is bidding farewell to license premium speculation and returning to value investing fundamentals; with strong support from local state assets, Three Gorges Life has restructured governance, solidified capital, and revived business, moving out of the risk bottom and into a new path of differentiated, sustainable growth.

The shares that failed to sell are all non-pledged shares held by Xinhuanet Holdings, accounting for 6.59% of Three Gorges Life’s total equity, with an initial asking price of 202 million yuan. On the surface, the lack of interest highlights the cooling of equity transactions for small and medium-sized insurers. Deeper down, it reflects the market’s rational valuation of insurance equity returning to normal. In previous years, insurance licenses were highly sought after due to scarcity, becoming tools for cross-sector financing and scale expansion. Some capital ignored operational capability and profitability prospects, blindly entering the market and inflating license bubbles. Today, the industry’s logic has been fundamentally reshaped. Capital no longer pays premiums for licenses but focuses on profitability, solvency, governance, and industry synergy. The 6.59% non-controlling stake lacks operational control, and short-term financial returns are uncertain. The failed auction is a rational market choice, not a collapse of industry value.

Looking across the industry, the repeated failure and discounting of small and medium-sized insurer equity sales have become normal. Many institutions, such as Ancheng Property & Casualty and Xingfu Life, have experienced cold auction results. This is not capital abandoning insurance licenses but a necessary step for industry cleanup and structural optimization. Under the second phase of the “Solvency II” regulatory framework, capital requirements for insurers are tightening, and risk margins are manageable. The industry is shifting from rapid growth to deep transformation. The Matthew effect is driving resources toward leading and specialized players. The old model of “抢牌照、躺赚” (rushing for licenses and earning passively) has ended, replaced by competition based on professional ability, risk management, and long-term value—an important sign of the industry’s maturity.

As the only local nationwide life insurance company in Chongqing, Three Gorges Life’s reform and risk mitigation exemplify how local state-owned assets safeguard regional financial security and activate local financial resources. Since 2023, facing pressure from comprehensive risk ratings and ongoing operational losses, Chongqing’s state assets have decisively intervened with a “capital injection + equity integration + governance restructuring” approach, strengthening the company’s foundation. After two rounds of capital increases, the registered capital rose from 1 billion to 3.033 billion yuan, with solvency ratio exceeding 330%, far above regulatory standards, placing it among the top small and medium insurers and fully overcoming capital shortages. By December 2025, Chongqing Development Investment became the sole largest shareholder with a 33% stake, completing internal equity integration and governance restructuring. In January 2026, the CEO position, vacant for seven years, was filled by a senior executive with experience in both leading insurers and local markets, stabilizing management decisions and strategic execution.

Supported by strong state assets, Three Gorges Life’s operational data has shown positive signs of recovery. In 2025, the company’s insurance revenue rebounded to 633 million yuan, with steady growth in business scale and ongoing optimization of business structure. Despite facing short-term profitability pressures, with a net loss of 197 million yuan in 2025, compared to its early days of rough expansion, losses have narrowed, risks have been cleared, and channels have been solidified, significantly improving operational quality. From risk coverage to operational empowerment, Chongqing’s state assets are not merely providing “blood transfusions” but are driving transformation through governance restructuring, strategic realignment, and resource synergy—shifting Three Gorges Life from a risk-focused institution to a stable, well-managed entity. This also reflects the responsibility of local financial state assets to serve regional development and fulfill social responsibilities.

Following this failed auction, market attention shifts to subsequent disposal and future direction. Considering Three Gorges Life’s state-owned background and strategic positioning, the subsequent disposal path is clear and positive. First, internal integration within Chongqing’s state asset system is likely, further optimizing the shareholding structure, consolidating control, maintaining stable operations, and preventing disorderly external capital entry that could disrupt strategic implementation. Second, strategic investors with deep ties to the Greater Chengdu-Chongqing health, elderly care, and social welfare sectors could be introduced to create an “insurance + industry” ecosystem, moving beyond pure financial investment to achieve long-term value co-creation. Third, if auctioned again, with reasonable price adjustments, it could attract long-term capital that recognizes the long-term value of insurance and pursues stable asset allocation. Whatever the path, the goal is to serve the long-term, stable development of Three Gorges Life, not short-term speculation.

For Three Gorges Life, the failed auction is also a strategic “debt reduction.” Disposing of legacy shares from previous shareholders relieves pressure, allowing the company to focus more on core capabilities. Leveraging Chongqing’s state asset backing and the strategic opportunities of the Chengdu-Chongqing twin-city economic circle, Three Gorges Life should avoid blindly pursuing scale expansion and instead focus on regional markets and niche segments, pursuing a “small but refined, specialized and excellent” differentiated development path. By emphasizing elderly care, health management, and inclusive insurance, and leveraging local resources to develop differentiated products and services, the company can win market trust through professionalism and achieve sustainable profitability through prudent management—an effective approach for small and medium-sized insurers to break through.

From an industry perspective, the failed auction of Three Gorges Life’s shares sends a clear signal: the insurance industry has entered a new stage of high-quality development. License value is giving way to professional value; short-term speculation is giving way to long-term investment; extensive expansion is giving way to refined operations. This shift benefits industry risk clearing, resource optimization, and ecological purification, helping the entire sector return to its fundamental role of providing security. For small and medium insurers, abandoning license dependence, focusing on core business, strengthening risk control, and enhancing service capabilities are essential to stabilize and win in the industry’s transformation.

The rise and fall of tides reveal resilience; only through the washing away of the sand can true gold be seen. The failed auction of Three Gorges Life’s shares reflects the industry’s rational return and marks a new beginning for its reform and risk mitigation. With steadfast support from Chongqing’s state assets, and on the basis of governance restructuring, capital strengthening, and business revival, Three Gorges Life is shedding its historical burdens and entering a new stage of steady development. The Chinese insurance industry will also seize this industry adjustment as an opportunity to discard bubbles, return to fundamentals, create value through professionalism, safeguard livelihoods with prudence, and achieve higher-quality development in serving the real economy and social welfare.