A regulatory penalty has brought Modern Property & Casualty Insurance (China) Co., Ltd. (hereafter referred to as Modern Insurance) into the spotlight. Recently, the company, along with its branches and relevant executives, was fined a total of 1.22 million yuan for failing to use approved insurance clauses and for falsifying expenses.
Founded in February 2007, Modern Insurance was initially a wholly-owned subsidiary of Korea's Hyundai Marine & Fire Insurance Co., Ltd. In 2020, the entry of Lenovo and Didi, which together acquired a 64% stake, broke the single-foreign-shareholder structure and ushered the firm into a "Sino-foreign joint venture" era. Following the introduction of industrial and technology-focused shareholders, Modern Insurance's premium scale grew rapidly, but its profitability remains under severe pressure. From 2021 to 2025, the company accumulated losses exceeding 500 million yuan, and in the first quarter of 2026, it still posted a loss of 10.94 million yuan. Hit simultaneously by a fine and deepening losses, where is Modern Insurance getting stuck?
Violations for Falsified Expenses and Unauthorized Clauses: Modern Insurance and Responsible Parties Fined 1.22 Million Yuan
According to regulatory disclosures, the penalties against Modern Insurance involve its head office, two branches, and four responsible individuals. The violations include failing to use approved insurance clauses and falsifying expenses. Specifically, the Beijing Regulatory Bureau fined the head office 250,000 yuan, the Sichuan branch 450,000 yuan, and the Hubei branch 300,000 yuan. Responsible persons Piao Haiyan, Xie Wei, Ye Cheng, and Liu Weiwei were issued warnings and fined 50,000 yuan, 80,000 yuan, 40,000 yuan, and 50,000 yuan respectively, totaling 1.22 million yuan.
Headquartered in Beijing, Modern Insurance also has branches in Shandong, Guangdong, Hubei, and Sichuan provinces. The company states that its operating lease passenger car premiums rank in the top three in these regions, and nationally, it ranks among the top ten in the same segment. It claims that its auto insurance policies, including self-incurred costs, have achieved full-cost profitability, validating the sustainability of its specialized vertical track model. The fined Sichuan and Hubei branches are both in key expansion areas for the company.
Regarding the penalty, Modern Insurance stated the issues arose from operational execution problems at certain branches and are not directly related to its overall strategy of focusing on new energy vehicle (NEV) ride-hailing insurance. The company acknowledged that the penalties exposed a tendency in some branches to prioritize business expansion over compliance control, revealing weaknesses in the head office-to-branch internal controls. It said it takes the matter seriously, accepts the penalties, has completed internal accountability for those responsible, and has implemented comprehensive corrective measures. This is not the first fine for a branch; in September 2025, the Guangdong branch was fined 350,000 yuan for inaccurate financial data and failing to implement approved insurance clauses.
Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, believes that under the strict "integration of reporting and execution" regulatory environment, branches may easily cross the line on clause execution and expense reporting while competing for market share and scale. Falsified expenses often lead to channel rebates and inflated operating costs, while unauthorized clauses undermine actuarial pricing foundations. Yu Fenghui, a special researcher at the China Financial Think Tank, suggested that for property insurers to balance scale and compliance, the key is to embed compliance into business performance indicators rather than treating them as separate. He argued that both the loss ratio and expense ratio must be tied to the performance contracts of branch heads, with rigid constraints like demotion for crossing compliance red lines replacing soft guidance.
Looking ahead, Modern Insurance said it will optimize its compliance management system by integrating compliance requirements into its corporate governance, operational structure, and business processes. It plans to strengthen head office-to-branch compliance management, increase the frequency of internal branch inspections, enforce accountability mechanisms, and conduct regular compliance training, especially for frontline, financial, and management staff.
Two Strategic Pivots Hit Market Trends, But Five Years of Premium Growth Fail to Yield Profit
Beyond the fine, Modern Insurance has undergone two major business structure adjustments in the past five years, yet profitability remains elusive. Before 2020, as a purely foreign-funded insurer, it primarily served Korean companies in China, maintaining a small but stable business scale with annual premiums hovering around 200 million yuan. From 2017 to 2020, its net profits were 8.21 million yuan, 23.29 million yuan, 16.09 million yuan, and 21.05 million yuan respectively. During this period, enterprise property insurance was its dominant line, with premiums of 59.04 million yuan, 55.40 million yuan, 74.04 million yuan, and 84.47 million yuan, consistently ranking first.
After introducing Lenovo and Didi, leveraging their internet and traffic advantages, Modern Insurance made its first major strategic pivot, aggressively entering the short-term health insurance market. In 2021 and 2022, premiums from this line reached 180 million yuan and 164 million yuan respectively, making it the top business for two consecutive years. In 2023, the company made a second adjustment, shifting from health insurance to auto insurance, specifically targeting the NEV ride-hailing segment. By 2023, among its top five lines, motor vehicle insurance, liability insurance, and short-term health insurance contributed 199 million yuan, 190 million yuan, and 140 million yuan in gross premiums respectively. While health insurance premiums declined, motor vehicle and liability insurance saw significant growth. From 2023 to 2025, the proportion of auto insurance premiums in total scale was 25%, 52%, and 58%, while health insurance's share dropped to 18%, 4%, and 1%.
These two adjustments fueled continuous premium growth. From 2021 to 2025, Modern Insurance's premium scale was 536 million yuan, 671 million yuan, 798 million yuan, 1.073 billion yuan, and 1.137 billion yuan, representing year-on-year growth of 135.09%, 25.19%, 18.93%, 34.46%, and 5.96%. However, the income statement told a different story. Over the same period, net losses were 142 million yuan, 61 million yuan, 107 million yuan, 163 million yuan, and 66 million yuan, totaling a cumulative loss of 539 million yuan. In the first quarter of 2026, insurance business revenue was 314 million yuan, up 38.33% year-on-year, but a loss of 10.94 million yuan persisted, though it narrowed by 17.1 million yuan compared to the previous year.
Modern Insurance attributes the pressure of premium growth without corresponding profit to a combination of factors, including the market environment, sector characteristics, and strategic investments. It claims that as its strategy deepens, operational efficiency is clearly improving. Financial reports show that rising claims payouts are one reason for the mismatch between net profit and premium income. From 2021 to 2023, claims payouts were 235 million yuan, 345 million yuan, and 476 million yuan, while commission and brokerage expenses were 59 million yuan, 105 million yuan, and 112 million yuan. The combined ratio for those years was a high 149.95%, 137.98%, and 140.2%. However, this metric has improved significantly, dropping to 131.44% in 2024 and 113.67% in 2025, and further to 105.84% in the first quarter of 2026. Modern Insurance stated that since establishing its vision in 2023 to become a "risk management expert for the new mobility ecosystem," it has been working to clear legacy risks, improve losses, and advance strategic execution, capacity building, and business structure optimization, leading to sustained operational improvements.
With Shareholder Support and Management Reshuffle, When Will Modern Insurance Turn the Corner?
The NEV ride-hailing market is massive and growing rapidly, but traditional insurers are generally cautious about this segment, creating a clear supply gap. Modern Insurance's "industry + insurance" model can be seen as a differentiated breakthrough. The company states that its three major shareholders—Hyundai Marine, Didi, and Lenovo—are continuously engaging in multi-level ecological collaboration, empowering its differentiated development through scenarios, technology, and industry. Going forward, it will solidify these normal coordination mechanisms to leverage its resource advantages and build a stronger competitive moat.
In recent years, Modern Insurance has also seen significant management changes. In December 2024, Zhang Zongtao, who has extensive regulatory and market experience, was approved as the new general manager, taking full charge of operations. Zhang, born in 1973 with a master's degree, has worked at the People's Bank of China, the former China Insurance Regulatory Commission, Huatai Property Insurance, and Huanong Property Insurance, serving as deputy general manager at Huatai and general manager and director at Huanong. In March 2025, Korean chairman Cho Yong-il, who had served for over 15 years, resigned due to age. In July of the same year, another Korean executive, Hong Ling, who previously oversaw overseas business at Hyundai Marine & Fire Insurance, took over. Additionally, in July 2026, Wang Xin, born in 1979 with a master's degree and experience at PICC and Beijing Didi Infinity Technology Co., Ltd., was approved as assistant general manager.
The current senior management team at Modern Insurance shows several distinct characteristics: first, a trend toward youth, with "post-80s" executives making up 60% of the team; second, diversity, including representatives from the Korean shareholder, local Chinese executives with market experience, and tech talent from internet backgrounds. The company explained that the team's composition is closely aligned with its long-term strategy focused on the mobility ecosystem, based on three considerations: meeting the collaborative governance needs of diverse shareholders; requiring composite talent with both traditional insurance experience and digital thinking for the NEV insurance sector, which blends insurance, vehicle technology, and big data; and building a talent pipeline that combines experience and youth to better adapt to the tech-driven niche market and embrace product innovation and digital transformation.
However, the challenges for Modern Insurance's management team are equally clear. As premium scale continues to expand, reversing persistent losses and restoring profitability will be the core test of the current management's capability. For future development, Modern Insurance stated that in the short term, it will maintain strategic focus, deepen its presence in the mobility sector, continuously optimize its business structure, tightly control operating costs, and improve financial results. Over the medium to long term, it will adhere to a specialized and differentiated development path, cultivating a "second growth curve" alongside its core niche to amplify the driving value of its core capabilities.
The NEV insurance track is in its early stages. According to a McKinsey industry forecast, by 2030, NEV insurance premiums are expected to reach around 480 billion yuan, accounting for over 40% of total auto insurance premiums, becoming the core growth driver. Modern Insurance holds three cards—shareholder resources, first-mover advantage, and premium growth momentum—giving it an edge in this race. However, it still needs to clear the hurdles of risk control, profitability, and compliance. Do you see a bright future for Modern Insurance? Share your thoughts in the comments.
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