Recently, the performance of the insurance sector is commendable. As of the closing on February 15, The People’S Insurance Company (Group) Of China Limited(601319) rose 0.42%, China Life Insurance Company Limited(601628) fell 0.32%, China Pacific Insurance (Group) Co.Ltd(601601) fell 0.75%, New China Life Insurance Company Ltd(601336) fell 0.75%, Ping An Insurance (Group) Company Of China Ltd(601318) fell 1.15%.
The time dimension was extended. On February 11, China Life Insurance Company Limited(601628) rose by more than 8% in the session, and China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) , Ping An Insurance (Group) Company Of China Ltd(601318) , The People’S Insurance Company (Group) Of China Limited(601319) rose collectively. Moreover, the rise of stock price accompanied by the net inflow of funds reversed the previous trend of net outflow of funds and the decline of stock price. The market believes that the stock price is expected to rebound in the short term.
accelerated evolution of insurance demand side and supply side pattern
As for the overall operation status of the insurance industry, according to the data of China Banking and Insurance Regulatory Commission, the total assets of insurance companies were 24.9 trillion yuan at the end of the fourth quarter of 2021, an increase of 2.6 trillion yuan over the beginning of the year, an increase of 11.5% over the beginning of the year. Among them, the total assets of property insurance companies were 2.5 trillion yuan, an increase of 6.0% over the beginning of the year; The total assets of life insurance companies were 21.4 trillion yuan, an increase of 12.4% over the beginning of the year; The total assets of reinsurance companies were 605.7 billion yuan, an increase of 2.2% over the beginning of the year; The total assets of insurance asset management companies were 103 billion yuan, an increase of 35.4% over the beginning of the year.
We made steady progress throughout the year. In 2021, the original insurance premium income of insurance companies was 4.5 trillion yuan, a year-on-year increase of 4.1%. Compensation and payment expenditure was 1.6 trillion yuan, a year-on-year increase of 14.1%. In 2021, 48.9 billion new insurance policies were added.
At the end of the third quarter of 2021, the average comprehensive solvency adequacy ratio of insurance companies included in the statistical scope was 240%, and the average core solvency adequacy ratio was 227.3%; The comprehensive risk rating of 88 insurance companies was rated as class A, 78 insurance companies as class B, 10 insurance companies as class C and 2 insurance companies as class D.
However, the pressure can not be ignored. Focus on five A-share listed insurance companies. In 2021, the total premium income of original insurance was 2487523 billion yuan, a year-on-year increase of 0.03%.
The environment of the whole insurance market is quietly changing, and high-quality development has become a consensus. At the 2022 annual work conference of New China Life Insurance Company Ltd(601336) , its Chairman Xu Zhibin said that in the face of the current market environment and unprecedented challenges, we must fully understand the complex situation of the accelerated evolution of the demand side and supply side pattern of the life insurance industry and the breeding of vitality in the crisis. On the one hand, we should fully predict and estimate the current development situation; On the other hand, we should also see the turnaround in the accelerated evolution of the industry and the new opportunity of “old branches sprouting new buds”.
The transformation and upgrading of 5 insurance companies are accelerated. Su hengxuan, Secretary of the Party committee and President of the life insurance company, said at the company’s 2022 annual work conference that efforts should be made to maintain the double leader of scale and quality. Ensure the leading position of the market, continuously improve the quality of development, strengthen coordinated development and improve the efficiency of resource allocation.
In addition, Su hengxuan pointed out that we should vigorously promote the transformation and upgrading of the sales force. Adhere to the sales team’s steady solid quantity and steady efficiency, strengthen system operation, strengthen education and training, and consolidate basic management; We will continue to deepen reform and innovation. Pay close attention to major reform projects, key reform fields, digital innovation breakthroughs, and market-oriented incentive and restraint mechanisms; Strengthen the improvement of operation and service capacity. Refine and refine the customer experience, promote digital intensification from point to area, and further strengthen the protection of consumers’ rights and interests; Build a safety net for risk prevention and control. Continuously improve the risk management system, strengthen risk governance in key areas, and constantly innovate risk prevention and control methods.
the continuous rising market also needs to observe the performance of the liability side
In fact, in the fourth quarter of 2021, the fund has allocated additional non bank sectors. According to Liu Xinqi, chief analyst of Guotai Junan Securities Co.Ltd(601211) non bank financial industry, the insurance index stopped falling in the fourth quarter of 2021, increased by 3.89% in a single quarter, and the allocation proportion increased slightly from 0.7% to 0.74%, but it is still 1.41 percentage points lower. In terms of individual stocks, Ping An Insurance (Group) Company Of China Ltd(601318) allocation ratio increased from 0.54% to 0.59%. “The additional allocation of insurance is mainly due to the improvement of the asset side brought about by the wide credit and loose real estate policies. The insurance industry as a whole is still in the throes of reform, and it is difficult to see the improvement expectation on the liability side. Therefore, the insurance sector is more phased investment value.”
Watch as you walk. “The recent rise of the sector is mainly contributed by beta, and the asset side catalyzes the repair of valuation.” Huachuang securities research report said that, however, the core fundamentals of the industry have not changed. It is expected that the liability side is still weak in the first quarter and the first half of the year. For a period of time, the sector will still be in the bottom stage, and the inflection point of the liability side needs to be observed for the rising market.
On February 15, The People’S Insurance Company (Group) Of China Limited(601319) announced that in January 2022, the cumulative original insurance business income of PICC Property Insurance, a subsidiary of the company, was 60.432 billion yuan, a year-on-year increase of 13.78%; The accumulated original insurance business income of PICC Life Insurance was 46.619 billion yuan, a year-on-year increase of 30.16%; PICC Health’s accumulated original insurance business income was 8.461 billion yuan, a year-on-year decrease of 6.56%; The total revenue was 115.512 billion yuan, a year-on-year increase of 17.89%.
On the same day, China Pacific Insurance (Group) Co.Ltd(601601) announced that in January 2022, the accumulated original insurance business income of CPIC life insurance, a subsidiary of the company, was 55.884 billion yuan, a year-on-year decrease of 1.1%; The accumulated original insurance business income of CPIC property insurance was 21.011 billion yuan, a year-on-year increase of 12.7%; The total revenue of the company was 76.895 billion yuan, a year-on-year increase of 2.29%.
According to the announcement released by New China Life Insurance Company Ltd(601336) , in January 2022, the company’s accumulated original insurance business income was 35.868 billion yuan, a year-on-year increase of 3.58%.
In the long run, securities companies are still optimistic. CICC expects that the profit growth rate of non bank finance may be about 5% – 10% in 2022, and the insurance funds are still expected to bring an increase of about 200 billion yuan to the market in 2022. Although the life insurance and property insurance business has not improved significantly for the time being, and the long-term interest rate is still expected to decline, the growth rate of the insurance sector is expected to stabilize in 2022 under the background of low base.
“The valuation level of Chinese insurance companies has been significantly lower than that of European insurance companies and close to that of Japanese insurance companies.” CICC believes that cyclical factors, industrial structural adjustment and other factors lead to the market’s too pessimistic sentiment towards the sector. The valuation level of China’s high-quality life insurance companies has been relatively extreme. It is suggested that investors pay attention to the long-term allocation value of the sector.
CICC believes that the average compound profit growth rate of Listed Companies in the life insurance sector has reached 14.0% in the past decade, and it is expected that the sector will still achieve double-digit compound profit growth in the next decade.
provide higher quality health insurance and endowment insurance
In fact, the market is generally optimistic about the long-term development of the insurance industry. “Regulators and institutions are working hard to change the previous extensive development model of the insurance industry and explore the road of high-quality development.” A senior person in the insurance industry pointed out.
This can be seen from the recent policy guidance of the insurance regulatory department on the product side. For example, in the field of life insurance, the CBRC solicited opinions on the two new regulations of the measures for the administration of information disclosure of life insurance products (Draft for comments) and the rules for information disclosure of long-term life insurance products (Draft for comments). According to the two new regulations, life insurance companies need to disclose not only the product catalogue and terms on the official website, but also the rate table, cash value examples, product specifications, etc.
Obviously, insurance products should be sold clearly to reassure consumers. The “negative list” (version 2022) of life insurance products issued has 9 new contents compared with 2021, and 2 have been slightly adjusted, with a total of 11 contents adjusted. These include: the increasing proportion of the insured amount of increased life insurance exceeds the pricing interest rate, which is seriously misleading; The proportion of insurance reduction for increased lifetime life is unreasonable; There is a risk of breaking through the interest rate in disguised form in the insurance increase design; The statement of non guarantee of renewal in the terms of short-term health insurance products does not comply with the regulatory provisions, and there is a serious potential of misleading; The age range of medical insurance rate setting is too large, and there is a risk of unfair pricing; The calculation of the cash value of the product does not conform to the general actuarial principle, and there is a risk of long-term insurance and short-term operation.
Not only that, but also respond to the problems in the market in a timely manner. In the field of property insurance, in order to regulate the false publicity and claim settlement difficulties of “isolation insurance”, the cbcirc issued the emergency notice on regulating the operation of “isolation” allowance insurance business, which regulates the “isolation” allowance insurance business from six aspects, requiring insurance companies to correct their business philosophy, strictly manage claims, and not through deception Publicize and sell products by concealing or inducing.
Shang Jingguo, Secretary General of China Insurance Industry Association, pointed out that in 2022, China’s insurance industry will focus on people’s livelihood fields such as health and pension, and provide higher quality health insurance and pension insurance.
