Event: listed insurance companies recently released premium data for January 2022.
In January, the total life insurance premiums of listed insurance companies were significantly under pressure. In January, the growth rates of total premiums of Guoshou, Ping An Life, Taibao life and Xinhua were – 5.3%, – 0.6%, – 1.1% and + 3.6% respectively (compared with + 13.1%, – 8.0%, + 8.8% and + 12.8% respectively in the same period last year). Life insurance showed a negative growth trend as a whole. In the case of the delay of the overall starting point and the sharp decline in the number of agents, it is expected that the premiums of new policies will show negative growth of different ranges. At the same time, the growth rate of renewal premiums will also decline significantly in the overall downward sales environment in recent years. The pressure on life insurance liabilities is significant, and no obvious signs of improvement have been seen at present.
The growth rate of auto insurance exceeded expectations, which led to the recovery of property insurance premiums and continued to be optimistic about the annual performance of property insurance business: in terms of property insurance business, PICC finance, Ping An finance and CPIC finance achieved a total premium income of 60.4 billion yuan, 32.8 billion yuan and 21 billion yuan respectively, with a year-on-year increase of 13.8%, 8.2% and 12.7% respectively (1.2%, – 13.2% and + 5.6% respectively in the same period last year). Property insurance premiums showed a recovery trend of different ranges, The overall growth rate is higher than expected. Taking PICC as an example, the specific types of insurance are as follows:
1) the growth rate of auto insurance was 14.5%, much higher than expected: under the background of comprehensive reform of auto insurance, 21m1 PICC realized auto insurance premium of 24.090 billion yuan, yoy-11.4%; Under the low base in the same period last year, 22m1 company achieved a premium income of 27.584 billion yuan, yoy + 14.5%. We expect that the higher than expected double-digit premium growth includes the increase of motor vehicle ownership (an increase of 6.2% in 2021), the slight increase of commercial vehicle insurance coverage and the comprehensive impact of the slight increase of some single vehicle premiums from the floor price.
2) the premium income of the company’s non auto insurance was 32.848 billion yuan, yoy + 13.2%, and the premium of credit insurance business increased significantly: non auto insurance currently accounts for 54.6% of the company’s total property insurance premium, which is basically the same year-on-year; Among them, accident and health insurance still accounted for the highest proportion, achieving a premium growth rate of 15.1% (a year-on-year growth rate of 27.1%), which decreased slightly year-on-year, and the growth rate of property insurance subsidiaries dominated by Huimin insurance decreased under the high base; In addition, the company’s credit insurance business achieved a premium income of 836 million yuan, yoy + 291.1%, achieving rapid growth under a low base, but it is expected to still focus on non financing business and the risk is more controllable, accounting for only 1.4% of the total premium.
Investment suggestion: the current premium inflection point of the property insurance sector appears, the premium growth rate and profitability will enter a cycle of continuous improvement, and is expected to continue to be verified at the data level, and the valuation is also at a low point in recent years. Individual stocks are suggested to pay attention to China property insurance h, the head company of property insurance. Although the liability side of the life insurance sector still hasn’t improved, the improvement of the investment side makes the overall fundamentals bottom up and the valuation has a very high safety margin, which is an excellent time point for long-term value allocation. Individual stocks suggest to pay attention to Ping An Insurance (Group) Company Of China Ltd(601318) with the obvious release of real estate risks and China Pacific Insurance (Group) Co.Ltd(601601) with the continuous promotion of life insurance reform; Risk warning: equity market fluctuation risk; Long term interest rate decline and real estate thunderstorm risk; Intensified property insurance competition and catastrophe risk.
