Investors who continue to pay attention to the fundamentals of insurance stocks may be disappointed again.
As of February 17, the five major A-share insurance companies have disclosed the premium in January. According to the statistics of the reporter of Securities Daily, Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , China Pacific Insurance (Group) Co.Ltd(601601) , The People’S Insurance Company (Group) Of China Limited(601319) , New China Life Insurance Company Ltd(601336) the original premium in January (hereinafter referred to as “premium”) totaled 571.96 billion yuan, an increase of only 1.86% year-on-year. In terms of business, the growth rate of life insurance premiums, accounting for nearly 80% of the premiums of the five major insurance companies, is still sluggish. Although the growth rate of property insurance premiums shows signs of recovery, it does not play an obvious role in driving the industry premiums.
In China’s insurance market, the five listed insurance companies have a high market share and are the wind vane of the development of the industry. Their premium growth rate in January over the years is particularly valued by the industry. However, in January this year, the total premium growth rate of the five listed insurance companies hit a new low in nearly four years. According to the reporter’s combing, from 2019 to 2022, the year-on-year growth rate of the total premiums of the five listed insurance companies in January over the years was 14.3%, 6.4%, 6.26% and 1.86% respectively. On the whole, the growth rate had an obvious downward trend in the past four years.
Senior actuary Xu Yuchen and other insiders analyzed the reporter of Securities Daily that the sluggish growth rate of the five listed premiums in January this year was related to the following reasons: first, the high premium base in January last year brought certain pressure to the growth rate of premiums this year; Second, the development of life insurance industry depends on offline channels, and the continuous and repeated epidemic has an impact on the development of insurance enterprises; Third, the slowdown of macroeconomic growth and weak consumer demand have affected the growth rate of industry premiums from the demand side; Fourth, the loss of insurance marketers has affected the production capacity of life insurance companies.
the life insurance industry is still under heavy pressure
According to the reporter of Securities Daily, in January this year, the premium income of China Life Insurance Company Limited(601628) , Ping An Insurance (Group) Company Of China Ltd(601318) , The People’S Insurance Company (Group) Of China Limited(601319) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) was 207.2 billion yuan, 136.486 billion yuan, 115.512 billion yuan, 76.895 billion yuan and 35.868 billion yuan respectively, with a year-on-year increase of – 5.34%, 1.21%, 17.89%, 2.29% and 3.57% respectively.
In terms of business, China Life Insurance Company Limited(601628) and New China Life Insurance Company Ltd(601336) do not operate property insurance business, Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , The People’S Insurance Company (Group) Of China Limited(601319) operate both life insurance business and property insurance business. Overall, in January this year, life insurance premiums accounted for nearly 80% of the total premiums of listed insurance companies, which is also a decisive factor affecting the growth of industry premiums.
From the perspective of the life insurance business of listed insurance companies, in January, the premiums of China Life Insurance Company Limited(601628) , Ping An Life, CPIC life, PICC Life and New China Life Insurance Company Ltd(601336) were 207.2 billion yuan, 98.6 billion yuan, 55.9 billion yuan, 46.6 billion yuan and 35.9 billion yuan respectively, with a year-on-year increase of – 5.34%, – 0.6%, – 1.06%, 30.17% and 3.57% respectively. Overall, the life insurance premiums of the five insurance companies totaled 444.168 billion yuan, down 0.19% year-on-year, continuing the downturn last year.
In this regard, Zhao Yao, an analyst at Guosheng securities, said that the pressure on the liability side of life insurance is significant, and no obvious signs of improvement have been seen at present.
From the perspective of sales, the relevant person in charge of the marketing department of a listed insurance enterprise Beijing Branch told reporters that the sales of new single premiums this year is still very difficult, there are not many popular products on the market, and the products of various insurance enterprises are quite homogeneous, and the performance pressure of grass-roots salespeople is not small. At the same time, since this year, the company’s marketers have also continued to lose, which has an impact on the growth of product scale. Relatively speaking, the performance growth of business personnel for high-end customers is good, but these businesses do not account for a high proportion of the total premium.
For the difficulties and reasons for the development of life insurance companies at this stage, Cheng Yonghong, general manager of Taiping Life Insurance, said that the main factors behind involve the supply and demand ends of the industry. On the supply side, the demographic “dividend” of the industry disappears, and the environment for increasing staff becomes difficult. On the demand side, customers’ basic needs are gradually met, and the competition gradually enters the “Red Sea”.
It is noteworthy that the weak supply and demand of the life insurance industry may continue to affect the growth of the industry’s premium. Moody’s recent report believes that Chinese life insurance companies will face low yield and weak high profit margin policy sales in 2022, and the premium growth of life insurance companies will remain weak in the next 12 to 18 months, mainly due to the decline of insurance demand, Limited sales activities, reduction of agent scale, and stricter supervision of product characteristics and sales methods.
property insurance recovered, but its boosting effect was limited
Unlike the life insurance business, the growth rate of property insurance premiums showed obvious signs of recovery in January.
According to the reporter’s statistics, the premiums of PICC Property Insurance, Ping An Property Insurance and CPIC property insurance in January were 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. The total premium of the “old three” in January was 114.2 billion yuan, a year-on-year increase of 11.96%, showing an obvious recovery trend.
However, the proportion of property insurance premium in listed insurance companies and even the whole industry is not high. Therefore, its pulling effect on listed insurance companies and the overall premium of the industry is not obvious.
It is noteworthy that the non auto insurance business performed well in January and is expected to continue to promote the growth of property insurance premiums of listed insurance companies. According to the data disclosed by PICC Property Insurance, in January, its non auto insurance premium income was 32.848 billion yuan, a year-on-year increase of 13.2%, accounting for 54.6% of the total premium. The proportion of non auto insurance business premium has exceeded that of auto insurance business by 9.2 percentage points. On the whole, after the comprehensive reform of auto insurance, the proportion of PICC Property Insurance in the field of non auto insurance business has further expanded, becoming a strong driving force for the growth of premium.
In fact, as early as the comprehensive reform of auto insurance, listed insurance enterprises have arranged non auto insurance business one after another. Shi Liangxun, executive deputy general manager of Ping An Property Insurance, previously said that in the future, the company will focus on the in-depth layout of health and travel in the field of non vehicle insurance. From the perspective of the health insurance market, it is expected to grow to 2 trillion yuan by 2025. The large-scale market requires insurance enterprises to develop and design more high-quality products. From the perspective of travel field, many products and guarantee services in the current market are not rich. The company will focus on designing some products and services that better meet the needs of users.
From the perspective of the industry, a large number of insurance enterprises have begun to increase the non auto insurance business. Zhu Yaming, CEO of AXA Tianping property insurance, recently said that at present, auto insurance has entered the transformation deep-water area, and property insurance companies have accelerated the layout of non auto insurance business represented by health insurance, while the operation of non auto insurance business tests the comprehensive ability of insurance companies to underwrite and settle claims.
In the view of insiders, the operational risks of non auto insurance business are also relatively diversified. It remains to be seen whether it can continue to promote the growth of property insurance profits of listed insurance companies in the future.
