The “good start” of life insurance in 2022 does not seem to bring much warmth to the industry in deep adjustment.
As of February 20, the seven listed insurance companies in the A-share and H-share markets have announced the premium income in January. The first financial reporter found that although their total premium income increased by 1.93%, the growth rate of 11.44% of property insurance was the main contributor, while the life insurance premium included in endowment insurance and health insurance showed a negative growth of 0.1%.
From the perspective of the premium income of the seven listed life insurance companies, there has been an obvious differentiation of “three rises and four falls”. However, according to the analysis of insiders, some insurance companies with a sharp increase in premium income mainly adopt the strategy of single payment products to impact the scale during the “good start”, and the contribution of new business value of these products is low, Therefore, the new business value of listed insurance companies in the first quarter will be generally under pressure.
premium trend differentiation of listed life insurance companies
According to the premium announcement of the seven listed insurance companies in the A-share and H-share markets, the seven listed insurance companies achieved a total premium of 621.4 billion yuan in January.
From the perspective of listed insurance companies, The People’S Insurance Company (Group) Of China Limited(601319) , Zhong’an online and Hubei Biocause Pharmaceutical Co.Ltd(000627) Guohua life insurance have achieved double-digit growth. The premium of China Life Insurance has increased by 59.66% year-on-year, while the premium income of China Life Insurance Company Limited(601628) and China Taiping has a negative growth of 5% year-on-year.
Although listed insurance companies have maintained a rise of nearly 2% in terms of total premiums, if the total premiums are divided into life insurance companies and property insurance companies, it will be found that the increase of nearly 2% is all contributed by the growth of 11.44% of property insurance. However, the transformation of listed life insurance companies has not entered the income period, and the premium income has not achieved positive growth, In the “good start” period, which was highly expected in previous years, it fell slightly by 0.1%. Among them, the premiums of the five major A-share listed life insurance companies ( New China Life Insurance Company Ltd(601336) , Ping An Life Insurance, CPIC life insurance, China Life Insurance Company Limited(601628) , PICC Life Insurance), which account for a large scale of the market, decreased by nearly 0.4% year-on-year after taking into account the premiums of pension and health insurance, while the five major listed life insurance companies reaped a year-on-year increase of more than 8% in January last year. It can be seen that for listed life insurance companies, this year’s “good start” is generally not very popular.
Source: first finance combed according to public data
Industry insiders generally analyzed that the decline in the manpower scale of marketers, the high base and insufficient demand caused by the release of severe disease demand at the beginning of last year, the late start of last year’s performance in order to sprint last year, the weakening of supervision and guidance and other reasons jointly led to the “good start” of this time.
However, the premium trend of listed life insurance companies showed obvious differentiation in January this year. The premiums of Guohua life insurance, PICC Life Insurance and Xinhua life insurance increased by 59.66%, 30.16% and 3.58% year-on-year respectively, while the premiums of other listed life insurance companies such as China Life Insurance Company Limited(601628) and Ping An Life Insurance showed negative growth of 0.5% ~ 6% in January.
Why such differentiation? Some life insurance companies have taken the lead in stepping from “cold winter” to “spring”? This may be related to the strategies adopted by some insurance companies in the “good start” stage. From the perspective of PICC Life Insurance, which disclosed the details of premium, its rapid growth was mainly brought by the large-scale promotion of low-value single payment business. According to the data, the single premium of PICC Life Insurance in the first year of long-term insurance in January increased by 136.6% year-on-year, while the regular premium decreased by 13.5% year-on-year.
Compared with regular insurance policies, single insurance policies are usually large-scale products and are expected to contribute less to value. Therefore, the increase of premium does not mean the increase of new business value, an important indicator in life insurance valuation. Haitong Securities Company Limited(600837) believes that considering the adjustment of the product structure of life insurance companies in 2022, the difficulty of serious illness sales has increased significantly, and the proportion of savings has expanded, it is expected that the growth pressure of new business value is greater than that of new orders.
Kaiyuan Securities said that considering that the business operation rhythm is affected by the Spring Festival holiday, it is expected that the probability of year-on-year improvement of the value of new orders in February is low. In addition, as the main products sold by insurance enterprises are mostly large-scale products, the value rate is relatively low, and the value of new orders is year-on-year or under pressure. It is expected that the value of new orders of insurance enterprises will be in the range of – 30% to – 20% year-on-year in the first quarter of 2022.
“This year’s’ good start ‘makes me feel too much.” A senior agent of a large life insurance company told the first financial reporter. From his observation, different from previous years, this year’s “good start” shows polarization. High net worth customers have a strong desire to buy insurance and will take the initiative to ask for it; However, ordinary customers or customers who previously purchased savings type insurance for the purpose of asset allocation, with the impact of the epidemic on their income, their willingness to increase insurance is not strong, and there may even be insurance reduction or surrender. At the same time, the centralized release of demand caused by the “million medical insurance”, “Huimin insurance” and the switching of serious illness insurance last year also had a great impact on serious illness insurance and other traditional life insurance products.
“At present, all large insurance enterprises are undergoing transformation, but they are still in the throes of transformation and have not seen obvious results. Although they are still optimistic about the insurance industry in the medium and long term, it is still unknown when all large insurance enterprises will get out of the cold winter in the short term. We should observe the process of transformation.” A senior industry analyst told the first financial reporter.
auto insurance premium exceeded expectations
Compared with the dismal of life insurance, property insurance has ushered in a good year.
Five listed property insurance companies achieved a total premium of 119.162 billion yuan in January, with a year-on-year increase of 11.44%. Among them, only the premium of Taiping property insurance showed a negative growth of 5% in January. Ping An Property Insurance, CPIC property insurance, PICC Property Insurance and Zhong’an insurance all achieved a year-on-year increase in the premium income of property insurance, and the premiums of the latter three reached double-digit growth.
Industry analysts generally believe that the higher than expected growth of auto insurance premiums led to the rapid rise of property insurance premiums in January. PICC Property Insurance data showed that its auto insurance premium income in January was 27.584 billion yuan, a year-on-year increase of 14.5%.
Guotai Junan Securities Co.Ltd(601211) believes that the higher than expected growth rate of auto insurance premium is mainly due to three factors: in the same period last year, due to the low industrial risk premium at the initial stage of the implementation of comprehensive reform, the base of average auto premium was low, and the risk premium in some regions rebounded in subsequent months; At the beginning of the year, small underwriting loss pressure and rapid business expansion of small and medium-sized insurance enterprises led to the improvement of the overall growth rate of the industry and the good start effect of property insurance. Kaiyuan Securities believes that the listed leading insurance companies have obvious advantages in service, pricing and data after the comprehensive reform of auto insurance, and the market pattern is optimized. Therefore, the improvement of the concentration of auto insurance market also increases the auto insurance premiums of listed insurance companies; At the same time, the increase in sales of new energy vehicles may also increase the average vehicle premium to a certain extent.
However, according to the prediction of many industry analysts, the double-digit growth of auto insurance may not be sustainable, but the annual premium of auto insurance in 2022 will still increase with the growth of car ownership, or between 6% and 8%.
In terms of non auto insurance, PICC Property Insurance achieved an increase of more than 15% in accidental injury health insurance, agricultural insurance and liability insurance in January. Behind the year-on-year high growth of health insurance premium income of property insurance companies, low-cost standardized medical insurance is accelerating to be recognized by consumers, and the potential of health insurance market is still growing.
From last year’s situation, the high comprehensive cost rate of non auto insurance has always been a major problem perplexing large property insurance companies. Guotai Junan Securities Co.Ltd(601211) said that it is expected that head insurance companies will mainly focus on improving their profitability by actively adjusting their business structure and controlling the expansion speed of low-profit tob businesses. According to the data, the non auto insurance premium income of PICC Property Insurance in January increased by 13.2% year-on-year, of which the property insurance premium of low-profit enterprises decreased by 1.8% year-on-year. The adjustment of business structure is expected to be beneficial to the improvement of the comprehensive cost rate of non auto insurance.
