Overall: in January, the original premium income of listed insurance companies was – 8.55% year-on-year, and the original premium income of property insurance was + 11.42% year-on-year
January: the original premium income of life insurance business of listed insurance enterprises (TPL + Ping An Life Insurance + Guoshou + Xinhua + Taiping Life Insurance + PICC Life Insurance) totaled 440.7 billion yuan, a year-on-year increase of – 8.55%; The original premium income of property insurance business (PICC + Ping An Property + Taiping property + Taiping property) totaled 117.2 billion yuan, a year-on-year increase of + 11.42%.
Life insurance: Xinhua had the highest year-on-year increase of + 3.58% in January
January: TPL 55.9 billion yuan (YoY – 1.13%), Ping An Life 98.6 billion yuan (YoY – 0.62%), China Life Insurance Company Limited(601628) 207.2 billion yuan (YoY – 5.34%), New China Life Insurance Company Ltd(601336) 35.9 billion yuan (YoY + 3.58%), TPL 34.8 billion yuan (YoY – 5.73%), PICC Life 8.5 billion yuan (YoY – 76.38%).
Property insurance: PICC Property Insurance increased by + 13.78% year-on-year in January
January: PICC Property Insurance 60.4 billion yuan (YoY + 13.78%), Ping An Property Insurance 32.8 billion yuan (YoY + 8.21%), CPIC property insurance 21 billion yuan (YoY + 12.67%), and Taiping property insurance 2.9 billion yuan (YoY – 5.21%).
The growth of life insurance premiums was not as good as expected. The premiums of Guoshou and Ping An, which started earlier in 2022, were negative growth. In addition, the main products with a good start are large-scale products based on annuity + omnipotent, with a low value rate. The negative growth of premium may drag down the growth rate of NBV, which is lower than expected. There is no turning point in the multiple negative effects such as the loss of agents, the difficulty of improving per capita production capacity and weak terminal demand. The current results of channel reform and the expected improvement of liability side still need time. Property insurance has maintained a positive growth trend since October 2021, mainly due to the weakening impact of the comprehensive reform of vehicle insurance. In addition, the growth of new energy vehicle sales & the increase of vehicle average premium also contributed greatly.
Investment advice: since the beginning of the year, the insurance sector has risen by 4.63%, leading by – 2.78% of the Shanghai and Shenzhen 300. We believe that the reasons are as follows: 1) since the beginning of the year, the overall valuation rise of the large financial sector has driven the valuation repair of the insurance sector; 2) Asset side real estate risk was mitigated, and market concerns gradually subsided. Although the sluggish growth of life insurance premiums still suppresses the valuation of the sector to a great extent, we believe that; 1) The current valuation of the sector has fully reflected the pessimistic expectation. Under the undervalued value, the defensive allocation attribute of the sector is prominent and the safety margin is high; 2) The marginal asset valuation will be further improved. On February 10, China Fortune Land Development Co.Ltd(600340) announced that the total amount of debt restructuring signed exceeded 42.9 billion yuan, accounting for about 20% of the existing financial debt. In addition, under the background of RRR and interest rate cuts, the market liquidity is loose, and the trend of valuation recovery of large financial sectors may be sustainable. We recommend Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) based on factors such as undervaluation, improvement of investment side and promotion of channel reform. Ping An A and Taibao a2021ep / EV are 0.65x and 0.52x respectively, both at their historical lows, and both maintain the “Buy-A” rating.
Insurance Tips: continuous loss of agents, weak terminal demand, fluctuation of capital market, decline of long-term interest rate, etc.
