Key investment points:
Event:
Listed insurance companies released the data of original insurance premium income in January.
\u3000\u3000 China Life Insurance Company Limited(601628) ：
In January, the company realized an original insurance premium income of about 207.2 billion yuan, a year-on-year decrease of 5.34%.
\u3000\u3000 Ping An Insurance (Group) Company Of China Ltd(601318) ：
In January, the company realized a premium income of 136.486 billion yuan from the original insurance, a year-on-year increase of 1.21%. Among them, Ping An Life + Ping An pension + Ping An Health achieved a total premium income of 103.699 billion yuan, a year-on-year decrease of 0.81%, and Ping An Property Insurance achieved a premium income of 32.787 billion yuan, a year-on-year increase of 8.21%.
\u3000\u3000 The People’S Insurance Company (Group) Of China Limited(601319) ：
In January, the company realized an original insurance premium income of 115.512 billion yuan, a year-on-year increase of 17.89%. Among them, PICC Property Insurance realized a premium income of 60.432 billion yuan, a year-on-year increase of 13.78%; PICC Life Insurance realized a premium income of 46.619 billion yuan, a year-on-year increase of 30.16%; PICC Health realized an original insurance premium income of 8.461 billion yuan, a year-on-year decrease of 6.6%.
\u3000\u3000 China Pacific Insurance (Group) Co.Ltd(601601) ：
In January, the company realized a premium income of 76.895 billion yuan, an increase of 2.29% year-on-year. Among them, CPIC life insurance realized a premium income of 55.884 billion yuan, a year-on-year decrease of 1.13%; CPIC property insurance realized a premium income of 21.011 billion yuan, a year-on-year increase of 12.7%.
\u3000\u3000 New China Life Insurance Company Ltd(601336) ：
In January, the company realized a premium income of 35.868 billion yuan, a year-on-year increase of 3.58%.
Comments are as follows:
Restricted by various factors, the original premium income of life insurance in January continued to be under pressure. The total premium income of the five listed insurance companies in January decreased by 0.26% year-on-year. The continued pressure on life insurance in January is in line with expectations, and the possible constraints are as follows: 1) the industry is still in the transition period, and the continuous contraction of the agent team in 2021 still has a negative impact on the marketing force during the “good start” period in 2022; 2) The Spring Festival in 2022 is 10 days earlier than last year, and the working hours of “a good start” in January are significantly squeezed by the spring festival than last year; 3) In January, the situation of epidemic prevention and control was grim, and the “good start” offline marketing activities were limited by epidemic prevention measures; 4) In the same period of 2021, the new and old definitions of serious diseases switched, resulting in a high base last year; 5) The downward pressure on the economy is great, and the demand for residents’ insurance is still weak. It is expected that the low base after March may lead to the year-on-year improvement of the original premium income of life insurance.
In January, there was a certain differentiation in the growth rate of original premium income of life insurance between insurance enterprises. The growth rate of the original premium income of life insurance of listed insurance companies in January is as follows: PICC Life (+ 30.16%) > New China Life Insurance Company Ltd(601336) (+ 3.58%) > Ping An Life + Ping An pension + Ping An Health (- 0.81%) > CPIC life (- 1.13%) > China Life Insurance Company Limited(601628) (- 5.34%). The original premium growth of PICC Life Insurance in January was significantly higher than that of its peers, mainly driven by its single long-term insurance (year-on-year + 136.6%), but it was noted that its long-term insurance decreased by 13.5% year-on-year, which means that the rapid growth of PICC Life Insurance Premium in January was mainly caused by the large-scale expansion of low-value single payment business, which is sustainable or difficult to guarantee, and is expected to make a small contribution to the overall value; The long-term payment of high-value long-term insurance still faces downward pressure together with the industry, and the new long-term insurance orders in January decreased year-on-year.
Property insurance premiums maintained a good growth momentum driven by auto insurance. In January, the total original premium income of the three property insurance subsidiaries increased by 11.93% year-on-year, PICC Property Insurance (+ 13.78%) > CPIC property insurance (+ 12.67%) > Ping An Property Insurance (+ 8.21%). From the perspective of trend, the growth rate of property insurance premium income may have returned to normal driven by automobile insurance. In October 2021, the year-on-year growth rate of premium income of the three property insurance subsidiaries changed from negative to positive. From October 2021 to January 2022, the premium income of the three property insurance subsidiaries continued to grow. It is noted that the premium income of leading PICC Property Insurance has achieved double-digit growth for three consecutive months, indicating that the current property insurance industry is in a good trend with high gold content. It is expected that the improvement trend of property insurance premium in the future is expected to continue.
Investment suggestion: since the fourth quarter of 2021, there have been some positive changes in the asset liability side of insurance enterprises. Asset side: 1) since the fourth quarter of 2021, the financing supervision of real estate developers has been corrected, the purchase policy has been relaxed, the financing environment of real estate enterprises has been improved, and the concerns about potential credit risks on the asset side have been alleviated; 2) The yield of 10-year Treasury bonds rebounded after the Spring Festival, and the loose monetary policy came to an end temporarily. It is expected that the long-term interest rate is expected to rise and the asset-side yield may improve in the second half of the year as the economy stabilizes. Liability side: the phased goal of comprehensive reform of automobile insurance has been completed, and the property insurance premium has maintained positive growth for four consecutive months driven by automobile insurance, and the good growth momentum is expected to continue. However, subject to the impact of various factors such as the contraction of the agent team, the main contradiction on the liability side – life insurance income has not improved. The original premium income of life insurance still decreased year-on-year in January, and the expected growth is still under pressure. After March, the low base may lead to the improvement of the growth rate of life insurance premium income. From the perspective of valuation level, the current PEV valuation level of listed insurance companies is at a historically low level. They believe that the sector has high allocation value and give an investment rating of “stronger than the market” for the first time.
Risk warning: credit risk spreads widely, and the premium income is lower than expected.
