Core conclusion
Event: on February 21, 2022, the CBRC issued the notice on expanding the pilot scope of exclusive commercial endowment insurance. From March 1, 2022, the pilot area of exclusive commercial endowment insurance will be expanded to the whole country. On the basis of the original six pilot companies, endowment insurance companies are allowed to participate in the pilot operation.
In May 2021, the CBRC announced that from June 1, six companies (PICC Life, Guoshou, Taiping Life, Taibao life, Taikang Life and Xinhua Life) were allowed to carry out exclusive endowment insurance pilot projects in Zhejiang (including Ningbo) and Chongqing. The pilot operation was stable. By the end of October 2021, the six pilot companies had accumulated premium income of about 200 million yuan, and the number of insured persons exceeded 17000; By the end of January 2022, the cumulative premium income in the eight months since the pilot implementation has reached 400 million yuan, and nearly 50000 insurance policies have been underwritten, with an average premium of about 8000 yuan; Nearly 10000 employees of new business formats such as express delivery workers and online car Hailing drivers were insured.
The form of pilot products meets the needs of elderly care, and the settlement interest rate in 2021 is outstanding. The exclusive old-age insurance products launched by the six pilot companies are slightly differentiated in form, mainly covering: 1) different coverage: in addition to death, some products cover the protection of severe disability, serious illness and total disability; 2) Different insurance age, receiving age and payment period; 3) Different minimum interest rates: accounts are divided into two types: steady and aggressive. The minimum interest rates of the two types of accounts are 2% – 3% and 1% – 0% respectively; In 2021, the settlement interest rate showed a bright performance. The steady and aggressive interest rates of the pilot products were 4.5% – 6% and 5% – 6.1% respectively.
The double expansion of pilot scope and participants is expected to drive the growth of premium scale. 1) The scope of the pilot project will be expanded from two cities to the whole country: in 2020, the resident population of Chongqing and Zhejiang will be 96.77 million, and the product penetration rate is roughly estimated to be about 0.05%. Without considering policy promotion and other factors, according to the pilot project, the product premium scale will be about 5.7 billion yuan after being extended to the whole country; 2) The participants have expanded to 10 pension insurance companies, which is expected to further enrich the product supply.
Large scale and large-scale products need further policy support. After the implementation of the new regulations on asset management, the characteristics and advantages of guaranteed minimum income of exclusive endowment insurance products are more prominent. However, at present, the third pillar is still in the stage of account laying, which does not involve tax preferential policies and has limited attraction; Most of the products are basic, facing the sinking market, and various insurance companies may take some measures to make profits to customers in order to improve the coverage. It is expected that nbvm is low (we estimate it to be about 10%), and the premium scale and value contribution in the first stage of promotion are relatively limited.
In the long run, the demand for old-age security is broad and is expected to leverage the trillion market. We believe that the competitiveness of insurance companies in related fields is mainly reflected in three aspects: 1) investment ability: maintaining long-term and stable investment income will help the company attract more customers; 2) Sales ability: strong sales ability will improve the ability of contacting customers and the efficiency of getting customers; 3) Service capability: perfect value-added services such as medicine and health care will help insurance enterprises build differentiated advantages and improve customer stickiness in the competition with peers, bank financial management and public offering products. Head insurance companies have obvious first mover advantages in this field due to their perfect business layout and strong investment ability. It is suggested to pay attention to Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , China Life Insurance Company Limited(601628) with perfect business layout.
Risk tips: policy risk, interest rate risk, market fluctuation risk, demand less than expected.
