In February, the position attitude of northbound capital towards insurance stocks showed significant changes.
According to the statistics of China stock market news chioce, in January, northbound capital increased its positions in five major A-share insurance stocks ( Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , The People’S Insurance Company (Group) Of China Limited(601319) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) ). However, in February, the attitude of northward capital positions was divided, and Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) and China Pacific Insurance (Group) Co.Ltd(601601) , which account for a large proportion of life insurance business, were reduced; At the same time, The People’S Insurance Company (Group) Of China Limited(601319) , which has a high proportion of property insurance business, will continue to increase its positions significantly.
In this regard, industry insiders said that this was related to the fact that the “good start” data of the life insurance industry in January this year was less than expected, and there were signs of recovery in the property insurance business.
foreign insurance stocks with a high proportion of reduced position life insurance
Since the sharp decline of insurance stocks last year, the advantage of undervaluation has become prominent, prompting foreign investors to buy insurance stocks intensively in January. According to the statistics of the reporter of Securities Daily, as of January 31, the shareholding of foreign capital in The People’S Insurance Company (Group) Of China Limited(601319) , China Life Insurance Company Limited(601628) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) increased by 23%, 6%, 5%, 4% and 3% respectively compared with December 31 last year, showing an overall trend of increasing positions.
In February, there was differentiation in the shareholding strategy of foreign capital in insurance stocks. As of February 28, the shareholding of foreign capital in The People’S Insurance Company (Group) Of China Limited(601319) , New China Life Insurance Company Ltd(601336) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , China Pacific Insurance (Group) Co.Ltd(601601) , China Pacific Insurance (Group) Co.Ltd(601601) 601 increased by 11%, 8%, – 1%, – 4% and – 5% respectively compared with January 31.
In fact, the foreign position adjustment strategy echoes the performance of insurance stocks in January. According to the data, 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) in January was 207.2 billion yuan, 136.5 billion yuan, 115.5 billion yuan, 76.9 billion yuan and 35.9 billion yuan respectively, with a year-on-year increase of – 5.34%, 1.21%, 17.89%, 2.29% and 3.57% respectively. It can be seen that the growth rate of The People’S Insurance Company (Group) Of China Limited(601319) and New China Life Insurance Company Ltd(601336) premiums is relatively fast, while the growth rate of the remaining three companies is relatively slow.
As the premium of PICC Property insurance accounts for a relatively high proportion of the total premium of The People’S Insurance Company (Group) Of China Limited(601319) , it effectively drives the premium growth of The People’S Insurance Company (Group) Of China Limited(601319) . However, Ping An Property Insurance and CPIC property insurance accounted for a relatively low proportion of the total premiums of Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) respectively, so they failed to produce an effective pull.
Xu Yuchen, a founding member of the China Association of actuaries, told reporters that in January, affected by factors such as the high premium base last year and the downward macroeconomic growth rate, the growth rate of life insurance premiums continued to be under pressure. Whether the premium growth rate can rebound in the future depends on key factors such as whether the epidemic will continue to impact the insurance industry and whether the consumption level of residents can recover. In addition, although the auto insurance business has shown signs of recovery, it remains to be seen whether it can maintain a high growth rate in the future.
industry premium end improvement still needs time
Although the position adjustment of foreign institutions has reference value, the market will pay more attention to the future trend of insurance stocks.
Among the many factors affecting the trend of insurance stocks, the performance of listed insurance companies in 2021 to be disclosed will undoubtedly have an impact on the short-term trend of insurance stocks. From the prediction of securities companies, it is expected that the net profit of listed insurance companies may still have a low growth rate in 2021.
Guotai Junan Securities Co.Ltd(601211) analyst Liu Xinqi believes that in 2021, due to the weaker contribution of investment income caused by the weakness of the equity market and the slight slowdown of the downward trend of the 750 day treasury bond yield curve, the provision for reserves was lower than expected year-on-year. It is expected that the growth rate of net profit attributable to the parent company of each listed insurance enterprise will slow down, except that Ping An Insurance (Group) Company Of China Ltd(601318) is subject to the great pressure of impairment provision at the investment end, In addition to the expected negative growth, other listed insurance companies will achieve positive growth. It is estimated that the year-on-year growth rate of net profit in 2021 will be: The People’S Insurance Company (Group) Of China Limited(601319) (10.6%), China Pacific Insurance (Group) Co.Ltd(601601) (9.3%), New China Life Insurance Company Ltd(601336) (5.9%), China Life Insurance Company Limited(601628) (2.2%), Ping An Insurance (Group) Company Of China Ltd(601318) (- 20%).
From the factors affecting the medium and long-term trend of insurance stocks, at present, the growth rate of life insurance business of listed insurance enterprises has not improved significantly. Although the growth rate of property insurance business shows signs of rebound, it has no obvious pulling effect on the growth rate of premiums of listed insurance enterprises. Based on this, the management of many insurance companies and relevant research institutions believe that at present, the industry still faces many challenges and difficulties to overcome, and the improvement of the liability side (premium side) still takes time.
For example, New China Life Insurance Company Ltd(601336) Chairman Xu Zhibin said at the 2022 annual work conference that in the face of the current market environment and unprecedented challenges, we must fully understand the complex situation of the accelerated evolution of the demand side and supply side pattern of the life insurance industry and the vitality bred in the crisis, and be prepared to deal with it.
Cui Xiaoyan, an analyst at Huajin securities, believes that the main product of the “good start” of the life insurance industry this year is a large-scale product based on “annuity + universal”, with a low value rate. In addition, there is no inflection 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.
Although there is no sign of bottom rebound in the industry, many people in the industry believe that the worst may be over. The relevant person in charge of the asset management department of Kunlun Health Insurance told reporters that the sharp retreat of insurance stocks last year was due to the poor data on the liability side. At the same time, due to the great market fluctuations on the asset side, the book losses of real estate and banking stocks were large. From this year’s point of view, the worst time of the liability side of the life insurance industry should have passed, and the asset side is also slowly improving, so there will be a rebound opportunity for insurance stocks this year.
