Since the beginning of this year, the market performance of the insurance sector has continued to be depressed, ranking the bottom among many A-share sectors. So far, the insurance sector (Shenwan secondary industry classification) has decreased by 39.14% this year, the largest annual decline since 2011.
Insurance companies are looking for the direction of reform in the “pain”. Although the overall performance of the insurance industry is still hovering at the bottom this year, people in the industry are still optimistic about the medium and long-term development potential of the insurance industry.
insurance stocks continued to dip
At the end of 2021, the A-share insurance sector continues to fluctuate at the bottom.
As of the closing on December 22, Ping An Insurance (Group) Company Of China Ltd(601318) was reported at 50.18 yuan per share, down more than 40% from the share price at the beginning of the year. The share prices of New China Life Insurance Company Ltd(601336) , The People’S Insurance Company (Group) Of China Limited(601319) , China Pacific Insurance (Group) Co.Ltd(601601) , China Life Insurance Company Limited(601628) decreased by 30.35%, 26.36%, 25.56% and 20.38% respectively.
In the first quarter of this year, affected by the “good start” marketing launched by insurance companies in advance and the removal of old versions of seriously ill products from the shelves, the value of new orders and new businesses of insurance companies showed double-digit growth. However, after entering the second quarter, the growth rate of relevant operating data of insurance enterprises decreased significantly due to the lack of insurance agent team, early consumption of customer demand and substitution of local Huimin insurance products.
Data show that in the first three quarters of this year, listed insurance companies achieved a total premium income of 340.2 billion yuan for new orders, down 5.4% year-on-year. In terms of new business value growth, in the first three quarters, Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , China Pacific Insurance (Group) Co.Ltd(601601) and New China Life Insurance Company Ltd(601336) decreased by 17.8%, 19.6%, 25% and 30% respectively. Shenwan Hongyuan Group Co.Ltd(000166) it is estimated that the new business value of listed insurance companies will decline by more than 20% in 2021.
China Securities Co.Ltd(601066) pointed out in the research report that the performance of long-term interest rate and equity market has also had a negative impact on the valuation of insurance stocks since this year.
Affected by the lack of market confidence in the medium and long-term growth of new orders of insurance enterprises, the position of public funds holding insurance stocks is also at an absolute low in history. Shenwan Hongyuan Group Co.Ltd(000166) statistics show that by the end of the third quarter of this year, the active partial public offering of insurance stocks accounted for only 0.2%.
insurance companies take multiple measures to find a breakthrough
Facing the dual pressure of performance and stock price, insurance companies are also actively looking for the direction of reform in the “pain”.
Taking Ping An Insurance (Group) Company Of China Ltd(601318) as an example, in the face of many current challenges in life insurance reform, the management of the company said that Ping An Life Insurance is continuously deepening the reform of channels and products with the help of scientific and technological and ecological advantages. On the channel side, Ping An Life Insurance promoted the high-quality transformation of the team, layered and refined operation, and gradually promoted one “three good and five stars” evaluation standard, three-tier team differentiated operation and four digital tools to realize all-round empowerment. On the product side, Ping an actively built a medical and health ecology, deeply enabled product reform, and comprehensively laid out the product service system of “insurance + health” and “insurance + pension”.
China Life Insurance Company Limited(601628) has also continuously promoted the reform process under the strategy of “revitalizing national longevity” proposed in recent years. China Life Insurance Company Limited(601628) said that the company will make every effort to promote the professional and professional transformation of the sales force, accelerate the improvement of the professional operation ability suitable for the new customer group, accelerate the digital transformation, continue to build a digital insurance ecology, continue to promote the “big health” and “big pension” strategies, and expand and upgrade the diversified service ecosystem around “products + services”.
China Pacific Insurance (Group) Co.Ltd(601601) launched the “long voyage plan”, focusing on customer experience, upgrading the marketing team, and creating a “core” mode of high-quality development. Its Internet hospital has been opened for operation. The “Taibao blueprint” service covers more than 16 million customers, and the number of participants of “huhuibao” reaches 7.39 million.
New China Life Insurance Company Ltd(601336) put forward the “second take-off”, adhere to relying on the wealth management platform with asset management companies as the main body, give play to the linkage effect of asset end and liability end, and the scale of assets under management exceeds trillion yuan.
With regard to the many reform measures implemented by head insurance companies in recent years, Changjiang Securities Company Limited(000783) said that the profit model of insurance companies is facing remodeling, from the traditional model of “relying on channels to ask customers for profits” to the model of “comprehensively serving customers, weakening channels and asking for profits from their own operation and customer operation”.
it is expected to regain growth next year
Guotai Junan Securities Co.Ltd(601211) said that the life insurance industry is in the throes of transformation. It is expected that the performance of the whole year of 2021 and 2022 will be under pressure, and the short-term per capita capacity is insufficient to make up for the rapid decline of industry manpower.
Open source securities predicts that in terms of life insurance, companies looking for the fastest marginal improvement under low expectations will still be under pressure year-on-year in 2022 due to the decline in team size, low production capacity growth and the decline in value rate caused by product structure caused by life insurance transformation.
However, although the life insurance reform will still experience a painful “bottom grinding” process, some brokerage institutions have made optimistic predictions that the life insurance business is expected to hit the bottom and rebound next year.
Shenwan Hongyuan Group Co.Ltd(000166) securities predicts that from the third quarter of next year, insurance enterprises may have an upward inflection point of new single premium and marketing team, and the annual new single premium income is expected to show the characteristics of “low before flat”.
Guosen Securities Co.Ltd(002736) it is expected that the new single premium income of large life insurance enterprises will continue to decline in the first half of next year, but the decline is expected to slow down, and the growth trend is expected to resume after the second quarter.
China International Capital Corporation Limited(601995) believes that the inflection point of value growth of new life insurance business is expected to appear in the second half of next year, and the layout can be selected after the first quarter of next year.
(China Securities Journal)
