Transformation: occupy the first mover advantage, transform leading enterprises or take the lead in recovery at the debt end
With the continuous iterative upgrading of products and the emergence of covid-19 epidemic, the long-term structural problems on the liability side have been exposed, and all insurance companies have begun to accelerate the transformation to achieve high-quality development. Each company focuses on the channel and product upgrading. The “product + service” upgrading is on the way, and the high-quality team is the winner. According to our calculation, China Pacific Insurance (Group) Co.Ltd(601601) , Ping An Insurance (Group) Company Of China Ltd(601318) transformation progress is ahead, close to the bottom of manpower. Since the beginning of 2022, no sign of improvement has been observed on the liability side, and it is still in the stage of transformation, clearing and upgrading of backward production capacity; The long-term interest rate on the asset side fluctuated around 2.8%, which rebounded from the beginning of the year. The risk mitigation of the real estate chain is gradually promoted. The credit extension may lead to the rise of the long-term interest rate, and the investment side may be more flexible. Insurance companies may benefit. In the long run, all companies have paid attention to the problems of reaching customers through channels and matching the needs of products. Insurance companies are expected to lead the market by taking the lead in starting and transforming. China Pacific Insurance (Group) Co.Ltd(601601) 601 , Ping An Insurance (Group) Company Of China Ltd(601318) , which started early, made firm determination in transformation and took the lead in progress, are recommended to benefit the target AIA insurance.
Pressure: the two ends of the industry have been under pressure in recent years, and the year-on-year growth rate of NBV has dragged down the growth rate of EV
The growth of embedded value is mainly driven by the value creation of new business and the expected return of embedded value at the beginning of the period. However, with the gradual pressure on the liability end after 2017, the value of new business slows down year-on-year, and the proportion of value creation of new business in the annual increment of embedded value gradually decreases, resulting in the slowdown of EV growth. The year-on-year slowdown of NBV was caused by the joint pressure of FYP and margin. In 2017, CIRC Document No. 134 restricted the quick return annuity and required that universal insurance and investment linked insurance should not be sold in the form of additional insurance, which reduced the attraction of savings insurance products and suppressed the growth of new business premiums in the short term. In addition, affected by the epidemic, the sales of complex high-value products were blocked, the actuarial assumption indicators such as the continuation rate deteriorated, and some insurance companies switched business strategies, resulting in the decline of margin.
Structure: the internal reasons are the decline of customer touch efficiency and insufficient demand matching
As a basic security demand, insurance products cannot stimulate residents to actively seek and buy like strong demand such as clothing, food, housing and transportation. Its retail attribute determines that its current business model is the retail model of actively reaching customers, that is, “reaching – Exploring – matching – closing”. The rapid growth of the liability side of the insurance industry in 20152017 stems from the rapid expansion of customer reach brought about by the increase of the scale of the agent team. At the same time, the security attribute of insurance products is weak, the nature of savings and financial management is strong, and it is easy to sell quickly. However, the prosperity of the liability side masks the structural supply dislocation of the agent team. Document No. 134 of 2017 restricts the “quick return annuity” and the regulation puts forward the “insurance surname insurance”. The structural problems of the agent team are exposed due to the improvement of product switching and sales difficulty: the supply of sinking agent team is sufficient and the supply of high-quality team is too small, which makes it difficult for insurance companies to reach medium and high-end customers, while the number of basic customers can not continue to increase through the provision of agents, Resulting in weak growth of the liability side of the insurance industry.
Direction: upgrade touch efficiency, increase high-frequency services or help the debt side gradually recover
In order to realize the recovery of the liability side of the insurance industry, high-quality teams and differentiated products and services are essential. The high-quality team can improve the efficiency of reaching more middle and high-end customers, and can more effectively explore the needs of customers for matching. The upgrading of differentiated products and services can strengthen customers’ perception of insurance products, improve customer experience, distinguish from competitive products and peer products, and show comparative advantages. Therefore, the realization of channel and product upgrading will help the debt side gradually recover.
Risk tip: the economic recovery is less than expected; Insurance demand is weaker than expected; The transformation of listed insurance companies is blocked.
