Both ends of assets and liabilities are under pressure, and the valuation is low, which fully reflects the pessimistic expectation of the market on the fundamentals of the industry. In 2021, the fundamentals of the insurance sector are under pressure, the core business indicators such as premium, new policy, new business value and return on investment decline, and the valuation of the sector is at a historical low. As of December 24, 2021, the insurance index had fallen by 39.53%, 33.97 percentage points lower than the CSI 300 index. The P / EV of the insurance sector is between 0.43x-0.70x, and the valuation is at a historical low, which has fully reflected the pessimistic expectation of the market on the fundamentals of the industry, and the configuration value is prominent.
The improvement of life insurance still needs time. The beginning of 2022 is under pressure. The growth rate of policy sales is low before and high after. The covid-19 epidemic, the substitution role of Internet insurance and the traditional marketing system encounter bottlenecks, which impact on policy sales. The fundamentals of life insurance are under pressure in 2021. Looking forward to 2022, considering the high base of 2021q1, the delay in starting a good start and the difficulty in showing the effect of agent team transformation in the short term, the new opening orders in 2022 are under pressure, and the improvement of life insurance still needs time. As insurance companies actively promote the transformation of agent channels, improve the professionalism of agents, change the past crowd tactics to precision marketing, achieve product supply and demand matching, and truly focus on customers, the effect of industry transformation will gradually appear, and the number of agents may continue to decline. However, the production capacity will increase, the year-on-year growth rate of premium income is low before and high after, and the value of new business will improve.
The impact of the comprehensive reform of automobile insurance has gradually subsided, the property insurance premium has warmed up, and the inflection point appears. With the implementation of the comprehensive reform of automobile insurance, the growth of property insurance premium income is under pressure and decreased significantly in 2021. Looking forward to 2022, the impact of comprehensive reform of auto insurance will gradually subside, the base will decline, and the auto insurance premium will gradually pick up. Considering that the auto market is becoming more and more mature and consumers' requirements are increasing, the growth rate of auto insurance premium will return to moderate. As insurance companies vigorously promote the development of non auto insurance business and optimize the property insurance structure, the proportion of non auto insurance will be further increased, and the growth of property insurance in the future will be mainly driven by non auto insurance business.
Correction of real estate policy and narrow fluctuation of long-term bond interest rate. The pressure on the investment side will be relieved in 2022. In 2021, the real estate policy will be tightened, the real estate credit default risk will be exposed, the long-term bond interest rate will decline, and the investment side will be under pressure. Looking forward to 2022, the real estate policy will be corrected, the interest rate of long-term bonds will fluctuate in a narrow range, and the investment risk will be mitigated. On September 24, 2021, the monetary policy committee of the central bank held the regular meeting of the third quarter, saying to safeguard the healthy development of the real estate market and the legitimate rights and interests of housing consumers. On December 6, the Political Bureau of the CPC Central Committee held a meeting to support the commercial housing market to better meet the reasonable needs of buyers and promote the healthy development and virtuous cycle of the real estate industry. The orderly progress of policy correction, debt default resolution and disposal of real estate enterprises will help alleviate the market's concerns about the investment side of insurance enterprises. Meanwhile, according to the view of the fixed income team of galaxy securities, the interest rate at the senior end will maintain a narrow fluctuation pattern in 2022, and the investment pressure of insurance enterprises is expected to improve.
Investment suggestion: the start-up is delayed, and the transformation effect of insurance enterprise agent team is difficult to show in the short term. Superimposed on the high base of 2021q1, the start-up is under pressure in 2022, and the improvement of life insurance still needs time. The impact of comprehensive reform of automobile insurance gradually subsided, property insurance continued to pick up, and the inflection point appeared. The current price corresponds to the P / EV of the insurance sector in 2021, which is between 0.43x-0.7x, and the valuation is at a historical low. It is recommended to pay attention to the configuration value. In terms of individual stocks, we continue to recommend China Pacific Insurance (Group) Co.Ltd(601601) (601601. SH), Ping An Insurance (Group) Company Of China Ltd(601318) (601318. SH).
Risk tip: the risk of downward movement of the long end interest rate curve; Risk of insurance product sales falling short of expectations
