on the one hand, the institutional research heat has dropped to the freezing point, and on the other hand, the inflow of foreign capital continues to rise. Since December 2021, a large number of foreign investors have increased their positions in insurance stocks against the trend.
On the last trading day of 2021, the A-share index was red and the insurance sector fell slightly.
According to the reporter's statistics, since 2021, the insurance sector (Shenwan secondary classification) has decreased by 39%, seriously underperforming the 4.8% increase of Shanghai stock index in the same period. Data show that no company in the insurance sector has received institutional research this year, which is fundamentally due to the decline in the fundamentals of the insurance industry.
After five years of double-digit growth since 2013, the growth rate of the insurance industry fell back to single digits in 2018, with negative growth for many consecutive months since 2021. Shenwan Hongyuan Group Co.Ltd(000166) analysis points out that the traditional inefficient marketing model has entered a deep and sustainable dilemma, and the epidemic has pressed the acceleration key; Fundamental improvement needs to be observed after the second half of 2022.
The research heat fell to an all-time low
As of the closing on December 31, 2021, only Taibao, one of the five major A-share insurance stocks, closed up. Ping An Insurance (Group) Company Of China Ltd(601318) closed at 50.41 yuan, unchanged from the previous trading day; China Life Insurance Company Limited(601628) closed at 30.09 yuan, down 0.09%; The People'S Insurance Company (Group) Of China Limited(601319) closed at 4.7 yuan, and the share price remained unchanged; China Pacific Insurance (Group) Co.Ltd(601601) closed at 27.12 yuan, up 0.18%; New China Life Insurance Company Ltd(601336) closed at 38.88 yuan, and the share price remained unchanged.
With the sharp decline in the performance of insurance stocks, no company in the insurance sector has received institutional research this year. According to the data of East Money Information Co.Ltd(300059) choice, the total number of institutional research in the year exceeded 245000, and the total number of research institutions received by companies related to some popular sectors reached thousands in the year. From 2018 to 2021, only three insurance companies have been surveyed by institutions: Ping An Insurance (Group) Company Of China Ltd(601318) received 9 surveys, including 3 in 2018 and 6 in 2020; New China Life Insurance Company Ltd(601336) 5 times, all in 2020; Hubei Biocause Pharmaceutical Co.Ltd(000627) 2 times, all in 2018.
On the one hand, the institutional research heat has dropped to the freezing point, and on the other hand, the inflow of foreign capital continues to heat up. Since December 2021, a large number of foreign investors have increased their positions in insurance stocks against the trend.
According to the data of East Money Information Co.Ltd(300059) choice, among the five listed insurance companies from December 1 to December 31, 2021, Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , New China Life Insurance Company Ltd(601336) , China Pacific Insurance (Group) Co.Ltd(601601) were increased by Shanghai Stock connect, with a monthly increase of 77542900 shares, 10566300 shares, 7108200 shares and 3291200 shares respectively. The five major insurance stocks Shanghai Stock connect net bought 4.5 billion yuan; The stock market value held by northbound funds increased by 17.35% compared with the end of last month. As of December 31, 2021, the top three shareholdings of Shanghai Stock connect are Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) and The People'S Insurance Company (Group) Of China Limited(601319) respectively, and the latest shareholdings are 667 million shares, 198 million shares and 98212300 shares respectively.
Institutional research is usually regarded as the wind vane of institutional layout. In recent years, the research information of institutional investors has received extensive attention. Since 2020, the enthusiasm and frequency of institutional investors' research on the company have increased significantly. Sinolink Securities Co.Ltd(600109) survey data show that due to the popularity of online research after the outbreak of the epidemic, the number of listed companies surveyed will reach the level of about 2500 times in 2021. From the market value distribution of the surveyed companies, enterprises with a market value of less than 10 billion have always been the main body of the survey, and the number of surveyed companies has increased rapidly in recent years.
Sinolink Securities Co.Ltd(600109) released the Research Report "vanishing excess returns: Companies in the spotlight have no secrets" in November 2021, which pointed out that the market performance of companies with different research heat is obviously differentiated, and the companies with higher research heat have more significant excess returns after being investigated.
There is no direct causal relationship between research heat and excess return. Sinolink Securities Co.Ltd(600109) the research emphasizes that for companies with high research popularity, the excess return after being investigated comes from strong fundamentals. For companies with higher attention, their ROE (return on net assets) always exceeds the roe level of the industry sector after being investigated, and continues to rise relative to the industry roe after the investigation.
Growth inflection point in 2018
The lack of interest in the research of insurance stocks has something to do with the growth dilemma of the insurance industry. Insiders pointed out that the growth inflection point of the insurance industry has appeared in 2018.
According to the annual statistical data released on the official website of the China Banking and Insurance Regulatory Commission, reviewing the operating performance of the insurance industry in recent ten years, the industry as a whole and life insurance have accelerated since 2012. In 2013, the industry as a whole achieved double-digit rapid growth for the first time in recent ten years, with property insurance and life insurance contributing 17.2% and 7.86% respectively. The growth rate reached the peak of nearly a decade in 2016, and the premium income of original insurance was 3095.910 billion yuan that year, with a year-on-year increase of 27.50%. Among them, the original insurance premium income of property insurance companies was 926.617 billion yuan, a year-on-year increase of 10.01%; The original insurance premium income of life insurance companies was 2169.281 billion yuan, a year-on-year increase of 36.78%.
After five years of double-digit growth since 2013, the growth rate of the insurance industry fell back to single digits in 2018, mainly due to the weak growth of life insurance; In addition, the overall growth rate of property insurance also showed a downward trend. In 2018, the original premium income of the industry increased by 3.92% year-on-year. Among them, the original insurance premium income of property insurance companies was 1175.569 billion yuan, a year-on-year increase of 11.52%; The original insurance premium income of life insurance companies was 262.687 billion yuan, a year-on-year increase of 0.85%. In 2019 and 2020, the growth rate of life insurance will pick up relatively, and the original premium income of the industry will achieve an overall growth rate of 12.17% and 6.12% respectively. (prepared by Zhao shumeng)
According to the data of 2021, the industry operation fell into a trough, and the premium income showed negative growth for many consecutive months. In the first November, the original insurance premium income of the insurance industry was 4164.4 billion yuan, a year-on-year decrease of 1.27%. The original insurance premium income of property insurance companies was 1244.1 billion yuan, a year-on-year decrease of 0.4%; The original insurance premium income of life insurance companies totaled 2920.3 billion yuan, a year-on-year decrease of 1.63%.
In terms of listed insurance companies, in the first November of 2021, 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) realized a total premium income of 2.31 trillion yuan, a decrease of 0.67% over the same period last year. Specifically, the original premium income of Ping An Insurance (Group) Company Of China Ltd(601318) (Group) was 691.42 billion yuan, a year-on-year decrease of 5.22%, slightly narrower than that in the previous October; China Life Insurance Company Limited(601628) the original premium income was 593.4 billion yuan, a year-on-year increase of 1.23%; The original premium income of The People'S Insurance Company (Group) Of China Limited(601319) (Group) was 531.189 billion yuan, a year-on-year increase of 2.17%; The original premium income of China Pacific Insurance (Group) Co.Ltd(601601) (Group) was 341.359 billion yuan, a year-on-year increase of 0.81%; New China Life Insurance Company Ltd(601336) the original premium income was 155.113 billion yuan, a year-on-year increase of 1.67%.
The traditional inefficient model is in trouble
Orient Securities Company Limited(600958) believes that the performance of the insurance industry is significantly weaker than the overall market, which is mainly disturbed by several factors.
From the debt side, under the influence of the epidemic, the income instability of residents increased, superimposed on the changes of labor structure, resulting in a vicious circle of sluggish sales of new orders, lower income than expected and higher agent shedding rate; Affected by the comprehensive reform, all parts of the auto insurance business declined, the insufficient chip capacity led to the downturn of auto sales, and the increase of cor (comprehensive cost rate) under the superposition of commercial fare reform, which jointly led to the continuous pressure of auto insurance.
From the asset side, under the catalysis of the overall RRR reduction, the long-term interest rate continued to drop below 3%. The market's concern about the risk of spread loss led to the continuous decline of the valuation center. In addition, some insurance companies stepped on the thunder at the investment side, which also exacerbated the pessimistic expectation.
When can the insurance industry get rid of the growth dilemma and how will it develop in the future?
In terms of life insurance, Shenwan Hongyuan Group Co.Ltd(000166) analysis points out that the traditional inefficient marketing model has entered a deep and sustainable dilemma, and the epidemic has pressed the acceleration key. It can be predicted that even if there is no epidemic, the traditional inefficient marketing model will face difficulties. At present, the main contradiction of insurance products is the contradiction between the diversified needs of policyholders and unbalanced and insufficient products and services. From both sides of products and channels, deep-seated contradictions gradually appear, and there is still room for improvement and improvement in the customer-centered goal.
Shenwan Hongyuan Group Co.Ltd(000166) it is estimated that due to the combined impact of deferred rhythm and high base in the same period, the industry NBV (new business value) decreased by nearly 20% year-on-year in the first quarter of 2022, but the market had full expectations before, focusing on the recovery of effective manpower and the improvement trend of team quality. Since October 2021, the regulator has continuously issued new Internet life insurance regulations, life insurance sales management measures and other specifications, which is expected to reshape the industry competition pattern. In early December, some small and medium-sized insurance enterprises successively took off the shelves, shut down or adjusted the Internet insurance business. The competitive pressure of the head company's products is expected to be alleviated marginally, but the improvement of fundamentals remains to be observed after the second half of 2022. It is expected that the growth rate of new orders and value will be low before and flat after 2022, and the single digit of the industry will decline throughout the year. It is expected to usher in an inflection point after the third quarter of next year.
In terms of property insurance, Orient Securities Company Limited(600958) analysis shows that in the first year of comprehensive reform of auto insurance, the premium has declined, the comprehensive cost rate has increased, and the industry is under pressure as a whole. However, at present, auto insurance has turned to a good turning point. It is expected that the business quality will enter the improvement channel, and the scale advantage of large insurance enterprises is expected to gradually appear. The demand for non vehicle business is strong. Credit insurance actively reduces the scale and controls the risk. The proportion of non vehicle business has increased, becoming an important growth point. It is expected that under the joint force of automobile insurance and non automobile insurance, it is expected to realize two-wheel drive and drive the overall development of property insurance.
(International Finance News)
