On July 5, 2021, the China Banking and Insurance Regulatory Commission issued a circular on the implementation of the notice on strengthening standardized management and promoting the stable development of annual business of life insurance companies, which criticized some companies with radical sales rhythm during the "good start" period and guided insurance companies to gradually weaken the good start. Meanwhile, in 2021, the premium growth of insurance companies was under pressure, the pressure of year-end assessment was great, and the task of performance sprint in the fourth quarter was heavier, which became another important reason for the late start of 2022. Among the listed insurance companies, Guoshou started a good start in October 2021, Ping An, CPIC and Taiping in November, and Xinhua in December. The overall rhythm is about one month later than last year.
2022's opening products are still dominated by "annuity + omnipotent": 1) the main annuity insurance IRR of the main products has not changed much: Guoshou xinyuzhen enjoys 1.77%, Ping An Royal enjoys wealth 1.74%, Taibao Xinxiang Shicheng (celebration version) 1.57%, Xinhua Huijin enjoys 1.93% and Taiping Guoxi enjoys 1.74%, respectively, compared with the main products of last year + 5bp, + 8bp, - 4bp, - 5bp and - 3bp; 2) Universal account settlement & the guaranteed interest rate has not changed much: the settlement interest rate of most universal accounts remains 5.0% and the guaranteed interest rate remains 2.5% (the guaranteed interest rate of Ping an universal account is 1.75%).
During the good start of 2022, the premium growth has both pressure and power. It is expected that the product sales trend is generally good: 1) pressure: during the good start, the premium growth is still under the influence of epidemic situation, loss of agents, strengthening supervision and other pressures. 2) Motivation: in recent years, the premium income from a good start accounts for about 40-50% of the annual premium. A good start is still important to insurance enterprises, and listed insurance enterprises also actively layout. On the other hand, in the fiscal quarter at the end of the year and the beginning of the year, residents have abundant funds and strong terminal demand, or make a positive contribution to premium growth. At the end of 2021, the transition period of new asset management regulations ended, and insurance became the only financial product with guaranteed income. After the income of the opening products is thickened by the additional universal account, it forms a comparative advantage over the yield of bank financial products. With the enhanced attraction, the sales trend is expected to be good.
Investment suggestion: we expect all listed insurance companies to make a good start in 2022 and achieve single digit or small double-digit growth. At present, the P / EV valuation of the sector is at an absolute low in history, and the configuration cost performance is high. Recommend Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) and China Taiping, which are proactive in channel transformation and have strategic determination.
[ Ping An Insurance (Group) Company Of China Ltd(601318) ] "excellent +" agent plans to promote the transformation of digital empowerment, reduce costs and increase efficiency. The risk of real estate investment was mitigated, and the return on investment rebounded, which was good for valuation repair. The closing price on January 5 corresponds to 2021ep / ev0 62x, at an absolute historical low.
[ China Pacific Insurance (Group) Co.Ltd(601601) ] the new basic law will be implemented in 2022, and the "Changhang partner" plan will promote agents to improve quality and efficiency. The closing price on January 5 corresponds to 2021ep / ev0 52X, which is relatively low among comparable companies.
[China Taiping] the new leadership's proactive strategy has gradually achieved results. The year-on-year growth rate of life insurance in November 2021 is the highest among the major life insurance companies. The closing price on January 5 corresponds to 2021ep / ev0 18x, absolutely underestimated.
Risk tips: the epidemic spread exceeded expectations, the loss of agents exceeded expectations, and the terminal demand was less than expected.
