Key investment points
Overall: in February, the original premium income of life insurance of listed insurance enterprises was + 1.19% year-on-year, and the original premium income of property insurance was + 15.99% year-on-year. In February, the original premium income of life insurance business of listed insurance enterprises (TPL + Ping An Life + Guoshou + Xinhua + Taiping Life + PICC Life) totaled 106.2 billion yuan, up + 1.19% year-on-year; The original premium income of property insurance business (PICC + Ping An Property + Taiping property + Taiping property) totaled 57.7 billion yuan, a year-on-year increase of + 15.99%. From January to February: the original premium income of life insurance business (CPIC + Ping An Life + Guoshou + Xinhua + Taiping Life + PICC Life) of listed insurance enterprises totaled 585.1 billion yuan, a year-on-year increase of – 0.30%, and the original premium income of property insurance business (PICC + Ping An Property + Taiping property + Taiping property) totaled 174.8 billion yuan, a year-on-year increase of + 12.89%.
Life insurance: the highest year-on-year increase of TPL + 14.85% in February, and the highest year-on-year increase of PICC + 26.45% from January to February. February: TPL 18 billion yuan (year-on-year + 14.85%), Ping An Life 30.2 billion yuan (year-on-year – 4.70%), China Life Insurance Company Limited(601628) 34 billion yuan (year-on-year – 3.13%), New China Life Insurance Company Ltd(601336) 105 billion yuan (year-on-year + 11.15%), TPL 6.7 billion yuan (year-on-year + 1.41%) and PICC Life 6.8 billion yuan (year-on-year + 5.69%). January February: TPL 73.9 billion yuan (year-on-year + 2.34%), Ping An Life 128.8 billion yuan (year-on-year – 1.61%), China Life Insurance Company Limited(601628) 241.2 billion yuan (year-on-year – 5.04%), New China Life Insurance Company Ltd(601336) 46.4 billion yuan (year-on-year + 5.20%), TPL 41.4 billion yuan (year-on-year – 4.64%), PICC Life 53.4 billion yuan (year-on-year + 26.45%).
Property insurance: the highest year-on-year increase of CPIC property insurance in February was + 22.53%, and the highest year-on-year increase of CPIC property insurance from January to February was + 15.66%. February: PICC Property Insurance was 33.3 billion yuan (year-on-year + 13.39%), Ping An Property Insurance was 14.7 billion yuan (year-on-year + 17.64%), CPIC property insurance was 9.9 billion yuan (year-on-year + 22.53%), and Taiping property insurance was 1.7 billion yuan (year-on-year + 14.59%). January February: PICC Property Insurance 91.8 billion yuan (YoY + 13.65%), Ping An Property Insurance 47.5 billion yuan (YoY + 10.97%), CPIC property insurance 31 billion yuan (YoY + 15.66%), and Taiping property insurance 4.6 billion yuan (YoY + 1.11%).
In February, CPIC and Xinhua performed well, Ping An Life Insurance and Guoshou continued to be under pressure, and the recovery of property insurance slightly exceeded expectations. In February, the monthly premium of life insurance was differentiated. According to grassroots research, the continuous loss of agents is still the main reason for the pressure of Ping An life insurance and Guoshou premiums. Property insurance maintained double-digit growth, indicating that the comprehensive reform of automobile insurance has had a small impact on insurance enterprises.
Investment advice: since the beginning of the year, the insurance sector has fallen by 13.67%, while the CSI 300 has fallen by 12.46% over the same period. We believe that the continued weakness of the liability side of life insurance and the intensification of capital market fluctuations are the main reasons for the decline of the sector. At present, the spread of the epidemic is slightly higher than expected, which suppresses the marginal improvement of the debt side in the short term. The continuous loss of agents, the spread of the epidemic and weak terminal demand will continue to test the determination of insurance enterprises in channel reform. We are still optimistic about the long-term growth space of China’s insurance industry. The industry adheres to the reform route of intensive cultivation rather than rough development, which will eventually usher in a turnaround. The current P / EV valuation of the sector is at a historical low, and we think it has fully reflected the pessimistic expectation on the liability side. Recommend Ping An Insurance (Group) Company Of China Ltd(601318) and China Pacific Insurance (Group) Co.Ltd(601601) with strong reform determination.
Risk tips: agent shedding exceeded expectations, epidemic spread exceeded expectations, and capital market volatility intensified.
