\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 319 The People’S Insurance Company (Group) Of China Limited(601319) )
Matters:
The People’S Insurance Company (Group) Of China Limited(601319) released the annual report of 2021. The annual total premium income was 585.4 billion yuan (YoY + 4%), the net profit attributable to the parent company was 21.6 billion yuan (YoY + 8%), and the EPS was 0.49 yuan / share (YoY + 8%). The company plans to pay a cash dividend of 1.47 yuan (including tax) for every 10 shares, plus the semi annual dividend of 0.17 yuan for every 10 shares. The annual dividend in 2021 is 1.64 yuan (including tax) for every 10 shares, with an annual dividend ratio of 33.5%.
Ping An View:
Property insurance: the comprehensive reform of auto insurance and the compensation for non auto insurance disasters have led to a sharp increase in the compensation rate and pressure on the underwriting profit. In 2021, the property insurance premium was 448.4 billion yuan (YoY + 4%), with a market share of 32.8% (YoY + 1PCT); The net profit is 22.6 billion yuan (YoY + 8%), and the underwriting profit is 1.8 billion yuan (yoy-56%). Among them, the property insurance expense ratio is 25.9% (yoy-6.8pct), the loss ratio is 73.6% (YoY + 7.4pct), the decrease of expense ratio is less than the increase of loss ratio, and the comprehensive cost ratio is 99.5% (YoY + 0.6pct).
1) the structure and quality of auto insurance business have been continuously improved, and the compensation ratio has increased significantly, which has increased the comprehensive cost ratio. In 2021, the auto insurance premium was 255.3 billion yuan (yoy-4%), accounting for 57% of the property insurance premium (yoy-5pct). In terms of business structure, the company vigorously developed the family car insurance business, with a year-on-year increase in market share of 1.4pct and a year-on-year increase in premium proportion of 1.0pct, with obvious industry leading advantages. At the same time, the company pays attention to the renewal and reinsurance business. The renewal rates of automobile commercial insurance and traffic compulsory insurance are + 2.0 PCT and 2.1 PCT respectively year-on-year, and the number of insured vehicles is + 11.3% and + 9.9% respectively year-on-year. Under the comprehensive reform of auto insurance, the expense rate increased from – 11.3pct to 27.2% year-on-year; However, the average price of vehicles decreased and the liability for compensation increased. Superimposed on the impact of rainstorms in Henan, the compensation ratio increased by + 12.1pct to 70.1% year-on-year, and the overall comprehensive cost ratio of vehicle insurance increased slightly by 0.8pct to 97.3%.
2) strategic development of non auto insurance business and more balanced business structure. In 2021, the premium of non vehicle insurance was 193.1 billion yuan (YoY + 16%), accounting for 43% (YoY + 5pct) of the property insurance premium, the underwriting profit was – 4.9 billion yuan, and the loss expanded. Specifically: ① affected by natural disasters such as rainstorm, typhoon, freezing, drought and epidemic diseases, the compensation ratio of enterprise property insurance is 90.7% (YoY + 23.0pct) and that of agricultural insurance is 80.5% (YoY + 5.6pct). ② Actively adjust the business structure, continue to strengthen risk control, clear the stock risk of financing credit guarantee insurance business, effectively resolve the risk of financing credit guarantee insurance business, the overall comprehensive cost rate of credit guarantee insurance is 66.7% (yoy-78.1pct), the underwriting profit is 1.8 billion yuan, and turn losses into profits. Among them, the scale of financing business has been greatly reduced and turned from loss to profit, while the scale of non financing business has increased by + 31% year-on-year and maintained a good underwriting profitability.
Life insurance: the team has been reduced, new orders are under pressure, and the performance of health insurance has reached a new high. In 2021, the marketing staff and monthly effective manpower of PICC Life Insurance decreased year-on-year, with new life insurance orders of 72.4 billion yuan (yoy-1%), including long-term new orders of 22.9 billion yuan (yoy-15%), and the total NBV of about 4 billion yuan (yoy-35%). However, PICC Health’s operating performance reached a new high, with a net profit of 260 million yuan (YoY + 622%).
Dynamically adjust asset allocation, strictly control risks, and make investment stable and good. In 2021, the total return on investment was 5.8%, basically unchanged year-on-year. The net return on investment is 4.8 (yoy-0.2pct), and the estimated comprehensive return on investment is 5.6% (yoy-0.7pct), which is mainly to grasp structural and phased opportunities and actively optimize the position structure.
Investment suggestion: for non vehicle business, the risk of guarantee insurance is basically cleared; With the weakening of the impact of the comprehensive reform base of auto insurance, the growth rate of auto insurance has been corrected and rebounded rapidly since 21q4. The leading insurance enterprises have the advantages of pricing, loss determination, channels and services, the pressure drop ability of fees and compensation is better than that of the industry, and the total underwriting profit is expected to be improved. Life insurance focuses on “big individual insurance” and adheres to value transformation, but the industry dilemma still exists. Based on this, we adjusted the property insurance loss ratio, new orders, nbvm and reserve assumptions. It is predicted that EVPs will rise from 5.78 yuan to 5.81 yuan in 2022. The company’s current share price corresponds to about 0.77 times of PEV in 2022, maintaining a “neutral” rating.
Risk tips: 1) the equity market fluctuates greatly, β Property led to increased volatility of the sector market. 2) The average vehicle premium fell more than expected, the loss ratio increased more than expected, and the underwriting profit of vehicle insurance was under pressure. 3) Natural disasters occurred frequently, and the compensation of agricultural insurance and enterprise property insurance exceeded expectations
