How did the heavy rain and other disasters in Henan last year affect the compensation of insurance companies? Some answers can be found from the annual report of PICC, the leader of China's property insurance.
On the evening of March 25, The People'S Insurance Company (Group) Of China Limited(601319) ( The People'S Insurance Company (Group) Of China Limited(601319) . SH) released the annual report of 2021. In terms of its core business property insurance, the comprehensive cost ratio of PICC Property Insurance increased by 0.6 percentage points year-on-year to 99.5%, which was higher than 99% for the first time since 2010, mainly due to the increase of loss ratio. In 2021, the net compensation expenditure of PICC Property Insurance was 279.2 billion yuan, an increase of 25 billion yuan year-on-year, an increase of 9.8%, and the compensation rate increased by 7.4 percentage points year-on-year, mainly due to the increase of insurance liability after the comprehensive reform of automobile insurance and the increase of disaster losses.
What is the impact of increased disaster losses? PICC Property Insurance (2328. HK) disclosed in the Hong Kong stock exchange that the comprehensive cost rate last year was 99.6% (according to Hong Kong Accounting Standards), an increase of 0.7 percentage points year-on-year; Excluding the impact of rainstorm and "fireworks" typhoon in Henan on July 20, the comprehensive cost rate decreased by 0.3 percentage points year-on-year. That is, the impact of these two disasters on its comprehensive cost rate reaches 1 percentage point.
In 2021, The People'S Insurance Company (Group) Of China Limited(601319) group realized a net profit of 30.602 billion yuan, an increase of 8.2% year-on-year; The net profit attributable to shareholders of the parent company was 21.638 billion yuan, a year-on-year increase of 7.8% The People'S Insurance Company (Group) Of China Limited(601319) plans to distribute cash dividend of 1.47 yuan per 10 shares (including tax) to all shareholders in 2021. With the addition of interim dividend, a total of 1.64 yuan per 10 shares will be distributed to shareholders in 2021. Calculated according to the net profit attributable to the parent company, the dividend payment rate is 33.5%.
in 2021, the insurance business income of PICC group was 585423 billion yuan, a year-on-year increase of 3.9%; The total assets at the end of the period were RMB 1.38 trillion, a year-on-year increase of 1.9%. Its total return on investment was 5.8%, the same as that of the previous year, the highest among the listed insurance companies that have disclosed their performance
property insurance loss ratio increased by 7.4 percentage points
PICC Property Insurance is the core subsidiary of PICC group. It is the largest property insurance company in China and is also at the head of the world. According to the The People'S Insurance Company (Group) Of China Limited(601319) annual report, PICC P & C realized an insurance business revenue of 449533 billion in 2021, a year-on-year increase of 3.8%. The market share was 32.8%, ranking first in the industry. The business growth is mainly due to the growth of accidental injury and health insurance, agricultural insurance, liability insurance, freight insurance and other businesses. The net profit was 22.586 billion yuan, a year-on-year increase of 8.4%.
Among the underwriting benefit indicators concerned by property insurance companies, the comprehensive cost rate of PICC Property Insurance was 99.5%, up 0.6 percentage points year-on-year. This is the first time that the company's comprehensive cost rate has exceeded 99% since 2010.
Taken apart, the comprehensive compensation ratio increased by 7.4 percentage points to 73.6%, which was mainly affected by the comprehensive reform of vehicle insurance and major disasters and accidents such as rainstorm and typhoon; Its expense rate decreased by 6.8 percentage points year-on-year to 25.9%. Its underwriting profit was 1.81 billion yuan, a year-on-year decrease of 56.4%.
Auto insurance still accounted for more than half of PICC's property and casualty insurance businesses, and the premium income of auto insurance was 255275 billion yuan, a year-on-year decrease of 3.9%. According to the disclosure of the annual report, the renewal rate of auto commercial insurance and traffic compulsory insurance and the number of insured cars have increased year-on-year. However, due to the decrease of the rate, the average car premium has decreased year-on-year, affecting the overall premium.
however, the structure and quality of auto insurance business continue to improve. The market share of family car insurance increased by 1.4 percentage points year-on-year, and the proportion of premium increased by 1.0 percentage points year-on-year, the highest in the same period in history
The underwriting profit of auto insurance was 6.672 billion yuan, a year-on-year decrease of 24.3%. Its comprehensive cost rate was 97.3%, a year-on-year increase of 0.8 percentage points. Due to the decline of average vehicle premium, the increase of compensation liability and the rainstorm in Henan on July 20, the compensation rate of vehicle insurance was 70.1%, up 12.1 percentage points year-on-year.
In terms of non auto insurance business, the premium income of original insurance totaled 193109 billion yuan, a year-on-year increase of 16.1%, accounting for 43.1%, an increase of 4.6 percentage points year-on-year. It is disclosed that the comprehensive cost rate of several types of PICC Property Insurance exceeded 100% in 2021.
PICC Property and casualty insurance and credit guarantee insurance have attracted attention before. In 2021, the business realized an original insurance premium income of 2.84 billion yuan, a year-on-year decrease of 46.2%. PICC said that the risk of financing credit guarantee insurance business has been effectively resolved, and the recovery income will reach 2.596 billion yuan in 2021. The financing credit guarantee insurance business turned losses into profits, and the non financing credit guarantee insurance business maintained a good underwriting profit. The overall comprehensive cost rate of credit guarantee insurance was 66.7%, a year-on-year decrease of 78.1 percentage points; The underwriting profit was 1.762 billion yuan, turning losses into profits.
PICC also has reinsurance business layout. In 2021, PICC realized a reinsurance premium income of 6.811 billion yuan, a year-on-year increase of 31.2%, and the proportion of third-party business continued to increase; Its business in China has expanded to property insurance head companies; New steps have been taken in the international layout, with Moody's A3 and S & P a-international ratings, becoming the first Chinese funded insurance institution registered in Argentina. In 2021, PICC's reinsurance net profit increased by 53.0% year-on-year.
The life insurance business of PICC group had an embedded value of 127607 billion yuan at the end of 2021, with a year-on-year increase of 8.8%. This sector mainly has two subsidiaries, namely PICC Life Insurance and PICC Health Insurance.
Among them, PICC Life Insurance realized a premium income of 96.847 billion yuan, a year-on-year increase of 0.7%; The net profit was 4.145 billion yuan, a year-on-year decrease of 8.4%; The embedded value increased steadily by 8.9% to 111431 billion yuan. PICC Health realized a net profit of 260 million yuan, a year-on-year increase of 622.2%; The value of new business was 765 million, a year-on-year increase of 8.8%.
total return on investment reached 5.8%, and the scale of third-party management exceeded 620 billion
On the investment side, The People'S Insurance Company (Group) Of China Limited(601319) group's investment assets reached 1.20 trillion yuan at the end of 2021, a year-on-year increase of 9.03%. In 2021, the total investment income was 63.068 billion yuan, a year-on-year increase of 11.2%; The net investment income was 52.270 billion yuan, a year-on-year increase of 6.7%; The total return on investment was 5.8%, basically the same as that of the previous year; The net return on investment was 4.8%, down 0.2 percentage points year-on-year.
For the investment strategy, PICC said in its annual report that in 2021, in the face of the adverse impact of the low interest rate environment and the downward shock of the equity market, it will strengthen the study and judgment of market trends, make dynamic adjustments to asset allocation, build an asset allocation framework system with effective connection between strategy and tactics, and actively prevent investment risks. Among them, bond investment seizes the opportunity of long-term debt allocation, lengthens the duration, and continuously reduces the duration gap of assets and liabilities; Equity investment selects tracks, actively grasp structural investment opportunities, strengthen performance benchmarking and strategy benchmarking, actively explore new income growth poles, and more diversified sources of investment income.
In terms of asset management business, at the end of 2021, the third-party asset management scale of PICC group was 621187 billion yuan, an increase of 33.6% over the end of the previous year. Among them, we actively grasped the development opportunities in annuity and pension business, and the scale of assets under management increased by 54.6% compared with the end of the previous year.
The annual report of PICC also disclosed the financial technology sector. This year, the Group invested 400 million yuan to establish PICC technology company, which is responsible for the overall construction of the group's basic technology platform; Start the construction of Langfang data center, speed up the expansion of Foshan data center, plan the construction of Shanghai Science and Technology Park, speed up the transformation of core business system and improve the ability of science and technology; PICC financial services focused on the strategic positioning of the Internet platform serving the whole group, realizing an operating revenue of 557 million yuan and a claim reduction of 1.905 billion yuan in the main service industry.
