On the afternoon of March 28, The People’S Insurance Company (Group) Of China Limited(601319) held a 2021 performance conference, which introduced and responded to the main insurance industry’s profitability, investment strategy, stock price performance, etcP align = “center” source: The People’S Insurance Company (Group) Of China Limited(601319) 2021 annual performance Conference
development direction:
expand the incremental insurance market
Luo Xi, chairman of The People’S Insurance Company (Group) Of China Limited(601319) and chairman of China property insurance, pointed out that although China’s insurance industry is facing great development difficulties in 2021, China’s insurance industry is still in an important period of strategic opportunities, The People’S Insurance Company (Group) Of China Limited(601319) will pursue the dynamic balance between growth and efficiency and achieve high-quality development.
Luo Xi said that from the perspective of policy environment and people’s insurance demand, China’s insurance industry has huge development space. For example, in the process of rural revitalization, insurance can better ensure food security, strengthen seed industry protection, and change agricultural insurance from cost to output and income. At the same time, in terms of public services and social governance, many government functions can be undertaken through insurance. Social governance insurance is also an important development direction in the future and has great potential.
From the perspective of insurance supply, the structure of insurance types of insurance enterprises is not balanced at present, such as the development of liability insurance, catastrophe insurance and emerging insurance types in property insurance lags behind. In this regard, The People’S Insurance Company (Group) Of China Limited(601319) is building a comprehensive risk management platform to analyze and study the risks of various industries. Through the improvement of insurance structure and the development of emerging products, deepen the structural reform of insurance supply side, and expand the insurance incremental market in serving the overall situation of national economic development.
Last year, The People’S Insurance Company (Group) Of China Limited(601319) reduced quality and high-risk businesses, and continued to optimize the structure. In dealing with the relationship between growth and efficiency, Luo Xi believes that this is essentially the relationship between scale and quality, which will not be simple opposition. Growth is the basis of efficiency, and efficiency is the guidance of growth. The key is to achieve quality priority and dynamic balance. To achieve quality first, property insurance focuses on comprehensive cost rate and premium receivable, while life insurance focuses on business value and effective manpower. At the same time, we should build two foundations, one is to build a long-term investment income channel, and the other is to build an ecosystem to ensure risk safety.
property insurance business:
2022 the growth rate of auto insurance industry will achieve restorative growth
According to the data, PICC P & C realized a net profit of 22.586 billion yuan in 2021, a year-on-year increase of 8.4%. With regard to the profitability of auto insurance business, Wang tingke, President of The People’S Insurance Company (Group) Of China Limited(601319) said that since the impact of comprehensive reform on the decline of average vehicle premium has been fully released in 2021, the growth rate of auto insurance in the industry will achieve restorative growth in 2022. The company will strive to keep pace with the market and the market share will be basically stable.
In 2022, the loss ratio and expense ratio of traditional auto insurance will maintain a relatively stable level. As the new energy vehicle clause was officially launched in December 2021, the new energy vehicle compensation ratio under the new clause increased and the expense ratio decreased. It is expected that the company’s vehicle insurance compensation ratio will increase slightly and the expense ratio will decrease slightly in 2022, and the overall comprehensive cost ratio will remain stable. According to Yu Ze, vice president of PICC group, the comprehensive cost rate of new energy vehicle insurance has been controlled at about 97% in the first quarter of 2022.
As for the profitability of non vehicle business, the profitability of PICC Property Insurance non vehicle insurance business decreased in 2021 due to the impact of major disaster losses and changes in business structure.
“In 2022, the company will strengthen comprehensive business management, optimize the structure of non auto insurance business, and improve business quality and profitability.” Wang tingke introduced at the press conference that the first is to comprehensively carry out the comprehensive management of commercial and non-commercial high compensation business and strive to improve commercial and non-profit ability. The underwriting end shall eliminate or transform high-risk and low-quality businesses, establish and improve the independent underwriter system, and strengthen nuclear custody control. The claim settlement side will further promote the cost reduction and efficiency increase of claim settlement, integrate system professional resources, and strengthen the control of claim settlement process; Promote the integrated management of personal injury and improve the fine and professional management and control of personal injury compensation cases; Strengthen the anti fraud investigation of compensation cases; Build a closed-loop feedback mechanism for underwriting and claim settlement risk, and strengthen risk customer identification and underwriting control.
Second, build a risk reduction management operation platform, develop industry risk management models, implement risk solution R & D projects, promote the commercialization of R & D achievements, optimize business quality, reduce the impact of major disasters and improve profitability by promoting risk reduction management services.
Investment:
equity market has strategic allocation value
“The market is at the bottom stage in the short term, and the medium and long-term allocation value has appeared.” Referring to the equity market, The People’S Insurance Company (Group) Of China Limited(601319) executive director, vice president and Secretary of the board of directors Li Zhuyong said at the press conference that the meeting of the Financial Committee on March 16 released a positive signal, reversed the pessimistic expectations of the market, and market confidence is gradually recovering.
In the medium and long term, the equity market has the value of strategic allocation. Li Zhuyong said that first of all, the macroeconomic environment of steady growth in 2022 has laid a good foundation for the development of the equity market, and the medium and long-term trend of China’s economy has not changed. Secondly, the capital market system has been continuously improved and perfected, creating a good legal and institutional environment for investors to share the fruits of China’s economic growth. Thirdly, the current market valuation is relatively low. The dynamic valuations of Shanghai stock index, CSI 300 and gem index are all below the quantile of 30% in the past 10 years.
Li Zhuyong further said that the company will adhere to the concept of long-term investment, value investment and prudent investment, actively support the national strategy, serve the real economy and spare no effort to maintain the smooth operation of the capital market.
First, within the scope of acceptable risk, equity investment focuses on the center of asset allocation, actively improves the proportion of equity allocation at a relatively low valuation, and actively carries out rebalancing operation.
Second, in terms of specific equity varieties, we should actively grasp the phased opportunities brought by the return of valuation of traditional industries benefiting from the steady growth policy. We should also focus on the structural investment opportunities brought by emerging strategic industries such as consumption upgrading, scientific and technological innovation, healthy elderly care, green and low-carbon, and build an asset portfolio in line with the direction of economic development and through the cycle.
“With regard to the impairment of credit investment assets, we have continuously strengthened the management of credit risk in the use of insurance funds and always adhered to the bottom line of risk.” Li Zhuyong said. From the investment situation of PICC in 2021, for bond investment, the issuer’s rating is AA / A-1 or above, with AAA accounting for 99.8%. The credit bond industry is scattered and the credit risk is generally controllable. In terms of non-standard investment, the external credit rating of AAA accounts for 98.3%, and positive and effective credit enhancement measures are adopted, such as guarantee, repurchase, balance supplement, etc.
The concept of equity investment is to adhere to “long-term investment and value investment” and control the proportion of equity positions within the range of acceptable risks.
“From the position situation, the credit risk is controllable as a whole, and there is little pressure on the impairment of credit risk in 2022.” Li Zhu expressed with.
will take various measures to stabilize and boost the stock price
Li Zhuyong said at the press conference that the overall performance of the insurance sector in 2021 was poor, mainly due to the switching momentum in the field of life insurance. The past business model is unsustainable. The industry has carried out in-depth channel and product reform. Insurance companies are taking the initiative to slow down the growth rate in order to achieve high-quality growth in the future through reform.
“The combination of these macroeconomic factors led to the poor performance of the insurance sector in 2029.” Li Zhuyong said that from the perspective of value, The People’S Insurance Company (Group) Of China Limited(601319) at present, the dividend yield corresponding to the share prices of A-Shares and H shares is 3.7% and 8.0% respectively. The share price is still undervalued and worth holding for a long time.
The People’S Insurance Company (Group) Of China Limited(601319) introduced that it will stabilize and boost the company’s share price in various ways. First, further promote the implementation of the “excellent insurance strategy”, continuously improve the company’s performance, create sustainable growth value for investors, and support the company’s share price with good performance. Second, continuously improve the return to investors. The company pays attention to the amount of dividend per share and will inevitably consider this when establishing the dividend proportion every year. Moreover, since the listing in 2012, the company’s cash dividend per share has always maintained an increasing trend and will be maintained as far as possible in the future, so that investors can obtain stable dividend income. Third, vigorously strengthen communication with investors, so that the market can have an in-depth understanding of the company’s operation and management, business characteristics dominated by property insurance, unique competitive advantages and good investment value. In short, we are optimistic and confident about the long-term development of the insurance industry and the company, and the company’s share price will be better in the long run.
