With the release of New China Life Insurance Company Ltd(601336) annual report, the 2021 performance atlas of the five major A-share listed insurance companies has been completely unveiled. On March 29, the reporter of Beijing Business Daily found that the total net profit attributable to the parent of the five listed insurance companies in 2021 was 215958 billion yuan, a year-on-year decrease of 14.41%, and the average daily profit was about 590 million yuan.
On the liability side, in the face of the continuous impact of covid-19 pneumonia and the severe and complex market environment, the value growth of new life insurance business of listed insurance companies continues to be under pressure, and the property insurance sector is accelerating the development of non auto insurance business. Industry insiders believe that the transformation of agent team is not easy, and when to usher in the harvest period depends on the macro environment and the efforts of the company; In the field of property insurance, the non auto insurance business grew rapidly, and the auto insurance business returned to the slow growth channel, so the future growth of head property insurance company can be expected.
implement the “dumbbell” asset allocation strategy, and the investment drives the growth of net profit
According to the statistics of the reporter of Beijing business daily, in 2021, the total net profit attributable to the parent of the five listed insurance companies reached 215958 billion yuan, a year-on-year decrease of 14.41%, and the average daily total net profit was 590 million yuan, a year-on-year decrease of 14.17%.
Specifically, Ping An Insurance (Group) Company Of China Ltd(601318) net profit attributable to the parent company reached 101618 billion yuan, ranking first among the five companies, and China Life Insurance Company Limited(601628) net profit was 50.921 billion yuan, an increase of 1.3% year-on-year. In addition, the growth rate of The People’S Insurance Company (Group) Of China Limited(601319) , New China Life Insurance Company Ltd(601336) and China Pacific Insurance (Group) Co.Ltd(601601) net profits was higher than 7%, realizing net profits of 21.638 billion yuan, 14.947 billion yuan and 26.834 billion yuan respectively, with a year-on-year increase of 7.8%, 4.6% and 9.2% respectively.
The net profit of the five listed insurance companies generally increased due to the investment income. The reporter of Beijing Business Daily found that the total investment income of the five insurance companies in 2021 was 572016 billion yuan, the total investment income of the five insurance companies was greater than or equal to 4%, and the net investment return was greater than or equal to 4.38%.
Taking China Life Insurance Company Limited(601628) as an example, in 2021, China Life Insurance Company Limited(601628) realized a net investment income of 188770 billion yuan, an increase of 16.0% over 2020. The net return on investment reached 4.38%, an increase of 4 basis points over 2020. The total investment income of the whole year was 214057 billion yuan, a year-on-year increase of 7.8%.
Xu Yuchen, a senior actuary, pointed out that insurance investment mainly focused on bond investment and equity investment in equity assets such as stocks and stock funds. In 2021, the stock market fluctuated and the downward trend of interest rate was obvious. Under this background, the investment income of listed insurance companies was still good.
The reporter of Beijing business daily combed the asset allocation strategies of various insurance companies and found that many insurance companies adhered to the “dumbbell” configuration, that is, they selected two types of investment products with different styles for combination. For example, Deng bin, chief investment officer of Ping An Insurance (Group) Company Of China Ltd(601318) said that the investment asset allocation of Ping An Insurance (Group) Company Of China Ltd(601318) is a combination of “double dumbbells” and is very stable. For the “double dumbbell”, Deng bin explained that one end of the first dumbbell is the allocation of long-term investment interest rate bonds, which makes the matching of cash flow very stable and the expected stability of future investment income very strong. The other end is risk assets, including real estate and equity assets. Among the risky assets, there is a small dumbbell configuration. One end is a stable value investment with high dividends, and the other end is a growth oriented investment.
Referring to the follow-up configuration of the investment sector in 2022, all insurance companies said they would increase their positions in equity investment. For example, Zhang Di, assistant to China Life Insurance Company Limited(601628) president and chief investment officer, said that from the perspective of valuation, after early adjustment, the valuation of equity has fallen below the long-term center, the allocation value is slowly emerging, and the equity value of long-term investment can be slowly found from the allocation value of stocks and bonds. Therefore, for long-term investment, the valuation perspective has met the conditions for adding positions on the left.
life insurance new business value generally declined, and the agent team was clean and improved
Different from the investment side, the life insurance business of major insurance companies is still under pressure, and the value of new life insurance business generally decreases.
From the perspective of life insurance business performance, the total original premium income of PICC Life Insurance, New China Life Insurance Company Ltd(601336) , China Life Insurance Company Limited(601628) , CPIC life insurance and Ping An Life Insurance in 2021 was 1.55 trillion yuan. The value of the new life insurance business of the five listed insurance companies declined to varying degrees. In 2021, the new business value of CPIC life insurance, which is in the critical period of transformation, fell for three consecutive years, to 13.412 billion yuan, a year-on-year decrease of 24.8%. The new business value of PICC Life Insurance was 3.227 billion yuan, a year-on-year decrease of 40.6% The value of China Life Insurance Company Limited(601628) , New China Life Insurance Company Ltd(601336) , Ping An Life Insurance and health insurance also declined to varying degrees.
In the field of life insurance of listed insurance enterprises in the critical period of transformation, on the one hand, the value of new life insurance business is poor, on the other hand, life insurance agents speed up clearing up the deficiency. The average number of monthly marketers of CPIC life insurance decreased by nearly 30% to 525000. The number of “big personal insurance” marketers of PICC Life Insurance has declined from 414200 in 2020 to 185900 in 2021, directly “halving”, while the number of agents of Ping An Life Insurance and China Life Insurance Company Limited(601628) has also declined.
With regard to the reasons for the sharp decline in the new business value and the number of agents of major life insurance companies, Guo Zhenhua, director of the Department of Finance and insurance of Shanghai University of international business and economics, said that this is due to various reasons, such as the decline in macroeconomic growth rate, the sharp increase in national income instability caused by the epidemic, the market ownership of major insurance types and serious illness insurance is close to saturation, and people’s demand for long-term life insurance has decreased, The long-term life insurance business is not as good as before.
In the past two years, the loss of agents has become a phenomenal topic. At present, life insurance companies have built professional teams. Specifically, Ping An Life Insurance wants to build a “three high” agent team with “high quality, high performance and high quality” to promote the transformation of life insurance China Life Insurance Company Limited(601628) ‘s sales layout is a “integrated and diversified” system. The individual insurance sector continues to focus on value creation, including the diversified business sectors of bancassurance, group insurance and health insurance, focusing on professional operation, quality improvement and efficiency enhancement, transformation and innovation, and developing in synergy with the individual insurance sector.
From the perspective of “qualitative” changes, Ping An Life Insurance and health insurance agent channels have effectively improved the per capita production capacity through the implementation of hierarchical and refined management of teams. In 2021, the per capita first year premium of agents increased by more than 22% year-on-year New China Life Insurance Company Ltd(601336) personal insurance channels have a monthly average per capita comprehensive production capacity of 2725 yuan, an increase of 4.1% year-on-year. In 2021, the CG (top performance, MDRT level) manpower of CPIC life insurance increased by 170.1% year-on-year.
Guo Zhenhua said that the agent transformation and value transformation is to reform the recruitment, training and assessment methods of agents, so as to gradually realize excellent growth and education, high retention rate, high production capacity, high order retention rate and high income.
A typical best practice in China is the agent team of AIA life. However, this is not easy. When to usher in the harvest period depends on the macro environment and the company’s efforts. At present, there are no signs of improvement, and the company’s reform has not been fully implemented. It is expected that the reform of the life insurance industry will achieve practical results in 2022 and return to the growth of new business value in 2023.
auto insurance “protagonist halo” is slightly dim, non auto business “speed up”
In 2021, facing the challenges of comprehensive reform of auto insurance, reconstruction of supply chain and continuous rise of climate risk, the auto insurance premium will continue to be under pressure.
Taking CPIC property insurance as an example, although the income of CPIC property insurance business increased by 3.3% year-on-year to 152643 billion yuan, the income of automobile insurance business was 91.799 billion yuan, a year-on-year decrease of 4.0%. From the perspective of premium income, the annual premium income of PICC Property Insurance and auto insurance decreased by 3.9% year-on-year to 255275 billion yuan in 2021. The original insurance premium income of Ping An Property Insurance and auto insurance business decreased by 3.7% year-on-year, but it has gradually resumed growth, with a year-on-year increase of 8.7% in the fourth quarter of 2021.
For when the auto insurance business will usher in an inflection point, the relevant research reports released by Ping An Securities Wang Weiyi, Li Bingting, Wang De’an and Chen Xianghe show that 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 the fourth quarter of 2021, and the total underwriting profit is expected to improve.
Although it will take some time for the recovery of auto insurance business, the non auto insurance premium income of listed insurance enterprises has ushered in rapid growth “coincidentally”. In 2021, the original insurance premium income of PICC Property Insurance non auto insurance business was 193109 billion yuan, a year-on-year increase of 16.1%; Accounting for 43.1%, up 4.6 percentage points year-on-year. The non auto insurance business of CPIC property insurance maintained rapid growth, with revenue increasing by 16.8% year-on-year, accounting for 4.7 percentage points, reaching 40.6%.
Specifically, in addition to the year-on-year decline of 46.2% in the premium of credit guarantee insurance, PICC Property Insurance and other non automobile insurance businesses have increased to a certain extent, and the business of emerging business areas such as health insurance, liability insurance and agricultural insurance of CPIC property insurance has increased rapidly. Gu Yue, chairman of CPIC property insurance, said that the higher growth of these three categories of business is because the above insurance types are in important areas of national strategy, including rural revitalization, healthy China and improving social people’s livelihood. At the same time, these three businesses are also the weakest areas in the development of China’s insurance industry, so there is a lot of room for growth.
“After the comprehensive reform of auto insurance, the auto insurance business will return to the slow growth channel as a whole, and the auto insurance business advantages of head insurance enterprises will be enhanced. Coupled with the rapid growth of non auto insurance business, such as agricultural insurance business, urban insurance business and liability insurance business, the future growth of head property insurance company can be expected.” Guo Zhenhua added.
