Key investment points
Summary of the annual report: under the background of high prosperity of the equity market, the overall performance of investment income is good, which has become the main support for profit growth in 2021; The new single growth rate and value performance on the liability side are under double pressure, and the negative growth rate of NBV is generally more than - 20%. The reason is that the supply side is subject to stricter supervision, the promotion of industrial reform and the sharp shrinkage of the scale of agents; The demand side is that the residents' insurance consumption, especially the consumption intention of serious illness insurance, has not fully recovered under the influence of the epidemic. On the whole, 2021 is the year with the greatest efforts to eliminate the deficiency of the team of listed insurance enterprises. The per capita production capacity of some companies has been improved, and the reform results are becoming more and more obvious. However, considering that the elimination of deficiency of manpower and the adjustment of product structure in 2021 have a certain positive contribution to the per capita production capacity, whether the quality of the team can be continuously improved in the future remains to be verified by data.
Liability side: production capacity has been improved under the sharp reduction of manpower, and efforts have been made through multiple channels such as bancassurance. In terms of personal insurance: 1) the channel structure dominated by individual insurance is accelerating adjustment, and the proportion of individual insurance new orders in the total new orders has decreased significantly. 2) The growth rate of renewal business has slowed down, and some companies have had negative growth. 3) Listed insurance companies generally increased the construction of Bancassurance channels, and the contribution of diversified businesses to the new single premium was further improved. 4) The sales of guaranteed products continued to be depressed, and their contribution to NBV decreased. The subsequent savings business may become the starting point of each company, which will form a good link with the bancassurance channel.
5) the surrender increased, the continuation rate of insurance policies generally declined, and the business quality was under pressure, aggravating the growth pressure of NBV and ev. 6) The number of agents has shrunk significantly, the per capita production capacity of some companies has increased significantly, and the reform results are becoming more and more obvious; However, the cost to production ratio has not improved, and its sustainability remains to be verified by data. In terms of property insurance: 1) the proportion of direct sales channel premiums of listed insurance enterprises increased. Under the influence of comprehensive reform, the cost pressure has increased sharply, and the proportion of direct sales channels with lower costs has generally increased. 2) From pressure to stabilization, the auto insurance business continued its good growth momentum. 3) The comprehensive cost rate of listed insurance companies remained stable, showing the leading advantages of leading companies in cost control; The profits of some companies' non auto business have improved, the structure has been continuously optimized, and their contribution to property insurance premiums and profits has increased.
Asset side: in 2021, due to the realization of part of the price difference floating profit income, the investment performance of listed insurance enterprises was generally good. At the same time, affected by the high volatility of interest rates and the intensification of fluctuations in the equity market, the profit and loss of changes in fair value of some insurance enterprises fluctuated. In terms of asset allocation of major categories, some companies have significantly increased the allocation of bond assets in order to seek more stable income. The allocation proportion of non-standard assets may be generally reduced due to the "shortage of high-quality assets". Under the implementation of the second generation and the new accounting standards, it is expected that listed insurance companies will pay more attention to stable asset allocation, stabilize investment income and better match the duration of assets and liabilities. It is expected that long-term debt and high dividend assets will still be an important direction.
Investment suggestion: looking forward to 2022, we believe that the main bad news in the insurance sector has been basically cleared, and the allocation value of undervalued insurance stocks has increased under the expectation of improvement at both ends of assets and liabilities. Liability side: 1) at the demand level, the savings business may pick up under the background of intensified market fluctuations, and the guarantee business will also follow the channel and product reform to dig deeper into the space for insurance coverage. 2) In terms of supply, 2021 is the most intense year of human resources reform. In 2022, the stabilization of human resources and the improvement of team quality may bring new orders, and the growth rate will rise quarter by quarter; Bancassurance channels are also expected to maintain rapid growth driven by savings business. In the era of comprehensive reform of property insurance, the growth rate of auto insurance premium is expected to gradually stabilize, the cost and pricing advantages of leading companies will promote the continuous optimization of the pattern, and the premium and profit may be further concentrated to large companies. Asset side: at present, the duration gap of insurance companies continues to narrow, and the resilience affected by interest rate fluctuations is increasing; Considering the mitigation of real estate risks and the continuous efforts of the steady growth policy, the expectation of economic repair is enhanced, the long-term interest rate or fluctuation is upward, and the investment expectation is stable. In 2021, the sharp decline of manpower and the thunderstorm of investment of some companies have basically cleared up. Considering that the current sector valuation and market positions are low, the dividend and dividend rate are high, and the allocation value is improved. Individual stocks focus on [ Ping An Insurance (Group) Company Of China Ltd(601318) ] that is expected to be significantly improved at the investment end, [ China Life Insurance Company Limited(601628) ] that has scale advantages at the channel end, and [ China Pacific Insurance (Group) Co.Ltd(601601) 601 ] that is deeply cultivated for personal insurance transformation.
Risk warning: the equity market fluctuates sharply; Stricter supervision cycle; The transformation progress is significantly lower than expected
