Core view:
The insurance sector fluctuated last week
Last week (2022 / 04 / 1-04 / 8), the market rose and fell, but the insurance sector remained high and volatile, and the overall performance was stronger than the market. Finally, the CSI 300 index closed at 423077, down 0.55%; Insurance (Shenwan) closed at 102860, up 1.44%, outperforming the CSI 300 index by 1.99pct. In terms of individual insurance stocks, all the five listed insurance companies rose, of which China Life Insurance Company Limited(601628) rose the most, up 4.08%, followed by New China Life Insurance Company Ltd(601336) up 3.03%, China Pacific Insurance (Group) Co.Ltd(601601) 601 , The People’S Insurance Company (Group) Of China Limited(601319) and Ping An Insurance (Group) Company Of China Ltd(601318) up 2.32%, 1.53% and 1.11% respectively.
Summary of the annual report: in 2021, the net profit attributable to the parent of the five major insurance enterprises was 215958 billion yuan, a year-on-year decrease of 14.41%.
Affected by the pressure of liability side life insurance, Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) performed poorly, and Ping An Insurance (Group) Company Of China Ltd(601318) became the only company with decreased revenue and net profit. On the liability side, the growth of life insurance of listed insurance companies continued to be under pressure. Affected by this, although Ping An Insurance (Group) Company Of China Ltd(601318) is still the leader in the industry, with the largest revenue and net profit, it is also the only company with decreased revenue and net profit In Ping An Insurance (Group) Company Of China Ltd(601318) 2021, the revenue was 1180444 billion yuan, a year-on-year decrease of 3.11%, and the net profit was 101618 billion yuan, a year-on-year decrease of 28.99% New China Life Insurance Company Ltd(601336) income scale is the smallest, but the growth rate of total income is the fastest In China Pacific Insurance (Group) Co.Ltd(601601) 2021, the total revenue was 440643 billion yuan, a year-on-year increase of 4.37%, and the net profit was 26.834 billion yuan, a year-on-year increase of 9.15%. Ranking by revenue growth rate, Ping An Insurance (Group) Company Of China Ltd(601318) . 3) New China Life Insurance Company Ltd(601336) (4.57) The People’S Insurance Company (Group) Of China Limited(601319) (7.82) China Pacific Insurance (Group) Co.Ltd(601601) (9.15).
The People’S Insurance Company (Group) Of China Limited(601319) surrender rate is significantly higher than that of peers. Ranking of surrender rates of five insurance companies, The People’S Insurance Company (Group) Of China Limited(601319) (5.9) Ping An Insurance (Group) Company Of China Ltd(601318) (2.23) New China Life Insurance Company Ltd(601336) (2) China Pacific Insurance (Group) Co.Ltd(601601) (1.7) China Life Insurance Company Limited(601628) (1.2).
On the asset side, The People’S Insurance Company (Group) Of China Limited(601319) performed well. Among the five insurance companies, The People’S Insurance Company (Group) Of China Limited(601319) all rank among the top two in terms of net return on investment and total return on investment. According to the rate of return on net investment, the The People’S Insurance Company (Group) Of China Limited(601319) 8) China Pacific Insurance (Group) Co.Ltd(601601) (5.7) China Life Insurance Company Limited(601628) (4.98) Ping An Insurance (Group) Company Of China Ltd(601318) (4) Ping An Insurance (Group) Company Of China Ltd(601318) due to China Fortune Land Development Co.Ltd(600340) impairment provision, the total return on investment is relatively poor.
From the perspective of premium in the first two months of this year, life insurance is still under pressure
The cumulative growth rates of life insurance premium income of Ping An, Guoshou, CPIC, Xinhua and PICC from January to February were – 1.61%, – 5.04%, 2.34%, 5.20% and 26.45% respectively. Compared with Guoshou, the PICC with the largest growth lags behind by 31.49 PCT. In terms of monthly income growth, the monthly income growth of Ping An, Guoshou, CPIC, Xinhua and PICC in February was – 4.70%, – 3.13%, 14.85%, 11.15% and 5.69% respectively. Compared with the highest CPIC, Ping An with the lowest growth rate was 19.55 PCT behind. In particular, as the two major life insurance giants, the premium income of Ping An and Guoshou showed negative growth, reflecting that the fundamental data in the first half of the year were still under pressure due to the base effect.
On the contrary, in terms of property insurance, Ping An, CPIC and PICC maintained a growth rate of more than 10%, increasing by 10.97%, 15.66% and 13.65% respectively. The year-on-year growth rate in a single month is even brighter, especially for CPIC. The growth rate in a single month in February was as high as 22.53%, while Ping An and PICC increased by 17.64% and 13.39%. Due to the rapid growth of non auto insurance business and the return of auto insurance business to the growth channel, the growth of property insurance companies, especially leading property insurance companies, will continue.
The life insurance data in the first half of the year can hardly be improved
At present, the performance of the insurance sector is sluggish, and the reform will not be achieved overnight. Under the base effect, the fundamental data in the first half of the year, especially the life insurance data, may be unsatisfactory. However, on the whole, although the insurance sector does not have the conditions for a sharp rise, the current valuation of the insurance sector is low, and the kinetic energy of the sharp decline is basically exhausted. Under the premise of the national policy of stable growth, it is more likely that an important bottom of the insurance sector will appear this year. It is suggested to focus on the insurance companies that take the lead in restoring rapid growth, as well as the large insurance companies that can continuously launch products to meet customer needs and establish a close customer service architecture system. These companies may take the lead in leading the industry to get out of the bottleneck.
Risk tip: the negative impact of the epidemic on the insurance business is long-term, and the transformation speed and effect of channels and business models are less than expected.
