Key investment points
Overall: in March, the original premium income of listed insurance companies was + 1.11% year-on-year, and the original premium income of property insurance was + 10.15% year-on-year
March: the original premium income of life insurance business of listed insurance companies (TPL + Ping An Life Insurance + Guoshou + Xinhua + Taiping Life Insurance + PICC Life Insurance) totaled 172.8 billion yuan, a year-on-year increase of + 1.11%; The original premium income of property insurance business (PICC + Ping An Property + Taiping property + Taiping property) totaled 106.7 billion yuan, a year-on-year increase of + 10.15%.
From January to March: the original premium income of life insurance business (CPIC + Ping An Life + Guoshou + Xinhua + Taiping Life + PICC Life) of listed insurance enterprises totaled 757.9 billion yuan, a year-on-year increase of + 0.01%, and the original premium income of property insurance business (PICC + Ping An Property + Taiping property + Taiping property) totaled 281.6 billion yuan, a year-on-year increase of + 11.83%.
Life insurance: CPIC life insurance increased the most by + 10.09% year-on-year in March, and PICC increased the most by + 17.94% year-on-year from January to March
March: TPL 25.6 billion yuan (year-on-year + 10.09%), Ping An Life 33.8 billion yuan (year-on-year – 4.71%), China Life Insurance Company Limited(601628) 73.8 billion yuan (year-on-year + 5.58%), New China Life Insurance Company Ltd(601336) 185 billion yuan (year-on-year – 4.12%), TPL 14.7 billion yuan (year-on-year + 1.31%), PICC Life 6.4 billion yuan (year-on-year – 24.58%).
January March: TPL 99.5 billion yuan (year-on-year + 4.23%), Ping An Life 162.6 billion yuan (year-on-year – 2.27%), China Life Insurance Company Limited(601628) 315 billion yuan (year-on-year – 2.75%), New China Life Insurance Company Ltd(601336) 649 billion yuan (year-on-year + 2.36%), TPL 56.2 billion yuan (year-on-year – 3.15%), PICC Life 59.8 billion yuan (year-on-year + 17.94%).
Property insurance: Taiping property increased the most year-on-year by + 14.67% in March, and Taiping property increased the most year-on-year by + 13.84% from January to March
March: PICC Property Insurance 60.4 billion yuan (YoY + 10.16%), Ping An Property Insurance 25.5 billion yuan (YoY + 9.19%), CPIC property insurance 18.3 billion yuan (YoY + 10.88%), and Taiping property insurance 2.5 billion yuan (YoY + 14.67%).
From January to March: PICC Property Insurance 152.1 billion yuan (year-on-year + 12.24%), Ping An Property Insurance 73 billion yuan (year-on-year + 10.34%), CPIC property insurance 49.3 billion yuan (year-on-year + 13.84%), and Taiping property insurance 7.1 billion yuan (year-on-year + 5.55%).
We reiterate our view in the summary of the annual report: 1) the pressure on Ping An’s liability side continues. We judge that it is caused by the inertial decline of the company’s manpower scale. Q222 company has invested a relatively high increase in the life of nbvm. If the sales situation is good, it may drive the marginal improvement of NBV. On the other hand, the company’s asset side impairment pressure is reduced, and the probability of the annual total return on investment rising to more than 5% is high; 2) The idea of stable scale operation of Taibao continues. The growth rate of q122 life insurance and property insurance premiums leads the industry. Nbvm has established a low base in 2021 and is optimistic about the stability of the company’s “volume” and “price”; 3) Xinhua nbvm has been significantly lower than its peers, and the probability of another sharp decline is low. The core focus is the size of the company’s agents and per capita production capacity; 4) With the progressive reform of Guoshou, the pressure on the liability side may continue. In addition, since March, the spread of the epidemic in many cities across the country may cause some trouble for insurance enterprises to develop their industries.
Investment suggestion: as of April 20, the corresponding 2022ep / EV share prices of listed insurance companies were Ping An 0.55x, CPIC 0.37x, Xinhua 0.34x and Guoshou 0.58x, which were basically at their historical lows and had a high margin of safety. Based on the strength of reform, insurance business operation and asset side flexibility, Ping An, CPIC, Xinhua and Guoshou are recommended in turn.
Risk tips: loss of agents, epidemic spread beyond expectations, capital market fluctuations, long-term interest rate decline, etc.
