The first quarterly report of listed insurance companies is coming!
On the evening of April 22, New China Life Insurance Company Ltd(601336) announced that the net profit attributable to the parent company in the first quarter was preliminarily estimated to be 1.261 billion yuan – 1.892 billion yuan, a year-on-year decrease of 70% – 80%. The main reason is that the net profit base in the same period last year was high, and the investment income decreased in the first quarter of this year due to the downturn of the capital market.
listed insurance companies’ performance reduction in the first quarter of this year has been within expectations. Research institutions have previously analyzed that the weak equity market superimposes the high base of investment income, and it is expected that the overall net profit of listed insurance companies will be under pressure in the first quarter of 2022
Not long ago, New China Life Insurance Company Ltd(601336) management frankly said at the performance conference that there was great investment pressure in the first quarter, but it has responded positively and is still optimistic about the future.
Pre reduction of 70% – 80%
On the evening of April 22, New China Life Insurance Company Ltd(601336) announced that after preliminary calculation, the net profit attributable to the shareholders of the parent company in the first quarter of 2022 was 1.261 billion yuan – 1.892 billion yuan, which is expected to decrease by 4.414 billion yuan – 5.044 billion yuan compared with the same period in 2021, a year-on-year decrease of 70% – 80%; Compared with the same period in 2021, the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses is expected to decrease by 4.418 billion yuan to 5.049 billion yuan, a year-on-year decrease of 70% – 80%.
and in the first quarter of last year, New China Life Insurance Company Ltd(601336) realized a net profit attributable to the parent company of 6.305 billion yuan and a non net profit attributable to the parent company of 6.311 billion yuan
New China Life Insurance Company Ltd(601336) said that the main reason for the expected decline in performance in the first quarter was that under the condition of high net profit base in the same period last year, the investment income decreased due to the downturn of the capital market, resulting in a large year-on-year change in net profit in the current period.
in short, there are two main reasons for the decline in its net profit: one is the high base last year, and the other is the downturn in the capital market and the decrease in investment income this year
Judging from the situation in the first quarter of last year, New China Life Insurance Company Ltd(601336) seized the opportunity of the capital market and achieved better investment income, driving the net profit to increase by 36%, and the net profit attributable to the parent company reached 6.305 billion yuan, setting the highest single quarter profit in the four quarters of last year New China Life Insurance Company Ltd(601336) last year, the annual profit was 14.9 billion yuan. The high profit base achieved in the first quarter of last year also put pressure on the profits in the first quarter of this year.
Since this year, due to the superposition of various factors such as the epidemic, the capital market has fluctuated violently, which has brought great challenges to investors, including insurance funds.
At the online conference of New China Life Insurance Company Ltd(601336) 2021 annual performance on March 30, New China Life Insurance Company Ltd(601336) CEO and President Li Quan once admitted that this year’s capital market situation is very complex and investment pressure is very great. However, he said at that time that he was actively responding to the market situation this year and was still optimistic about the future. On the one hand, China’s overall economic situation is relatively good globally. On the other hand, despite the investment pressure at the beginning of the year, there is still more time for adjustment during the year. Li Quan said that the cash flow of insurance funds is still good, the asset scale is still growing, and New China Life Insurance Company Ltd(601336) still has the strength to carry out more layout and serve the real economy.
From the perspective of underwriting business, the development environment of life insurance industry is severe and complex, and its business is also at a trough in recent years. In terms of premium income, New China Life Insurance Company Ltd(601336) the first quarter was relatively stable, with an original insurance premium income of about 64.9 billion yuan, a year-on-year increase of 2.36%. It is reported that the core regular premium of the company has rebounded steadily, and the renewal premium income has maintained growth.
At present, the growth of premium income of life insurance companies is facing multiple pressures, including a sharp decline in sales manpower, the continuous impact of the epidemic, and the impact of inclusive services such as Huimin insurance. In addition, in the first quarter of last year, due to the full preparation for a good start and the switching between the old and new criteria of serious illness insurance, there was advanced sales, and there was also a high business base, which put pressure on the premium income and new business value of insurance companies this year.
Relatively speaking, the property insurance business sector of listed insurance companies is slightly better, with restorative growth driven by major types of insurance such as auto insurance.
Organization: the performance of listed insurance companies in the first quarter is expected to be under pressure
New China Life Insurance Company Ltd(601336) ‘s announcement on the pre reduction of the first quarterly performance opened the time for the first quarterly performance of listed insurance enterprises.
According to the disclosure arrangement, the five major A-share listed insurance companies will release the first quarterly report from next Wednesday to Friday (the evening of April 27 to 29). Among them, China Life Insurance Company Limited(601628) the first quarterly report was disclosed after hours on April 27, The People’S Insurance Company (Group) Of China Limited(601319) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) was disclosed after hours on April 28, Ping An Insurance (Group) Company Of China Ltd(601318) was disclosed after hours on April 29.
according to previous estimates of several research institutions, the profit performance of listed insurance companies in the first quarter is expected to be under pressure. The main reasons include: first, the volatility of the equity market increased, the CSI 300 index fell by more than 14% in the first quarter, and the equity investment of insurance companies was under pressure; Second, the overall interest rate is low, which is not conducive to the fixed income investment income of insurance assets; Third, after the listed insurance companies cashed in the floating profit in time last year, the income and profit base were high
In addition, the supplementary provision of reserves in recent years is also an important factor affecting the profits of listed insurance companies Guotai Junan Securities Co.Ltd(601211) securities non bank team believes that the downward trend of 750 day treasury bond yield curve slowed down in the first quarter of this year. Considering that the provision for insurance contracts is usually only China Life Insurance Company Limited(601628) based on the change of discount rate in the first quarter, it is expected to bring a marginal positive contribution to China Life Insurance Company Limited(601628) net profit; Ping An Insurance (Group) Company Of China Ltd(601318) benefited from the low base brought by China Fortune Land Development Co.Ltd(600340) impairment in the first quarter of last year, and the profit in the first quarter of this year is expected to achieve restorative growth.
Several research reports predict that in the first quarter of this year, among the five major A-share listed insurance companies, except Ping An Insurance (Group) Company Of China Ltd(601318) slightly increased, the net profit attributable to the parent of other listed insurance companies is expected to decline.
However, looking forward to the performance of this year, some people in the insurance industry still maintain certain optimistic expectations. On the one hand, many complex factors affecting the market are expected to be further clarified in the second half of the year, when the capital market opportunities may benefit the equity investment of insurance companies; At the same time, if the subsequent interest rate can rise periodically, it will also be good for insurance companies.
