Core view:
The insurance sector fell sharply with the market
Last week (2022 / 04 / 18-04 / 22), the market fell sharply, and the insurance sector fell with the market. Finally, the CSI 300 index closed at 399583, down 4.67%; Insurance (Shenwan) closed at 966.71, down 4.12%, outperforming the Shanghai and Shenzhen 300 index by 0.55pct In terms of individual insurance stocks, all the five listed insurance companies fell, of which The People’S Insurance Company (Group) Of China Limited(601319) fell the most, down 4.11%, Ping An Insurance (Group) Company Of China Ltd(601318) also fell more than 4%, and China Pacific Insurance (Group) Co.Ltd(601601) 601 , China Life Insurance Company Limited(601628) and New China Life Insurance Company Ltd(601336) all fell more than 3%.
Base effect and capital market impact, New China Life Insurance Company Ltd(601336) first quarter net profit is expected to decline by more than 70%. On the evening of April 22, New China Life Insurance Company Ltd(601336) announced that after preliminary calculation, the net profit attributable to shareholders of the parent company in the first quarter of 2022 is 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, with 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%. The main reason is: in the case 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 large year-on-year changes in net profit in the current period.
The operation of the company was normal. In the first quarter, the accumulated premium income of the original insurance was 64.890 billion yuan, a year-on-year increase of 2.4%.
Through New China Life Insurance Company Ltd(601336) , due to the same factors, that is, under the influence of the base effect, while the sharp decline of the stock market affects the return on equity investment and the low interest rate suppresses the return on fixed income investment, it is expected that other listed insurance companies will not perform well in the first quarter.
Personal pension ushers in a great development opportunity, which may bring 300 billion yuan of net profit increment to the insurance industry in the future.
According to the opinions on promoting the development of individual pension issued by the general office of the State Council, the individual pension adopts the individual account system, and the contributions are fully borne by the participants and fully accumulated. The upper limit of individual pension paid by participants is 12000 yuan per year. It is estimated that the scale of China’s second and third pillars in the future will be at least more than 50 trillion yuan, of which the third pillar will give life insurance companies an incremental capital of 6 trillion yuan. Converted by 5% of the investment income, it will bring an annual net profit increment of 300 billion yuan to the insurance company.
It is suggested to pay attention to insurance companies that may take the lead in restoring rapid growth under pressure, and these companies may take the lead in leading industries 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.
