Recently, A-share listed insurance companies have successively disclosed the operating data of the first quarter of 2022.
Six insurance companies, including China Life Insurance Company Limited(601628) , The People’S Insurance Company (Group) Of China Limited(601319) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) , and Guohua life insurance ( Hubei Biocause Pharmaceutical Co.Ltd(000627) ), achieved a total insurance business income of about 1.03 trillion yuan, an increase of 4% year-on-year.
Among the six companies, only China Life Insurance Company Limited(601628) one company’s premium income is still negative growth, and the other several insurance companies are positive growth; From the perspective of net profit performance, affected by the fluctuation of equity market in the first quarter and other factors, the net profit of listed insurance enterprises decreased significantly, with an average decrease of 38.9%, and New China Life Insurance Company Ltd(601336) decreased the most, 78.7%.
net profit decreased by 38.9% on average
affected by the fluctuation of the equity market, the investment income of all insurance companies decreased significantly, driving the general decline in the net profit of all companies
China Life Insurance Company Limited(601628) in the first quarter, the company achieved a premium income of 315011 billion yuan, a year-on-year decrease of 2.7%, and a net profit attributable to the parent company of 15.178 billion yuan, a year-on-year decrease of 13.407 billion yuan, a decrease of 46.9%. In the first quarter, the investment income was 53.991 billion yuan, a sharp decrease of 19.493 billion yuan, which was the main reason for the decline of the company’s net profit.
Other listed companies have similar problems.
The People’S Insurance Company (Group) Of China Limited(601319) in the first quarter, the insurance business income reached 233984 billion yuan, an increase of 14.3% year-on-year; The net profit attributable to the parent company was 8.744 billion yuan, a year-on-year decrease of 1.29 billion yuan or 12.9% compared with 10.034 billion yuan in 2021. The current investment income was 16.571 billion yuan, a year-on-year decrease of 1.424 billion yuan,
Among them, PICC Property Insurance realized a total investment income of 6.540 billion yuan in the first quarter, a year-on-year decrease of 11.6%, driving the net profit to decrease by 3.2% year-on-year to 8.654 billion yuan.
Ping An Insurance (Group) Company Of China Ltd(601318) in the first quarter, the net profit attributable to the shareholders of the parent company was 20.658 billion yuan, a year-on-year decrease of 24.1%, which was also mainly affected by the fluctuation of the capital market. In terms of operating profit performance, in the first quarter of 2022, Ping An achieved an operating profit attributable to the shareholders of the parent company of RMB 43.047 billion, an increase of 10.0% year-on-year.
The operating profit is based on the net profit of the financial statements, excluding the income statement items with large short-term volatility and the one-time major items that the management believes are not part of the daily operating income and expenditure and others.
China Pacific Insurance (Group) Co.Ltd(601601) group achieved an insurance business revenue of 149654 billion yuan in the first quarter, with a year-on-year increase of 7.3%; The net profit was 5.437 billion yuan, a year-on-year decrease of 36.4%.
New China Life Insurance Company Ltd(601336) first quarter net profit decreased the most, with a decrease of 78.7% New China Life Insurance Company Ltd(601336) explained that 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 a year-on-year decrease in net profit in the current period.
Due to the optimization of insurance business structure and other factors, the net profit of insurance business decreased to RMB 15.14 billion in the first quarter, with a year-on-year increase of RMB 5.07 billion.
Since the beginning of this year, the A-share market has fallen by a large margin, and the market interest rate range has fluctuated, but the credit spread has increased. Due to the influence of international and Chinese comprehensive factors, the overall investment income of insurance companies is under pressure.
By the end of the first quarter, China Life Insurance Company Limited(601628) invested assets of 4.72 trillion yuan. In the first quarter of 2022, China Life Insurance Company Limited(601628) achieved a total investment return of 44.558 billion yuan, with a simple annualized total investment return of 3.88%; The net investment income was 45.814 billion yuan, a year-on-year increase of 10.7%, and the simple annualized net investment income rate was 4%.
As of March 31, 2022, the scale of Ping An Group’s insurance fund portfolio was nearly 4.1 trillion yuan, an increase of 4.6% over the beginning of the year. In the first quarter of 2022, the annualized net return on investment of insurance fund portfolio was 3.3%, and the annualized total return on investment was 2.3%.
By the end of the first quarter, the investment assets of CPIC group were about 1.87 trillion yuan, an increase of 3% over the end of the previous year. In the first quarter of 2022, the annualized net return on investment of the company’s investment assets was 3.7%, a year-on-year decrease of 0.2 percentage points; The annualized total return on investment was 3.7%, down 0.9 percentage points year-on-year.
By the end of March 2022, New China Life Insurance Company Ltd(601336) investment assets amounted to 1.1 trillion yuan, an increase of 1.2% over the end of the previous year. In the first quarter of 2022, the company’s annualized total return on investment was 4%, a year-on-year decrease of 3.9 percentage points.
life insurance transformation continues to be under pressure
in recent years, the life insurance industry has continued to transform. In addition, affected by covid-19 pneumonia, it is difficult to fully release the insurance consumer demand, and the development of the industry is facing great challenges
Large insurance companies have always been the wind vane of the achievements of industry transformation. From the life insurance performance disclosed by listed companies, the overall development of life insurance business of listed insurance companies continues to be under pressure, but the business structure has been optimized and there is a slow recovery trend.
For example, China Life Insurance Company Limited(601628) , which has always been the largest insurance premium in the industry, decreased by 5.34% year-on-year in January this year, but the decline narrowed in February. The decline in premium income in the first two months fell to 5.04%. In the first quarter, the premium income reached 315011 billion yuan, a year-on-year decrease of 2.7%, and the decline narrowed further.
The growth rate of new insurance premiums has not become positive. In the first quarter, the new single premium was 100895 billion yuan, a year-on-year decrease of 1.5%; The renewal premium was 214116 billion yuan, a year-on-year decrease of 3.3%; The value of new business decreased by 14.3% year-on-year.
Although the first year’s regular premium decreased by 4.3% year-on-year, the decline was significantly improved compared with the same period in 2021; The first-year premium of 10 years and above was 19.106 billion yuan, and the proportion of the first-year premium of 10 years and above in the first-year premium increased steadily. The surrender rate was 0.28%, a year-on-year decrease of 0.10 percentage points.
By the end of the first quarter, China Life Insurance Company Limited(601628) total sales manpower was 846000, including 780000 personal insurance sales manpower, and the scale of the team decreased slightly quarter on quarter.
In the first quarter of 2022, the new business value of Ping An Life Insurance and health insurance business was 12.589 billion yuan, a year-on-year decrease of 33.7%, and the new business value ratio was 24.6%, a year-on-year decrease of 6.8 percentage points. The number of personal life insurance sales agents was 537900, a decrease of 62500 compared with the end of 2021.
Since last year, listed insurance companies have strengthened the fine management of individual insurance channels and individual insurance sales teams, and began to actively expand multiple channels.
For example, CPIC life insurance realized an insurance business income of 99.45 billion yuan in the first quarter, a year-on-year increase of 4.2%. The insurance business income from agent channels was 79.320 billion yuan, a year-on-year decrease of 10.0%. However, at the beginning of the year, CPIC life insurance fully launched the implementation of the first phase of the “long voyage action”, focusing on the core manpower, promoting the growth of the team and improving the production capacity of the team. In the first quarter, the company’s agent’s monthly per capita insurance business income in the first year increased by 19.9% year-on-year; Core manpower increased month on month, and the per capita capacity of core manpower increased year-on-year and month on month. The 13-month policy continuation rate was 89.0%, with a year-on-year increase of 5.3 percentage points.
At the same time, diversified channels gradually developed. In the first quarter, CPIC life insurance bancassurance channel realized an insurance business revenue of 11.666 billion yuan, a year-on-year increase of 892.9%. The group insurance business strengthened the development of professional group projects, and achieved an insurance business revenue of 8.443 billion yuan in the first quarter, a year-on-year increase of 39.1%.
In the first quarter of 2022, New China Life Insurance Company Ltd(601336) achieved a total premium income of 64.890 billion yuan, with a year-on-year increase of 2.4%. Among them, due to the continuous impact of covid-19 pneumonia epidemic and the reduction of marketing manpower, the first-year regular premium of long-term insurance was 8.566 billion yuan, with a year-on-year decrease of 18.3%, of which the regular premium of 10 years and above decreased by 63.3%; The renewal premium was 42.364 billion yuan, a year-on-year increase of 8.0%; The short-term insurance premium was 1.43 billion yuan, a year-on-year decrease of 41.4%.
Similar to CPIC’s multi-channel strategy, New China Life Insurance Company Ltd(601336) bancassurance channel made great efforts. In the first quarter, the total premium income was 21.241 billion yuan, an increase of 25.7% year-on-year, of which the first year premium of long-term insurance was 15.247 billion yuan, an increase of 8.4% year-on-year; The renewal premium was 5.988 billion yuan, a year-on-year increase of 112.3%.
PICC Life Insurance realized a premium income of 59.75 billion yuan in the first quarter, a year-on-year increase of 17.9%; Realized 38.826 billion yuan of regular premium income of original insurance; The net profit was 2.187 billion yuan, a year-on-year decrease of 33.5%. However, the performance of human health insurance was outstanding, and the premium income of the original insurance was 20.486 billion yuan, a year-on-year increase of 19.2%; The net profit was 651 million yuan, a year-on-year increase of 361.7%.
property insurance premiums increased by more than 10%
In terms of property insurance, the momentum of continuous recovery is still continuing. In addition to the bottom of auto insurance business, non auto insurance business has also maintained a good growth trend. The “three big players” – PICC Property Insurance, Ping An Property Insurance and CPIC property insurance increased by more than 10% in the first quarter, and the comprehensive cost rate was well controlled as a whole.
Specifically, PICC Property and casualty insurance realized a premium income of 152139 billion yuan in the first quarter, a year-on-year increase of 12.2%; The underwriting profit was 4.316 billion yuan, a year-on-year increase of 10.8%; The loss ratio was 70.5%, with a year-on-year increase of 0.2 percentage points; The expense rate was 25.1%, a year-on-year decrease of 0.3 percentage points; The comprehensive cost rate was 95.6%, a year-on-year decrease of 0.1 percentage points.
Previously, affected by the comprehensive reform of auto insurance, the monthly premium growth of PICC Property Insurance Auto Insurance slowed down, and even showed negative growth for several months. Since the end of 2021, it has continued to grow significantly and positively, helping the overall premium growth of the company to pick up.
This trend also appears in other large property insurance companies
In the first quarter of this year, the premium income of Ping An Property Insurance was 73.018 billion yuan, a year-on-year increase of 10.3%, and the comprehensive cost rate was 96.8%, a year-on-year increase of 1.6 percentage points.
CPIC property insurance realized an insurance business income of 49.864 billion yuan in the first quarter, with a year-on-year increase of 14.0%, and the growth rate of premium was the fastest among the “three big players”. Among them, the income from auto insurance business was 24.438 billion yuan, a year-on-year increase of 11.8%; Non auto insurance business income was 25.426 billion yuan, a year-on-year increase of 16.2%. The comprehensive cost ratio was 99.1%, a year-on-year decrease of 0.2 percentage points, of which the comprehensive loss ratio was 70.4%, a year-on-year increase of 1.8 percentage points; The comprehensive expense rate was 28.7%, a year-on-year decrease of 2.0 percentage points.
China Merchants Securities Co.Ltd(600999) analysis shows that the life insurance business continued to be under pressure in the first quarter, and companies also continued to promote the clearing of channels and the transformation of products and services. Considering the quarterly decline of the base, it is expected that the decline of new orders in the second quarter is expected to usher in marginal improvement. Under the development tone of “steady growth” throughout the year, the non vehicle business is expected to maintain good development and further enhance its profitability. At present, the prosperity of the property insurance industry has improved significantly. Head insurance companies are expected to achieve stable growth in premium scale and steady increase in market share by virtue of pricing and scale advantages.
