Due to the fluctuation of the capital market in the first quarter and the high base in the same period last year, the first quarterly report of A-share listed insurance companies is not good-looking.
According to the statistics of China first finance, the net profit attributable to the parent company in the first quarter of the five A-share listed insurance companies totaled 51.361 billion yuan, a year-on-year decrease of 36.35%. The life insurance industry since the transformation is still at the bottom stage. Some insurance enterprises maintain the growth of new orders by changing the channel structure and product structure, but the overall value of new business is still under pressure. However, the transformation quality indicators of some insurance enterprises have stabilized and improved.
investment income decline + high base, net profit under pressure
In the first quarter of this year, the five major A-share listed insurance companies realized a total net profit of 51.361 billion yuan, a year-on-year decrease of 36.35% compared with 80.694 billion yuan in the same period last year. The net profit attributable to the parent company of the five major insurance companies showed a double-digit year-on-year decline, of which New China Life Insurance Company Ltd(601336) ( New China Life Insurance Company Ltd(601336) . Sh, 01336. HK) decreased the most, reaching 78.7%; The net profit attributable to the parent company of The People’S Insurance Company (Group) Of China Limited(601319) ( The People’S Insurance Company (Group) Of China Limited(601319) . Sh, 01339. HK) with the smallest decline also decreased by 12.9% year-on-year.
Listed insurance companies have attributed the decline in net profit attributable to the parent company in the first quarter to the combined impact of fluctuations in the capital market and the high base in the same period last year.
According to the data, the equity market fluctuated and fell in the first quarter of 2022. In the first quarter, the Shanghai stock index fell by 10.65% and the Shanghai and Shenzhen 300 fell by 14.53%; At the same time, affected by the high base of main listed insurance companies in the equity market actively cashing in floating profits and realizing investment returns in the same period last year, the total investment return of listed insurance companies fell sharply year-on-year.
From the performance of the total return on investment of listed insurance companies, except that The People’S Insurance Company (Group) Of China Limited(601319) did not disclose the data of the first quarter, the total return on investment of the other four listed insurance companies decreased by 0.8 percentage points to 3.9 percentage points year-on-year, of which Ping An Insurance (Group) Company Of China Ltd(601318) ( Ping An Insurance (Group) Company Of China Ltd(601318) . SH, 02318. HK) decreased the least and New China Life Insurance Company Ltd(601336) decreased the most. However, from the absolute value of the total return on investment, among the three listed insurance companies still implementing the old accounting standards for financial instruments, New China Life Insurance Company Ltd(601336) although the decline was the largest, it still led by the absolute value of 4%, while China Life Insurance Company Limited(601628) ( China Life Insurance Company Limited(601628) . Sh, 02628. HK) and China Pacific Insurance (Group) Co.Ltd(601601) ( China Pacific Insurance (Group) Co.Ltd(601601) 601. Sh, 02601. HK) reached 3.88% and 3.7% respectively. The Ping An Insurance (Group) Company Of China Ltd(601318) profit from the implementation of the new accounting standards is most affected by the changes in asset valuation, and the total return on investment is only 2.3%.
Meanwhile, Guotai Junan Securities Co.Ltd(601211) said that as of the end of the first quarter of 2022, the yield of 10-year Treasury bonds was 2.79%, down 40 basis points year-on-year. Subject to the continuous downward channel of long-term interest rate, the net investment income of listed insurance companies is also under pressure Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , China Life Insurance Company Limited(601628) in the first quarter, the net return on investment decreased slightly by 0.08 percentage points to 0.2 percentage points, in the range of 3.3% ~ 4%.
China Securities Co.Ltd(601066) said that there was no need to worry about the short-term yield fluctuation of listed insurance companies, and the funds of insurance companies focused on the stability of medium and long-term investment yield. It is expected that under the second phase of “compensation generation II”, the equity equity investment funds of various companies will still be the focus of the improvement of yield, and it is necessary to find a balance between volatility and yield in the future.
In addition, in the first quarter of last year, due to the good performance of investment and the blowout of product sales caused by the switching between the old and new standards of serious illness insurance, it also created the beautiful performance of listed insurance companies in the first quarter of last year. New China Life Insurance Company Ltd(601336) and China Life Insurance Company Limited(601628) , which had the largest decline in net profit in the first quarter of this year, achieved a high base of 36% and 67.3% year-on-year increase in net profit attributable to the parent in the first quarter of last year.
life insurance is still not easy
The pain of transformation has become the key word of listed life insurance companies in the past two years, and this trend has continued in the first quarter of this year.
From the perspective of the new single premium of listed insurance companies, it shows a differentiation situation of three decreases and two increases. CPIC life insurance and PICC Life Insurance have achieved double-digit year-on-year growth of new single premium.
However, from the perspective of the channel structure and premium structure of the above two life insurance companies, CPIC life insurance changed the strategy of “big individual insurance” in the past and restarted the bancassurance channel. Its new insurance business in the bancassurance channel reached 11.03 billion yuan, a year-on-year surge of 1108.1%, and surpassed the agent channel of 9.219 billion yuan, becoming the largest contribution channel of new single premium in China Pacific Insurance (Group) Co.Ltd(601601) first quarter, directly promoting the year-on-year growth of new single premium in China Pacific Insurance (Group) Co.Ltd(601601) first quarter by 22%. In the premium structure of CPIC life insurance, the proportion of individual insurance channel premium decreased from more than 90% in the past to 79.76% in the first quarter of this year; Similarly, among the new long-term insurance premiums of 31.915 billion yuan of PICC Life Insurance, the single premium reached 19.985 billion yuan, a year-on-year increase of 125.4%.
Guotai Junan Securities Co.Ltd(601211) analysis said that under the background of the net worth of bank financial products and the decline of long-term interest rate, the attraction of bancassurance products with income certainty has greatly increased. Some listed insurance companies strategically restart bancassurance to drive the growth of new orders as a whole, but the rapid increase of the proportion of low-value bancassurance business has made limited contribution to value.
In fact, Ping An Insurance (Group) Company Of China Ltd(601318) and China Life Insurance Company Limited(601628) , which disclosed the value of new business, showed a negative growth rate of 33.7% and 14.3% respectively in the first quarter, and industry analysts generally believe that the pressure on the value of new business is a common phenomenon of life insurance companies.
While focusing on the development of multiple channels, the personal insurance channel reform of listed insurance enterprises is still one of the most important factors affecting their future performance.
From the situation of Ping An Insurance (Group) Company Of China Ltd(601318) and China Life Insurance Company Limited(601628) who disclosed manpower data in the first quarter, compared with the manpower scale at the end of last year, the scale of individual insurance team continued to decline by 10.4% and 4.9% month on month respectively. In the view of industry analysts, the manpower decline trend of the two listed life insurance companies has slowed down compared with the 40% year-on-year decline Guotai Junan Securities Co.Ltd(601211) it is estimated that the main reason is that companies made a good start in the sprint, increased staff in the fourth quarter of last year and relatively weakened assessment in the first quarter. With the successful start coming to an end, it is expected that the manpower scale of each company will still decline significantly after the manpower is cleared at the end of April.
However, the transformation quality indicators of some insurance enterprises have stabilized and improved Ping An Insurance (Group) Company Of China Ltd(601318) said that by the end of March 2022, the proportion of agents with college degree or above had increased by 3.5 percentage points year-on-year China Pacific Insurance (Group) Co.Ltd(601601) ‘s data show that its agent’s monthly per capita insurance business income in the first year increased by 19.9% year-on-year in the first quarter.
China Securities Co.Ltd(601066) said that from the results of channel reform, the quality of channel personnel is in a trend of improving. After the transformation of the life insurance industry in recent years, the channel structure has been improved. However, Guotai Junan Securities Co.Ltd(601211) said that at present, the per capita production capacity of life insurance is lower than expected, which is difficult to make up for the slowdown of new orders caused by the sharp decline in manpower.
Guotai Junan Securities Co.Ltd(601211) it is estimated that NBV (new business value) of listed insurance companies will still face deep negative growth in 2022. On the one hand, the industry is still in the period of transformation and adjustment under the influence of supply-demand mismatch. On the other hand, sales supervision will continue to be strict, which is expected to accelerate the industry to clear out the business model of low-quality development.
However, the above two analyst teams said that the core problem of the current life insurance market dilemma is the imbalance between supply and demand caused by the great changes in customer demand and market environment. Therefore, supply side reform is still the core strategic layout that listed insurance enterprises should focus on. In recent years, insurance companies have also begun to accelerate the layout of products and supporting service systems based on customer needs, which will help insurance companies get out of the development bottleneck as soon as possible and lay the foundation and build barriers for future recovery. The company that takes the lead in reform and has a firm strategic direction will take the lead in speed and efficiency.
