Performance in the first quarter: the value of life insurance is under pressure, and the growth rate of auto insurance premium continues to improve
Growth differentiation of new single premium in the first quarter. In the first quarter of 2022, the year-on-year growth rates of new policy premiums of Guoshou, Ping An, CPIC, Xinhua and PICC were – 1.5%, – 15.4%, 28.4%, – 32.1% and 45.5% respectively. The growth rates of Ping An and Xinhua were significantly under pressure compared with the fourth quarter of last year.
From the demand side, the epidemic has repeatedly led to increased economic uncertainty, slower growth of per capita income and lower overall social demand; From the supply side, the agent exhibition industry is limited, the scale continues to decline, and the traditional insurance products and service model do not match the current demand of policyholders, resulting in the bottleneck of the growth of individual insurance channels.
New business value and new business value ratio fell sharply. In the first quarter of 2022, the NBV of Ping An decreased by 33.7% year-on-year, and the value ratio decreased to 24.6% from 31.4% last year, with a year-on-year decrease of 2.1pct Guoshou NBV also decreased significantly, with a year-on-year growth rate of – 14.3%.
Since 2018, the industry premium has been under pressure, the growth rate of listed insurance companies NBV has decreased significantly, and the overall demand has further shrunk since the epidemic. Under the current situation of supply and demand mismatch, the sales of high-value guarantee business has slowed down, while the savings business has gradually recovered. It is expected that the overall value rate is difficult to rise, and the scale growth will be the core driving force to drive the growth rate of NBV.
The scale of agents continued to decline, but the decline narrowed China Life Insurance Company Limited(601628) personal insurance sales manpower was 780000, down 4.9% from the beginning of the year; Ping An decreased from Shanghai Pudong Development Bank Co.Ltd(600000) at the beginning of the year to 538000, a decrease of 10.4%. Although the channel reform of various insurance companies has gradually stepped into the deep-water area and adjusted in many links such as recruitment and training, the transformation of products and services has not been effective, and it is difficult to solve the income problem in the short term. In the follow-up, we will focus on the product and service situation of various companies and the changes of agent capacity and income.
The growth rate of auto insurance premium returns to the normal level and is optimistic about the optimization of the competition pattern. In the first quarter of 2022, the year-on-year growth rates of property insurance premiums of Ping An, CPIC and PICC were 10.3%, 14.0% and 12.2% respectively. The impact of comprehensive reform on automobile insurance premiums weakened, and the growth rate returned to the normal level. The three companies were 10.4%, 11.8% and 10.9% respectively; The growth rate of non auto insurance was basically stable. Under the background of continuous promotion of comprehensive reform of auto insurance, the advantages of leading insurance enterprises in channel, data and operation will continue to be transformed into advantages in cost rate, which is expected to continue to expand the gap with the industry and look forward to the continuous improvement of the competition pattern in the future.
Investment income fell sharply and profit reserves decreased significantly. In the first quarter of 2022, Guoshou, Ping An, CPIC, Xinhua and PICC realized investment income of 46.99 billion yuan, 96.7 billion yuan, 17.9 billion yuan, 10.78 billion yuan and 15.89 billion yuan respectively, with year-on-year growth rates of – 29.0%, – 79.8%, – 34.6%, – 43.1% and – 9.8% respectively. The accumulated net assets of Guobao and Taibao decreased significantly from 3.38 billion yuan to 8.7 billion yuan, while the accumulated net assets of Guobao and Taibao decreased significantly from 3.7 billion yuan to 8.7 billion yuan, respectively.
Outlook: be optimistic about the continuous repair of the asset side, pay attention to the innovation of products and services, be optimistic about the repair of the asset side, and expect the liability side to return to the upward cycle. On the asset side, the current valuation of the equity market is at a relatively low level, and the long-term interest rate is at a low level. Considering the introduction of the steady growth policy and the impact of overseas inflation and interest rate increase pressure, the equity market and interest rate level are expected to improve, which will effectively drive the profit and valuation recovery of insurance companies. On the liability side, products are the core driving force of premium growth. It is suggested to pay attention to product and service innovation. There may be some improvement under the recent base effect, but the innovation cannot be achieved overnight. It is expected that the value will still be under pressure in the first half of the year. At present, the percentile of industry valuation is less than 1%, which has strong absolute and relative allocation value. It is recommended to pay attention to the allocation of insurance sector. Individual stocks are recommended to China Life Insurance Company Limited(601628) , Ping An Insurance (Group) Company Of China Ltd(601318) .
Risk tips
1. The capital market fell sharply, and the interest rate fell more than expected; 2. Industry regulatory policies have been significantly adjusted.
