As of May 18, the premium income of the five major A-share listed insurance companies had been released by April 2022, with a total premium income of about 1.17 trillion yuan, a year-on-year increase of 3.45%.
In terms of life insurance business, the epidemic control hindered the development of offline agents. Except New China Life Insurance Company Ltd(601336) and PICC Life Insurance, which achieved a growth of 12.9% through bancassurance channels, the performance of other life insurance companies is still under pressure. In terms of property insurance business, due to the impact of the epidemic in some parts of China, the decline of new car sales led to the slowdown of auto insurance growth.
Guotai Junan Securities Co.Ltd(601211) non bank financial team pointed out that under the dual influence of the mismatch between supply and demand and the impact of the epidemic on the offline exhibition of agents, the demand for serious diseases has weakened significantly, while the value rate of listed insurance companies has declined under the strategy of focusing on savings products, which is expected to be difficult to alleviate the pressure on the value of new businesses. However, it is still optimistic about the development prospect of the industry to meet the needs of customers’ health security, wealth management and pension inheritance for a long time.
epidemic repeatedly dragged down the life insurance exhibition industry, and the performance of life insurance companies was differentiated
Overall, in the first April of this year, The People’S Insurance Company (Group) Of China Limited(601319) , China Life Insurance Company Limited(601628) , Ping An Insurance (Group) Company Of China Ltd(601318) , China Pacific Insurance (Group) Co.Ltd(601601) , New China Life Insurance Company Ltd(601336) , New China Life Insurance Company Ltd(601336) respectively realized the premium income of original insurance of 276.16 billion yuan, 343.5 billion yuan, 304645 billion yuan, 173.23 billion yuan and 76.474 billion yuan, with a year-on-year increase of 13.88%, – 2.69%, 0.68%, 6.23% and 3.83%.
In terms of business, the life insurance business of listed insurance companies is still under pressure, showing a situation of “three rises and two falls”. In the first four months, PICC Life Insurance performed well, achieving an original premium income of 63.227 billion yuan, an increase of about 17.18% year-on-year, becoming the company with the fastest growth rate of premium income. PICC Health achieved a premium income of 26.081 billion yuan, a year-on-year increase of 35.9%. CPIC life insurance and New China Life Insurance Company Ltd(601336) respectively achieved premium income of 111579 billion yuan and 76.474 billion yuan, with year-on-year growth rates of 3.96% and 3.83%.
China Life Insurance Company Limited(601628) in the first four months, the original premium income was 343.5 billion yuan, ranking first in life insurance, but the growth rate fell to – 2.69%. For the performance of China Life Insurance Company Limited(601628) it is estimated that 2022 will still be a key reform year for Guoshou to constantly adjust and explore new development paradigms, and the change of product structure and accurate stratification of customer base will become the core concern. The premium income of Ping An Life Insurance in the first four months was 19.38 billion yuan, a year-on-year decrease of 2.42%. However, Ping An health insurance still maintained rapid growth. The premium income in the first April of this year was 5.154 billion yuan, a year-on-year increase of 22.47%.
China Merchants Securities Co.Ltd(600999) research report analysis pointed out that the frequent outbreaks since March have made residents more pessimistic about expectations and more cautious about insurance purchase. At the same time, the epidemic control has affected the offline business of agents, resulting in continued pressure on new life insurance policies. At present, companies are speeding up channel transformation, but due to the continuous strict control of quality at the increase end, the increase rate is still less than the drop rate, resulting in the continuous shrinkage of manpower. However, it is expected that the gap will gradually narrow, and the improvement of follow-up sales also depends largely on the epidemic control and the recovery of residents’ confidence. At the same time, all companies continue to carry out product innovation and iterative upgrading to meet the diversified insurance needs of customers, and continue to launch products and services such as increased life insurance, new health insurance and home-based elderly care plan around the field of big health and big elderly care, which is expected to boost the sales of new orders.
“Under the influence of the epidemic, the weak demand for insurance consumption is the main reason for the poor performance of premium growth in April” Haitong Securities Company Limited(600837) expects that the decline of new policy premiums of most insurance enterprises may be significantly narrowed under the low base. However, due to the low base effect in the same period of last year, the growth rate of new insurance premiums of all insurance enterprises will continue to improve. In the follow-up, with the stabilization of the scale of agents and the gradual success of epidemic prevention and control, the growth rate of new insurance premiums may increase.
Zhu Junsheng, research director of China Insurance and Pension Research Center, Wudaokou School of finance, Tsinghua University, said in an interview with Huaxia times that there are many reasons for the continuous downturn of the total premium of the life insurance industry. In terms of internal factors, in the past, insurance companies mainly relied on the increase of staff to drive the premium, but the traditional increase of staff is facing great difficulties. On the one hand, there is no staff to increase due to the decline of the working age population, on the other hand, Many agents are working part-time. Their income is not high enough to support the needs of life, and they are also facing a very high turnover rate. From the perspective of external factors, the epidemic has been repeated in many places since this year, and the main sales channel of listed insurance enterprises is still personal insurance channel, which has hindered the offline exhibition industry.
Yang Zeyun, a finance teacher at Beijing Union University, also told our reporter that there are two main reasons for the continued downturn in the growth rate of the life insurance industry. One is the impact of the covid-19 epidemic. Covid-19 epidemic affected the face-to-face communication between insurance salespeople and customers, and greatly affected the sales of complex insurance products. At the same time, the epidemic has reduced the growth rate of residents’ income. The continuous spread and even large-scale outbreak of the epidemic also continued to reduce residents’ expectations of future income, thus affecting residents’ effective demand for insurance. On the other hand, the notice on further regulating the personal insurance business of insurance institutions on the Internet, issued in October last year and implemented on January 1 this year, restricts the sales of financial insurance products sold online. In addition, the change of population structure also has an impact on the growth of life insurance business.
epidemic impact on new car sales and drag down the growth rate of auto insurance premiums
In terms of property insurance companies, the premium growth rate remained at a high rate in the first April, but the premium growth rate fell month on month. The three property insurance companies achieved a total premium income of 343431 billion yuan, a year-on-year increase of 9.82%. Specifically, PICC Property Insurance realized a premium income of 186852 billion yuan, with a year-on-year growth rate of 10.33%. Ping An Property Insurance realized a premium income of 94.928 billion yuan, a year-on-year increase of 8.35%. CPIC property insurance realized a premium income of 61.651 billion yuan, a year-on-year increase of 10.6%.
From the single month data in April, the total monthly premium of property insurance companies in April increased by 2.2% year-on-year. Although it still maintained a positive growth, it has declined by nearly 8 percentage points compared with the growth rate in March. The premium income of PICC Property Insurance increased by 2.7% year-on-year, 7.5 percentage points lower than the single month premium growth in March, of which the single month premium income of automobile insurance decreased by 1.9% year-on-year, 6.5 percentage points lower than that in March; The monthly premium of Ping An Property Insurance increased by 2.2 percentage points year-on-year, which was also significantly lower than the 9.2% increase in a single month in March. The increase of premium income of CPIC property insurance changed from positive to negative in April, with a year-on-year decrease of 0.6 percentage points.
For the reasons for the slowdown in the growth of property insurance premiums in the first four months, Guotai Junan Securities Co.Ltd(601211) non bank financial team believes that the main reason is the slowdown in the growth of auto insurance caused by the decline in new car sales in some parts of China affected by the epidemic Soochow Securities Co.Ltd(601555) pointed out that the epidemic spread, the production of the automobile industry chain in the Yangtze River Delta once stagnated, and the 4S stores were closed. In April 2022, the sales of new cars in China fell sharply by 47.6% year-on-year, reducing the growth rate of new car signing premiums, and the renewal of existing businesses was also delayed by the epidemic.
However, Soochow Securities Co.Ltd(601555) believes that the comprehensive reform has been carried out for more than one year, and the market competition pattern has improved. Under the impact of the major disaster in the second half of 2021, the trend of hardening the vehicle insurance rate is expected to continue. The advantages of head property insurance company in economies of scale, risk pricing, business structure and claim settlement service have been verified and consolidated.
In terms of non auto insurance business, in the first April, the premium income of PICC Property Insurance accidental injury and health insurance was 55.277 billion yuan, an increase of 13.5%. As the third largest insurance type of PICC Property Insurance, agricultural insurance earned a premium of 19.072 billion yuan, an increase of 24.7%. In addition, under the background of a low base in the same period last year, credit guarantee insurance continued to pick up, with a year-on-year increase of 180.4%, and a revenue of 1.775 billion yuan.
From the data of a single month, the growth rate of PICC Property Insurance non vehicle business decreased significantly, from 13.7% in March to 9.6%. Guotai Junan Securities Co.Ltd(601211) non bank is expected to take the initiative to adjust the business structure, significantly reduce the business of enterprise property insurance, employer’s liability insurance and other businesses, as well as the impact of the decline in the growth rate of cargo transportation insurance and aviation insurance under the influence of the epidemic.
However, looking forward to the performance of the whole year in 2022, the industry is mostly optimistic, China Merchants Securities Co.Ltd(600999) believes that at present, companies are actively optimizing the structure of non vehicle business and promoting the continuous improvement of the quality of non vehicle business. It is expected that the profitability of non vehicle business will be improved throughout the year. The current short-term fluctuation does not change the long-term good trend of the property insurance industry, and the prosperity of the industry has improved significantly. The head insurance enterprises are expected to continue to realize the steady improvement of premium and market share by virtue of pricing advantages and scale advantages.
Gf Securities Co.Ltd(000776) also believes that looking forward to the whole year of 2022, with the gradual emergence of the inflection point of the epidemic, the sales of new cars will gradually pick up, which is expected to promote the growth rate of auto insurance. Auto insurance is expected to grow in double digits throughout the year, while non auto insurance will maintain double-digit growth. The growth of premium is expected to improve the leverage of property insurance companies, promote roe and boost valuation.
