The year-on-year convergence occurred in December, and the value performance of the liability side in 2021 may be lower than expected
From January to December, the cumulative annual life insurance premiums of 6 listed insurance companies increased by + 0.0% (from January to November – 0.1%), including The People’S Insurance Company (Group) Of China Limited(601319) + 3.3%, China Taiping + 3.0%, New China Life Insurance Company Ltd(601336) + 2.5%, China Life Insurance Company Limited(601628) + 1.2%, China Pacific Insurance (Group) Co.Ltd(601601) + 0.6%, Ping An Insurance (Group) Company Of China Ltd(601318) – 4.1%. The year-on-year life insurance premium in December was + 0.9% (November + 1.6%), of which: China Pacific Insurance (Group) Co.Ltd(601601) + 41.9%, New China Life Insurance Company Ltd(601336) + 20.4%, China Taiping + 0.9%, China Life Insurance Company Limited(601628) – 0.4%, Ping An Insurance (Group) Company Of China Ltd(601318) – 5.0%, The People’S Insurance Company (Group) Of China Limited(601319) – 9.8%. In December, life insurance premiums converged year-on-year, China Life Insurance Company Limited(601628) and Ping An Insurance (Group) Company Of China Ltd(601318) decreased year-on-year. The year-on-year growth of The People’S Insurance Company (Group) Of China Limited(601319) and China Taiping slowed down due to the slowdown of single payment business and bancassurance business respectively. It is expected that China Pacific Insurance (Group) Co.Ltd(601601) and New China Life Insurance Company Ltd(601336) will increase by 36.6pct and 16.1pct respectively in December year-on-year compared with November driven by the continued sprint of premiums and large-scale products in 2021. The annual premium data of 2021 have been disclosed, and the overall performance is weak. At the same time, considering the slower than expected progress of life insurance transformation, the impact of demand release of health insurance and Pratt & Whitney products, and the decline of agent scale, but there is no significant improvement in quality, we expect the value rate of new business to be lower than previously expected, or equal to the mid-term report of 2021, which will drag down the value performance of new business in 2021.
Ping An Insurance (Group) Company Of China Ltd(601318) new orders were better than expected by – 3.7% year-on-year, and The People’S Insurance Company (Group) Of China Limited(601319) single payment drove new orders or dragged down margin
Ping An Insurance (Group) Company Of China Ltd(601318) the new policy premium of personal business in 2021 was – 3.7% year-on-year, an increase from – 3.1% year-on-year in the first three quarters, but better than the previous expectation. It is expected that the per capita capacity increase of the regulated model products is higher than expected. Therefore, NBV is still under certain pressure year-on-year in 2021, maintaining the previous expectation of – 15.8%. The People’S Insurance Company (Group) Of China Limited(601319) since June, we have promoted the strategy of single payment. In 2021, the new single premium of long-term insurance in the life insurance sector was 56.86 billion yuan, a year-on-year increase of – 0.9%, including single payment + 11.0% and regular payment – 14.6%. The scale of single payment business has increased or dragged down the value rate of new business.
The property insurance sector is repaired driven by automobile insurance and health insurance, and the automobile insurance may grow steadily in 2022
In December, the P & C premium income of the five listed insurance companies was + 18.2% year-on-year, up 10.6pct from + 7.6% in November. Driven by the impact of low base and the high growth of auto insurance repair and Italian health insurance, the P & C premium of head insurance companies in December increased year-on-year. The P & C premium of each insurance company in December was: PICC P & C + 30.4% (November + 13.4%), Ping An P & C + 14.2% (November + 4.4%) CPIC property insurance + 7.7% (November + 4.6%), Zhong’an Online – 17.6% (November – 15.3%), Taiping property insurance – 24.1% (November + 0.5%). According to the prediction of China Automobile Association, the total automobile sales volume may reach + 5% year-on-year and the passenger vehicle sales volume may reach + 7% year-on-year in 2022. Considering the pricing, data and service advantages of head insurance companies, it is expected that the growth rate of automobile insurance will lead the industry in 2022. In addition, the accident and health insurance sector of the property insurance company was significantly repaired in December. PICC Property Insurance and Italian health insurance were + 156.0% year-on-year in December, with a total of + 21.9% for the whole year, and Ping An Property Insurance was + 32.6% year-on-year, a slight increase of 0.9pct compared with the previous three quarters. Therefore, we expect that there is still much room for low average accident and health insurance, and it may become another growth momentum of the property insurance sector in 2022.
The performance of NBV on the liability side may be lower than expected in 2021, and the business pressure will continue at the beginning of 2022
In 2021, the new single premium is under pressure due to the impact of transformation, epidemic, Pratt & Whitney products and the decline in demand. The value rate of new business is difficult to recover due to the change of product structure. In 2021, the performance of NBV at the liability end may be lower than expected. At the beginning of 2022, the business may be dragged down by the fact that the team size is lower than that in the same period, the demand for health insurance has not recovered, and the value rate of main products is low. It is expected that the growth pressure of NBV is still large. At present, the valuation and expectation of the sector are at historical lows and have defensive attributes. In the long run, the transformation of life insurance has a long way to go. In the follow-up, we will pay attention to the downward rate of team size and the improvement of quality. We recommend China Pacific Insurance (Group) Co.Ltd(601601) and Ping An Insurance (Group) Company Of China Ltd(601318) with leading transformation and outstanding comprehensive competitive advantage.
Risk tip: the economic recovery is less than expected; The long-term interest rate is lower than expected; Insurance demand weakened more than expected.
