Life insurance business: the annual trend has been set, and the value of new business may increase negatively or expand. The monthly premium and year-on-year growth rate of each company in December are: Ping An (42 billion yuan, – 5%), Guoshou (26.6 billion yuan, 0.2%), CPIC (8.3 billion yuan, 41.9%), Xinhua (8.4 billion yuan, 20.4%), Taiping (8.8 billion yuan, 0.2%), PICC (6.7 billion yuan, – 9.8%). 1) The single month premiums of Xinhua, Taiping and CPIC achieved positive growth, among which Xinhua and Taiping achieved higher growth in the end of 2021. Thanks to the focus of Xinhua and CPIC at the end of the year, they still completed the objectives of the year. They started well in early December, lagging behind Ping An and Guoshou. However, it is expected that in the first quarter of this year, its sales situation is not as optimistic as that of its peers under the high base and environmental changes. 2) The monthly premiums of Guoshou and Ping An maintained a weak trend. The growth rate of new orders of Ping An in the whole year was – 2.8% and that in the fourth quarter was – 15.7%. It is expected that the negative growth of new business value in the whole year will expand. 3) The monthly premium growth of life insurance of the people’s Insurance Company decreased rapidly, and turned positive to negative month on month. The performance is unstable and fluctuates greatly. In December, the new order of PICC Life Insurance showed a significant reversal, with a year-on-year growth rate of – 25.8%, positive to negative, a decrease of 190.9pct compared with the previous month. The impact of Internet regulation on the new order of PICC Health subsided, and the monthly growth rate returned to positive growth of 37%. The performance of life insurance of the insurer fluctuates greatly, which is related to its small business volume, early stage of development and insufficient strategic sustainability.
Property insurance business: Property Insurance continued to recover, and vehicle insurance and non vehicle insurance recovered significantly. The monthly premium and year-on-year growth rate of listed property insurance companies in December were: PICC (43.2 billion yuan, + 30.4%), CPIC (13 billion yuan, + 7.7%), Ping An (26.7 billion yuan, + 14.2%), Zhong’an (1.66 billion yuan, – 17.6%). 1) The premium of traditional property insurance companies continued to increase. The monthly premium of PICC Property and casualty insurance continued to increase by + 16.9pct over the previous month, realizing double-digit growth; The monthly premium of CPIC property insurance increased by + 3.1pct compared with the previous month; The monthly premium of Ping An Property Insurance increased by + 9.8pct 2) From the breakdown data disclosed by PICC, the auto insurance premium increased by 10.3% year-on-year, continuing the positive growth trend after the anniversary of the comprehensive reform of auto insurance. Non auto insurance increased by 100.7% year-on-year, a significant increase of 75.9pct over the previous month. It was mainly driven by the weak performance of Italian health insurance, agricultural insurance and liability insurance, with monthly growth rates of 156%, 66.7% and 69.1% respectively. 3) Zhongan online, an Internet insurance company, has experienced a large degree of negative growth in premiums for four consecutive months due to the impact of new regulatory regulations. In December, the single month premium was – 17.6% year-on-year, flat month on month, with a stabilizing trend.
Investment suggestion: on the whole, the growth rate of personal insurance business of individual companies increased in December, but this is not an inflection point and trend change, and we cannot change the general trend of this year. In the fourth quarter, the market focus is on the good start of 2022, but under the high base, manpower reduction, supervision and changes in the market environment, the good start performance of 2022 is expected to be less optimistic. In terms of property insurance business, from the PICC data in December, the situation of auto insurance and non auto insurance continued to pick up and improved to a large extent, but it remains to be seen whether it is sustainable this year’s economic situation. In addition, the Internet insurance regulation has been further tightened, which has a great negative impact on the industry performance in the short term, but at present, the impact has gradually subsided and tends to be stable. Zhongan online’s premiums have increased negatively to a large extent in recent April. At present, the valuation of PEV (2021e) of each company is: China Life Insurance Company Limited(601628) (0.67-0.7x), China Pacific Insurance (Group) Co.Ltd(601601) (0.52-0.54x), New China Life Insurance Company Ltd(601336) (0.44-0.46x), Ping An Insurance (Group) Company Of China Ltd(601318) (0.64-0.66x). We believe that before the inflection point of manpower and performance occurs, the industry valuation is still difficult to repair for the time being.
The suggested order of attention is: China Life Insurance Company Limited(601628) , China Pacific Insurance (Group) Co.Ltd(601601) , China property insurance, Ping An Insurance (Group) Company Of China Ltd(601318) , New China Life Insurance Company Ltd(601336) .
Risk tip: the recovery of manpower growth is less than expected, the progress of channel reform is slow, and the equity market is turbulent.
