Reporter | he Xiulan

The policy of downward interest rates and "integration of newspapers and banks" has been strictly implemented.SicboidnUnder the dual background ofSicboidnThe performance of insurance companies in the banking sector continued to differentiate.

Recently, the solvency reports of 10 banks in the first quarter of 2024 have been fully disclosed, and a reporter from time Weekly found that although the overall premium scale is growing against the trend, the phenomenon of increased premium income but no increase in profits is widespread, and the differentiation within the industry is still serious.

From the perspective of the scale of insurance premiums, banking insurance companies as a whole showed a strong momentum of growth. In the first quarter of this year, 10 banks and insurance companies collected a total of 1875 premiumsSicboidn.53 billion yuan, an increase of 23% over the same period last yearSicboidn.72%, with a significant growth rate. Among them, China Post Life ranked first with a premium income of 73.658 billion yuan, which not only far exceeded other peers, but also widened a large gap with ICBC Axa Life, which had the second largest premium income, with a difference of more than 54 billion yuan between the two.

However, with the increase in the scale of insurance premiums, the profit situation of banking insurance companies is not optimistic. Although China Post Life made a substantial turnaround in the first quarter with a net profit of 2.754 billion yuan, it became the most profitable bank and insurance company during the reporting period. However, excluding China Post Life Insurance, the other nine banking insurance companies have a total net profit loss of nearly 2.9 billion yuan, resulting in a serious profit differentiation in the industry.

China Post Life told time Weekly that the improvement in performance in the first quarter was the result of the deep promotion of reform and innovation and value transformation in the past two years. In addition, thanks to taking the lead in the implementation of new accounting standards, forward-looking optimization of asset-negative matching and asset structure, a number of indicators significantly improved in the first quarter.

In addition to China Post Life Insurance, Jianxin Life has become the highest loss-making banking insurance company, with a loss of more than 1.2 billion yuan. Citic Prudential Life, Everbright Life and BoCom Life have also suffered losses to varying degrees. Although the other five institutions have made profits, the scale of profits is relatively small and the overall profitability is poor.

China Post Life Insurance went from "loss king" to top student, with a net profit of more than 2.7 billion in the first quarter.

In the first quarter of this year, China Post Life realized the transformation from a "loss king" to a top student, with both premium scale and net profit increasing, making it the most profitable bank insurance company in the first quarter.

Data show that in the first quarter of 2024, China Post Life achieved insurance business income of 76.358 billion yuan, up 26.25 percent from the same period last year, and net profit of 2.754 billion yuan, an increase of 5.258 billion yuan over the same period last year. This is also China Post Life's highest profit in the first quarter in recent years.

"the improvement in performance in the first quarter is the result of the deep promotion of reform and innovation and the pursuit of value transformation in the past two years, including the comprehensive landing of the layout of multiple channels such as' one main body and more auxiliary forces, multiple points of effort 'and so on." China Post Life told time Weekly that the company is the first unlisted insurance company in the industry to implement the new accounting standards step by step, prospectively optimizing asset-negative matching and asset structure, making profit indicators and solvency significantly better in the first quarter of this year, and sustainable operating ability has been further enhanced.

It is worth noting that in recent years, the profit level of China Post Life has fluctuated. Although it made a profit of nearly 1.7 billion yuan in 2019, it continued to decline since then, even losing more than 12 billion yuan in 2023. In view of the large losses in 2023, China Post Life explained that it was mainly due to the significant increase in reserves caused by fluctuations in the 750 curve and the failure of investment returns to meet expectations.

According to regulatory regulations, the traditional insurance of life insurance companies is discounted according to the 750-day moving average treasury bond yield. As the 750 curve continues to decline, life insurance companies use a lower discount rate when calculating reserves, which requires additional reserves, which will have a negative impact on the company's current profits.

Although the net profit of China Post Life Insurance has fluctuated in recent years, the value of its new business continues to rise, gradually tearing off the label of low value rate in the bancassurance channel. Data show that from 2020 to 2022, China Post Life realized new business worth 1.866 billion yuan, 5.379 billion yuan and 7.051 billion yuan respectively. In 2023, the value of its new business rose to 8.27 billion yuan, an increase of 17% over the same period last year.

A brokerage non-bank financial analyst told time Weekly that at present, in order to more accurately assess the operating status and potential of life insurance companies, the industry is more and more inclined to pay attention to the new business value and the corresponding new business value rate. The new business value mainly reflects the profit expectation of the new business acquired by life insurance companies in the future, while the new business value rate further measures the profitability and efficiency of these new businesses.

It is worth mentioning that the solvency adequacy ratio of China Post Life Insurance is also improving. At the end of June 2023, China Post Life's core solvency adequacy ratio and comprehensive solvency adequacy ratio were 70.7% and 132.3% respectively, and have continued to improve since then. By the end of the first quarter of this year, the two indicators had risen to 100.1% and 180.7% respectively, up 14.7 percentage points and 20.3 percentage points respectively from the previous month.

The increase in solvency adequacy ratio of China Post Life Insurance is mainly due to factors such as the increase in future surplus of insurance policies, the optimization of asset structure and the impact of regulatory rules, according to the announcement of China Integrity International Credit rating.

The scale of insurance premiums of banks is rising against the trend, but the net profit is generally poor.

Backed by bank shareholders, banks are often more dependent on bancassurance channels when selling insurance products. From the perspective of premium income, after the bancassurance channel strictly implements the policy of "integration of newspaper and bank", although the overall premium scale of the insurance enterprises of banks is growing against the trend, the internal differentiation is obvious.

With the exception of China Post Life Insurance, the premium income of the other nine banking insurance companies did not break through the 20 billion yuan mark in the first quarter of this year, and there is a big gap between ICBC Axa Life Insurance, which ranks second in premium scale, and China Post Life Insurance. In addition, the premium scale of Sino-Dutch Life surpassed Everbright Life for the first time in the first quarter.

Sorted according to the scale of premiums, ICBC Axa Life, Agricultural Bank of China Life, Jianxin Life and Cigna Life respectively realized insurance business income of 19.622 billion yuan, 19.377 billion yuan, 18.617 billion yuan and 18.288 billion yuan in the first quarter. While Bank of China Samsung Life, Citic Prudential Life, BoCom Life, Sino-Dutch Life and Everbright Life achieved premium income of 9.588 billion yuan, 9.518 billion yuan, 8.607 billion yuan, 5.606 billion yuan and 4.672 billion yuan respectively.

It is worth noting that seven banks and insurance companies achieved double-digit growth in premium income in the first quarter of this year. Among them, China Merchants Cigna Life Insurance income growth rate of 53.35% over the same period last year, ranking first in the growth rate. In addition, the growth rates of Agricultural Bank of China Life and Sino-Dutch Life have reached 41.78% and 49.21%, respectively.

Industry insiders analyzed to Times Weekly reporters that banking insurance companies have unique advantages in sales of insurance products due to their extensive banking channel resources. The first quarter, as the beginning of the whole year, is often a critical period for insurance companies to layout and expand their business. Therefore, bank-based insurance companies may increase cooperation with banks and promote rapid growth in premium income.

However, not all bank-based insurance companies showed strong growth momentum in the first quarter. For example, CCB Life, which is backed by China Construction Bank, has a relatively slow growth rate, with a year-on-year growth rate of only 1.28%. In addition, the performance of CITIC Prudential Life Insurance and Everbright Sun Life Insurance even fell into negative growth, with insurance business income falling by 1.9% and 15.96% year-on-year respectively.

Although overall premium income has achieved rapid growth, the net profit of bank-based insurance companies has generally shown a downward trend. A number of insurance companies said that due to the downward trend in the government bond yield curve, the increase in insurance contract liability reserves is one of the main reasons for the pressure on net profit.

After excluding China Post Life, which has higher profits, the combined net profit of the nine bank-based insurance companies turned from profit to loss, with a total loss of 2.858 billion yuan in the first quarter. Among them, although there are still 5 insurance companies that have achieved profits, their net profits are generally not high. Among them, BOC Samsung Life had the highest net profit of 159 million yuan. However, the four insurance companies, CCB Life Insurance, CITIC Prudential Life Insurance, Everbright Life Insurance, and Bank of Communications Life Insurance, turned from profit to loss, with net profit losses of 1.253 billion yuan, 808 million yuan, 624 million yuan, and 466 million yuan respectively, with a total loss of more than 3.1 billion yuan.

Relevant persons from CITIC Prudential Life told Times Weekly that in the first quarter of 2024, due to the downward impact of the benchmark yield curve for measuring insurance contract reserves, the combined impact of factors such as the increase in insurance contract liability reserves, and fluctuations in the equity market, the company's net profit fell.

"The downward trend in the 750-day moving average government bond yield curve led to an increase in reserves, and the downward trend in the return of fixed-income assets in a low interest rate environment were the main reasons for the loss in net profit in the first quarter. The company will reduce losses and reduce losses by increasing structural adjustment efforts, optimizing asset allocation at the investment side, and continuing to strengthen cost control." A relevant person from Everbright Yongming Life Insurance told a reporter from Times Weekly.