Zheng Jiayi, an all-media reporter from Southern Finance and Economics, reporting from Beijing.
Near the end of AprilBigbuckhunterarcadeforsaleInsurance companies intensively disclose their first-quarter results and solvency reports.
According to the incomplete statistics of the 21st Century Economic report, as of April 29, a total of 22 life insurance companies and 30 property insurance companies issued solvency reports for the first quarter of 2024. At the same time, among the A-share and H-share listed companies, China Life, China Ping an, China Pacific Insurance, AIA and China Reinsurance have also disclosed their first-quarter results.
From the overall data, the industry continued to pick up in the first quarter. The State Administration of Financial Supervision and Administration disclosed that by the end of the first quarter, the original insurance premium income of the insurance industry totaled 2.1544 trillion yuan, an increase of 5% compared with the same period last year.Bigbuckhunterarcadeforsale.1%. Of this total, the property insurance premium income was 371 billion yuan, and the life insurance premium income reached 1.7834 trillion yuan.
However, as far as specific corporate performance is concerned, some companies are still in a difficult position to make profits. According to the reporter's statistics, 14 of the 22 life insurance companies made profits in the first quarter, while 8 companies fell into a quagmire of losses at the beginning of the year. at the same time, the "Matthew effect" of the industry was further prominent. large-scale institutional insurance business income and net profit remain in the lead.BigbuckhunterarcadeforsaleOf the 30 property insurance companies, 10 also reported losses during the reporting period.
The trend of slow recovery is also reflected in the premium announcements of listed insurance companies. According to the reporter's statistics, among A-share and H-share listed insurance companies, seven companies, namely, China Life Insurance, China Ping an, China people's Insurance, China Pacific Insurance, Xinhua Insurance, Guohua Life Insurance and Zhong an online, have collected a total of 10887 premiums.Bigbuckhunterarcadeforsale1.5 billion yuan, a slight increase of 0.67% over the same period last year. Among them, life insurance business fell slightly by 0.94% compared with the same period last year, and property insurance business grew by 4.7%.
Guojun non-Bank financial team pointed out that in the first quarter of 2024, it is expected that listed insurance companies' individual insurance and bancassurance channel supply and demand resonance will promote the listed insurance company NBV to achieve rapid growth. First, an insurance team declined slightly, while the strong savings demand of customers continued to increase per capita production capacity to promote new orders; second, in terms of banking and insurance, the significant improvement in the expense rate under the "integration of reporting and banking" led to a rise in the value rate.
The debt side warms up
Rising performance is the main theme of the insurance industry in 2024. As mentioned above, at the end of the first quarter, the original insurance premium income of the insurance industry totaled 2.1544 trillion yuan, a year-on-year growth rate of 5.1% according to comparable caliber, although lower than the 9.24% of the same period last year, but still showing a trend of recovery.
From January to July in 2023, the life insurance industry ushered in a peak of performance rarely seen for many years. In the context of the downward interest rate, in order to avoid the risk of spread loss caused by high pricing interest rates, at the end of July 2023, the insurance industry completely suspended the sale of traditional life insurance with a scheduled interest rate higher than 3.0%, dividend insurance with a scheduled interest rate higher than 2.5%, and universal insurance with a minimum guaranteed interest rate higher than 2.0%.
After the peak, life insurance premiums fell, and since then, life insurance liabilities have always been under pressure based on the early release of demand before the reduction of scheduled interest rates and the short-term impact caused by the landing of the "integration of newspaper and bank". In addition, at the end of 2023, the supervision issued new rules to strictly control the "good start", prohibiting the collection of premiums substantially in advance, and life insurance companies continued to face income pressure.
At present, the above "decline" has ushered in a reversal. Although the regulation does not disclose the premium growth rate of life insurance companies under the comparable caliber, but in terms of the performance of listed insurance companies, the inflection point has emerged. Among them, the largest China Life, Ping an life insurance, health and pension business have achieved positive growth, year-on-year growth rates of 3.18% and 1.17% respectively.
Analysts pointed out that, first, taking into account the continued decline in LPR and the downward trend of bank deposit rates, the scheduled interest rate for life insurance products may be cut again; second, the size of an insurance team is expected to stabilize and the value contribution of bancassurance will increase. With the superposition of the two, the debt performance of life insurance companies is expected to continue to heat up. At the same time, the above analysts further pointed out that in the process of high-quality transformation, premium is no longer the only indicator to measure performance, more attention should be paid to the scale of value.
Hou Jin, chief actuary of China Life Insurance, pointed out at the quarterly results conference that the company's new business value rate has improved in the first quarter. "this is mainly due to three reasons-structural optimization, cost reduction and efficiency efficiency, and active interest rate reduction costs."
Specifically, Hou Jin said: first, the business organization is optimized, the proportion of insurance premiums paid in the first year and above is 33.67%; the second is to actively implement the "integration of reporting and banking" of the bancassurance channel and take the initiative to reduce costs and increase efficiency in related fields; the third is to actively optimize pricing interest rates and product structure.
In terms of property insurance, the growth rate of the industry is relatively stable, at the same time, car insurance is still the "main force". The State Administration of Financial Supervision disclosed that by the end of the first quarter, the property insurance industry had collected 3710 yuan in premiums, of which car insurance premiums reached 214.2 billion yuan, accounting for 57.74 percent of the total premium income.
At the same time, the reporter noted that the level of car insurance business in the property insurance industry is highly related to the size of the company. After the "comprehensive reform" of car insurance, some small and medium-sized insurance companies withdrew from the car insurance market, and their market share was further concentrated to the head company.
Statistics show that among the 30 property insurance companies, a total of 21 companies are engaged in car insurance business, among which the top 18 property insurance companies with the largest signing premium scale are all involved in car insurance business. At present, the insurance premiums of the above 21 companies are differentiated, ranging from 90 to 9000 yuan, 9 companies' premiums are more than 2000 yuan, and 12 companies are less than 2000 yuan.
Increasing profits is still an industry topic.
As mentioned earlier, although the industry as a whole is showing a trend of recovery, some companies are still in a difficult position to make profits.
According to the reporter's statistics, 14 of the 22 life insurance companies made profits in the first quarter, while 8 companies fell into a quagmire of losses at the beginning of the year, while 10 of the 30 property insurance companies showed losses during the reporting period. In terms of solvency performance, the core solvency adequacy ratio of 6 life insurance companies and 17 property insurance companies showed a downward trend.
It is worth mentioning that of the 52 companies mentioned above, 51 have comprehensive risk ratings above Class B. In the industry, there are still a number of companies with comprehensive risk ratings of Class C and D, and companies that are in the process of risk management. Such companies may face more serious profit difficulties than their well-run and solvent peers.
As a matter of fact, how to increase profits is an issue that the entire insurance industry needs to face directly. Even head insurance companies that maintain profits must face the current dilemma of "increasing income without increasing profits".
Take China Life as an example. The quarterly report revealed that on the debt side, China Life achieved a total premium income of 337.638 billion yuan, an increase of 3.2% over the same period last year, the highest growth rate among the five listed A-share insurance companies, but at the same time, its return net profit was 20.644 billion yuan, down 9.3% from the same period last year.
From the data of the first quarterly report, the reason for "increasing income but not increasing profit" during the reporting period of China Life is similar to that in 2023-one is the pressure on the investment side, and the other is the increase in insurance payments.
First, under the background of the continuous decline in the interest rate center and the low volatility of the A-share market, although the total investment income of China Life increased by 7.2% in the first quarter, its net investment income was 42.681 billion yuan, down 0.1% from the same caliber year-on-year. Corresponding to the simple annualized net investment rate of 2.82%, (not of the same caliber) fell 0.8 percentage points year-on-year.
Luo Huizhou, an analyst at West China Securities, pointed out that China Life's investment yield fell slightly compared with the same period last year, mainly due to the high base of the equity market in the same period in 2023 and the continued decline in long-term bond interest rates. With the continuous landing of the regulatory package of policies to promote the high-quality development of the capital market, the equity market is expected to usher in a trend recovery, but we still need to pay attention to the continuing downward risks of the equity market and interest rates.
The industry is under similar pressure. The reporter's statistics found that in the first quarter, the investment return of 22 life insurance companies was generally less than 1.0%. Among them, 1 company's investment return is negative, 6 companies are between 0-0.5%, 10 companies are between 0.5-1.0%, and 5 companies are higher than 1.0%. The comprehensive investment return of 22 companies is generally less than 3%. Among them, 1 company's comprehensive investment return is negative, 4 companies are between 0 and 1.0%, 7 companies are between 1.0 and 2.0%, 5 companies are between 2.0 and 3.0%, and 5 companies are higher than 3.0%.
In this regard, Liu Hui, vice president of China Life Insurance, said that the return of the open market equity portfolio is volatile, and China Life already has a certain scale in high dividend stocks, and will continue to pay attention to the strategy of high dividend stocks in the future; at the same time, it will build a decentralized and balanced portfolio of high dividend stocks, adhere to decentralized allocation, and strengthen active management. "not only dividend income, but also certain value-added income, so as to play a positive role in reducing income volatility, maintaining and increasing the value of assets, and improving solvency."
Second, the compensation expenditure increased. China Life's insurance service expenditure reached 41.021 billion yuan in the first quarter, an increase of 31.65% compared with 31.16 billion yuan in the same period in 2023. Hou Jin revealed that the main reason for the decline in the company's insurance service performance was that mycoplasma flu and COVID-19 had a greater impact on respiratory tract infections in the first quarter, especially for the insured group of children. For the above reasons, the company's corresponding compensation has increased.
This trend is also reflected in the industry. According to the State Financial Regulatory Administration, the insurance industry's original insurance indemnity expenditure increased by 47.8% in the first quarter, compared with 9.25% in the same period last year. Among them, the life insurance indemnity expenditure increased by 79.4%, and the property insurance company indemnity expenditure increased by 11.1%.
