Edited by CITIC: "several reasons to be optimistic about Ping An Insurance"
1. Insurance: there is still a lot of room for demand.
Current situation
In 2017, the premium of health insurance is 438.9 billion yuan, and that of serious illness insurance is 249.4 billion yuan. The premium scale is small and the proportion of people covered is limited. Secondly, from a global point of view, the proportion of personal expenditure on medical expenses in China still has a lot of room to be replaced. In 2017, the compensation of health insurance was only 129.5 billion yuan, accounting for only 8.7% of personal health expenses.
Space
China has at least 200 million middle-class families (600 million people), with a large base. The probability of insurance purchase is positively correlated with income: household income is 500000, and the policy purchase rate is 50%.
CITIC believes that the future growth space of insurance comes from 1, the improvement of permeability. 2. The unit price of guests will be increased. 3. In addition to serious illness insurance, there are other protection needs, such as death, accident, medical treatment, old-age insurance and so on.
2. Insurance companies: ping an has the strongest competitive strength.
From the ability point of view, whether there is a channel to develop indemnificatory business
Long-term life insurance demand has the following unique characteristics: non-urgent demand, perceptual consumption and optional consumption; demand, but against human nature, need external force to promote; low frequency, may only buy once in a lifetime.The most important pain point is not the product price comparison, but the lack of purchase awareness and the need for education..
Therefore, CITIC believes that for insurance companies, channels are important and barriers, and excellent sales teams are still the core competitiveness.The income of Ping an agent is more than 1.5 times that of Sheping's salary, and with the advantage of income, insurance manpower is expected to continue to grow.
From the perspective of mechanism, is it possible to develop indemnificatory business?
From the result point of view, the proportion of long-term guaranteed business
The medium-and long-term guarantee accounts for 70% of the new business value of Ping an life insurance, and 72% of the remaining marginal amortization.
CITIC believes that the higher the proportion of long-term protection, the higher the ROA, the higher the financial leverage, and the higher the corresponding ROE; the sensitivity to fluctuations on the investment side is greatly reduced, and the risks brought by the downward long-term interest rates are also reduced. The break-even point of the Ping an Fu insurance policy is only 1%; capital and dividend ability reflect differences: core capital may grow faster than the minimum capital growth rate, improve solvency adequacy ratio, and increase dividend payout ability.
3. Investment strategy: short-term beta + long-term Alfa, the first choice is Ping an.
CITIC saidWith an average annual EV growth of more than 15 per cent, the reasonable valuation is 1.5 times EV based on the three-year shareholding cycle. Due to the possibility of Davis double-clicking, it is safe to hold and share expected annual growth of more than 15%. Ranking: ping an, Taiping, Taibao, Xinhua, Life Insurance.
In addition, the bottom of the valuation can also be seen from many angles, such as license value, capital value, capital pool value, EV liquidation value, sales channel value and so on.
CITIC believes that:
Strategically, short-term Ping An Insurance is a beta variety with Alfa attributes.
Holding Ping An Insurance for a long time spanned periodic fluctuations and got Alfa's return.
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