Ping an released its annual report for 18 years, and the company's full-year net profit was 107.4 billion yuan, an increase of 20.6% over the same period last year. Such a large volume and this rate of growth, of course, is very beautiful, but investors in insurance stocks all know that insurance stocks do not look at profits, profit is just an accounting figure.
I have written a series of articles by Ping An Insurance before, one of which said that Ping An Insurance's period of rapid growth has passed.This is not to say that there is no room for growth, because from the depth and density of insurance, China's insurance industry is undoubtedly still in a golden period.However, large space does not mean that the growth rate is fast. After the team of insurance agents tends to be saturated and insurance returns to the protection function, the extensive growth model of the past has passed.
Of course, as investors, we should pay more attention to the growth rate of new business value.After all, this is related to the potential for intrinsic value growth, and there are two modes for the growth of new business value, one is to pursue the rapid growth of scale premium, and the other is to pursue the improvement of new business value rate. After the insurance agents are saturated and return to insurance, the growth rate of scale premium will undoubtedly slow down, so the growth of new business value can only be driven by the improvement of new business value rate.
The improvement of the rate of new business value can be further decomposed into the increase of per capita new business value, because when the growth of premiums slows down and the number of agents is saturated, the increase of per capita new business value means the increase of new business value rate, but the improvement of per capita new business value does not happen overnight. Only when the improvement of the quality and brand power of the agent team enter a positive cycle can we steadily drive the improvement of the value rate of the new business. If you read AIA Group Limited's data, you can find that AIA has implemented the best agent strategy while paying attention to the new business value, and only the cooperation of the two can enter the positive cycle, which is what I am most concerned about in the annual report.
一、A brief description of the main performance indicators
1.1Property insurance part:
(data source: collated according to annual report)
The slowdown in terms of growth may have something to do with the decline in car sales. But the market share rose from 20.5% to 21%. The cost rate decreased by 0.2%, mainly due to the decline in the compensation rate, the expense rate is actually increased, but the compensation rate is fluctuating, and the expense rate is basically rigid, so whether 19 years can maintain the current comprehensive cost rate is a question mark. In addition, profits were negative, falling to 12.3 billion from 13.3 billion in 17 years, mainly due to the impact of income tax. As the property insurance accounts for a small proportion of Ping an's profits, we focus on the life insurance part.
1.2Life insurance part:
Life insurance is the most important part of Ping an in terms of asset scale and profit contribution. It is almost impossible to analyze Ping an as long as we figure out the two parts of life insurance and property insurance. The profit of the life insurance sector was 58.7 billion, up 62.6% from the same period last year, accounting for more than half of Ping an's total profit. Of course, the most important thing in life insurance is not profit, but the growth of the value of new business.
(data source: collated according to annual report)
There are two driving forces driving the growth of the value of new life insurance business, one is the growth of agent scale, the other is the increase of agent production capacity. From the above picture and combined with the data since the listing, we can find that the growth of Ping an agents has reached the lowest level since the listing. I don't know whether it is an all-time low, but I guess it is. In fact, the density of agents in China has also exceeded that of the United States. So the model driven by agent growth is over.
So, what about the increase in the value of new business per capita? The new business value of 2018 per capita only increased from 48243 yuan / year to 48789 yuan / year, an increase of only 1.1 percent, and the per capita monthly income of agents increased by only 0.7 percent, from 6250 yuan to 6294 yuan. In addition, the per capita scale premium growth is negative, of course, the new business value rate increased by 11 points, so the overall new business value rate also increased by 7.3%. But this rate is the lowest in 13 years, and I don't expect the growth of new business value in 19 years to be more optimistic than that in 18 years.
(data source: collated according to annual report)
In addition, due to the increase in the value rate of new business and the substantial adjustment of the capital market in 2018, the proportion of interest spread in life insurance business has declined. If you take into account the poor performance of the capital market in the past 18 years, Ping an's profits in the past 18 years can be said to be very substantial, mainly due to the release of the remaining margin brought about by the rapid growth in the value of new business in previous years.
Summary
Based on the above analysis, if you look at the profit situation alone, Ping an's figures in the next few years will be very beautiful, especially in view of the beautiful performance of the capital market this year. However, from the perspective of growth stamina, the rapid growth of agent scale in the past few years has overdrawn the subsequent growth. if we only rely on the increase in the value rate of new business to drive the growth of new business value, then Ping an's stamina is slightly inadequate. that is to say, this may already be the peak of Ping an. Of course, considering that Ping an is now about 1.3 times the embedded value of the valuation, the current price still has a certain investment value, of course, it is also necessary to prepare for TAL Education Group's new business value that is less than expected. (article / five fans)