① The life insurance business of many listed insurance companies showed a marked recovery in April. The premiums of Taibao Life Insurance and China Life Insurance increased by 12.29% and 11.63% year-on-year in April. ② According to institutional analysis, it is mainly affected by the continued recovery of supply-side insurance channels and strong demand for savings products. ③ The “one-to-three” restrictions on banking insurance channels have been lifted, and several research institutes have pointed out that it is expected to accelerate the growth of leading companies' banking insurance NBV.
Financial Services Association, May 15 (Reporter Zou Juntao) Is life insurance finally “recovering”?
Recently, several A-share listed insurance companies, including Ping An of China, China Taibao, and China Life Insurance, disclosed their premium income for the first 4 months of this year. A Financial Services Association reporter compared previous data and found that the life insurance business of many insurance companies showed clear signs of stabilization compared to the beginning of the year.
Among them, the decline in overall premium income for Taibao Life Insurance and Guohua Life continued to narrow in the previous 4 months, while the year-on-year increase in premium income of Ping An China and China Life Insurance continued to accelerate. Judging from the premium income situation in April alone, various life insurance companies showed a year-on-year correction or sharp increase in premium size compared to the previous year.
According to analysis by industry insiders, benefiting from the continued recovery of individual insurance channels, while interest rates on deposits continue to be lowered, it is driving strong demand for savings products and a recovery in health insurance sales. Furthermore, with the recent lifting of “one-to-three” restrictions on banking insurance, several research institutes have pointed out that short-term marginal benefits small and medium-sized insurers, while leading insurers with rich resources in the long term benefit.
A number of listed insurance companies revealed a recovery in life insurance business
A number of A-share listed insurance companies recently revealed that premium income continued to pick up in the first 4 months. However, the life insurance business, which was previously affected by factors such as “integration of reporting and banking,” showed even more obvious signs of recovery in April.
On May 15, Ping An of China disclosed that in the first four months of this year, the company's subsidiary Ping An Life accumulated original insurance premium income of 212.155 billion yuan, an increase of 1.9% over the previous year, and a further increase from 0.9% in the previous 3 months.
According to China Life Insurance's previous disclosure, the company's cumulative original insurance premium income for the first four months of this year was about 371.2 billion yuan, an increase of 3.9% over the previous year, and the increase was further expanded from 3.2% in the previous 3 months.
Other life insurance companies, which are still in a downward trend, have further narrowed their decline. On May 14, China Taibao revealed that in the first 4 months of this year, the subsidiary Taibao Life's cumulative original insurance business revenue was RMB 104.524 billion, a year-on-year decrease of 3.5%. Compared to the 5.4% year-on-year decline in the first 3 months of this year, the decline continued to narrow.
Furthermore, Tianmao Group disclosed that in the first four months of this year, the holding subsidiary Guohua Life accumulated about 17.845 billion yuan in original insurance premium income. This figure is down about 18.34% from last year, but it is also narrower, with a 20.55% year-on-year decline from the first 3 months of this year.
Judging from the monthly data, the picture is more intuitive. In April of this year alone, Ping An Life added 38.855 billion yuan in premium income, 6.69% year on year; Taibao Life added 12.838 billion yuan in premium income, up 12.29% year on year; and China Life added 33.6 billion yuan in premium income, up 11.63% year on year.
It is worth mentioning that China Life Insurance's premium income fell 1.27% year on year in March, and the year-on-year increase was corrected in April; Taibao Life's premium income increased 4.66% year on year in March, which is already showing signs of recovery; in April, the year-on-year increase further expanded.
According to the industry, the recovery in the life insurance business was mainly affected by various factors, such as the performance of individual insurance channels exceeding expectations. The Huaxi Securities non-bank team pointed out that the recovery in the life insurance business is mainly due to the continued recovery of supply-side insurance channels. Although new banking insurance channel orders are under pressure, the drop in pressure has brought about an increase in debt quality; against the backdrop of strong demand for demand-side residents' savings combined with the continued decline in deposit interest rates, the advantages of insurance products are prominent.
Analysts Hu Xiang/Ge Yuxiang from Dongwu Securities's non-bank team pointed out in a recent research report that from the banking insurance demand side, after outlets re-signed contracts, their enthusiasm for consignment sales was somewhat squeezed. However, it is worth noting that the performance of individual insurance channels is relatively stable. Consumer demand for early overdraft payments with a 3.5% pricing interest rate was basically digested in the fourth quarter of 2023. Thanks to companies seeking a balance between a good start in 2024 and the end of the fourth quarter of 2023, the new individual insurance policies and value performance in the first quarter of this year were significantly superior to banking insurance.
The team believes that objectively, due to “speculation” of new orders and a high value base in the 2nd quarter of 2023, it is expected that the year-on-year growth rate of new orders and values for life insurance in the 2nd quarter of 2024 will fluctuate slightly, but it will not change the pattern where the life insurance business continued to recover after the epidemic throughout the year, and pay attention to the implementation of “integrated reporting and execution” of individual insurances.
While life insurance is picking up, the financial insurance business continues to grow. In the first 4 months of this year, China Financial Insurance's cumulative original insurance business revenue was 77.143 billion yuan, up 7.8% year on year; Ping An Financial Insurance's cumulative original premium revenue was 103,529 billion yuan, up 3.1% year on year, and the increase was further expanded from the previous 3 months.
The “one-to-three” restrictions on banking insurance channels have been lifted, and institutions are optimistic about the contribution of banking insurance channels to leading insurance companies
On May 9, the China Financial Supervisory Administration issued the “Notice Concerning Matters Relating to Commercial Banks' Agency Insurance Business” (hereinafter referred to as the “Notice”), abolishing restrictions on “1+3” outlets, clarifying levels of cooperation, and strengthening the integration of reporting and banking commissions.
Huafu Securities pointed out that the release of one-to-three restrictions in this notice will marginally benefit small and medium-sized insurers to sign contracts, and it is expected that the large negative growth trend in the early period will be mitigated. However, due to the impact of the general contract agreement and offline service regulations in the notice, leading insurers are expected to further expand the scale of contracts with more outlets and cooperative advantages. At the same time, leading insurers are benefiting from many channels of cooperation, better training service support, and generally higher value rates brought about by significant improvements in the superposition period structure. It is expected that the scope of contracts will be further expanded under the new regulations, and the long-term contract scale growth rate is expected to improve.
The Kaiyuan Securities non-bank team pointed out that in the short term, the number of “1+3” network cooperation will liberalize or intensify rational competition in the industry, which is expected to provide consumers with richer products and services. In the long run, leading insurers have more complete and rich product and service systems, and more sufficient manpower reserves, and still have certain advantages. They can increase the number of cooperative outlets or help leading insurers increase their market share in banking insurance channels.
At the same time, under the influence of the implementation of integrated banking insurance channel reporting, driven by improvements in the payment structure of superimposed products and a reduction in scheduled interest rates, the value ratio of banking insurance channels has increased or is superior to individual insurance channels, and the trend of increasing value contribution is expected to continue, simultaneously contributing value and scale to the insurance industry.
Fangzheng Securities pointed out that the current liberalization of bank branches is conducive to making better use of the advantages of commercial banks and insurance companies, promoting long-term in-depth cooperation between the two sides, exploring new paths of transformation and development, and broadening the scope of cooperation between commercial banks and insurance companies. In choosing cooperative insurance companies, leading companies with comprehensive strength and stronger brand effects will become banks' preferred partners. Fangzheng Securities said that the liberalization of bank branch cooperation is expected to accelerate the growth of leading companies' banking insurance NBV (new business value).