Although individual insurance channels have faced high business base pressure since the beginning of the year, the new orders showed resilience against the backdrop of poor competitive financial management performance during the same period.
The Zhitong Finance App learned that Dongwu Securities released a research report saying that recently, real estate barriers have been opened and the bottom of interest rates is clear. Currently, insurance sector valuations outweigh the impact on performance, and long-term interest rates are the core winners and losers. The 1Q24 quarterly report exceeds expectations and 2H24 will greatly catalyze the valuation of the current insurance sector, especially life insurance stocks, if the new “Ten National Rules” of insurance are implemented. Continue to recommend pure life insurance targets that fully benefit from the reversal of asset-side expectations from the bottom. The insurance sector first promoted China Taibao (601601.SH), followed by China Ping An (601318.SH).
Incident: Listed insurers disclosed premium data for April 2024, according to the cumulative original premium growth rate and corresponding revenue rankings as follows: Sunshine Insurance (9% to 54.8 billion yuan), China Life (4% to 371.2 billion yuan), China Peace Insurance (2% to 30.4 billion yuan), China People's Insurance (1% to 30.1 billion yuan), China Taibao (1% to 181.7 billion yuan), and Xinhua Insurance (-12% to 67.2 billion yuan).
Life insurance: Negative contributions from banking insurance channels narrowed, personal premium growth improved in April, and individual insurances entered a high base range
In April 2024, the original premium growth rate for life insurance for the month was as follows: Sunshine Life (14%), Taibao Life Insurance (12%), China Life Insurance (12%), Life Insurance and Health (10%), Ping An Life Insurance and Health Insurance (6%), and Xinhua Insurance (-12%). The premiums for the first year of Human Insurance Life Insurance's monthly payment in April decreased by 16.6% year on year, but the transaction business increased sharply by 41.3% year over year. The Financial Services Regulatory Authority recently announced the cancellation of one-on-three restrictions on banking insurance channels, which is beneficial for small and medium-sized life insurance companies to sign contracts with banks. The decline in new banking insurance channel orders is expected to narrow, but competition is also facing a fierce test.
Dongwu Securities pointed out that although individual insurance channels have faced pressure from a high business base since the beginning of the year, the new order showed resilience against the backdrop of poor competitive financial management performance during the same period. In April, with the exception of Xinhua, life insurance premiums of listed insurers all achieved year-on-year growth. The Xinhua announcement focused on value growth and structural optimization, and strived to promote high-quality development, especially in terms of individual insurance channel core business, excellent manpower, and per capita production capacity. Xinhua has launched products such as Rongyao Xinxiang Whole Life Insurance and Enjoy Short Stay Experience Health Insurance, etc., which can be used with universal insurance products to increase profits and achieve flexible planning.
Objectively speaking, due to the “suspension” of new orders and a high value base in 2Q23, it is expected that the year-on-year growth rate of new 2Q24 orders and values will fluctuate slightly, but this 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 insurance. Dongwu Securities expects 1H24 listed insurers to rank the year-on-year growth rate of NBV as follows: Taibao (20%), Xinhua (15%), China Life Insurance (12%), and Ping An (10%).
Financial insurance: The old three companies continue to lead the premium growth rate of Zhongtai Insurance
In April 2024, the year-on-year growth rate of the original premiums of the old three financial insurance companies for the month was as follows: Taibao Financial Insurance (5%), Ping An Financial Insurance (4%), and People's Insurance (-1%). The cumulative year-on-year growth rate of 4M24 People's Insurance car insurance and non-car premiums was 2.3% and 3.3%, respectively, and the share of the non-car business decreased 2.7 percentage points to 56.7% year on year.
Specifically, the monthly year-on-year growth rate of car insurance premiums increased in April (2.9%, -1.3%, 3.1%, and 3.5% in a single month from the beginning of 2024 to April, respectively), and new car sales rebounded in April, with a cumulative year-on-year growth rate of 10.2%. Agricultural Insurance (-12.2%), credit guarantee insurance (-25.3%), and liability insurance (-1.2%) in April dragged down negative insurance growth in the same month. Passenger traffic in 29 cities rose 6.3% year on month in April, indicating that the recovery in travel rates after the epidemic and the rise in the risk rate slowed down year over year. According to data from the Ministry of Emergency Management, in April, natural disasters in China were mainly floods, wind and hail, droughts, and geological disasters. Low temperatures, rain and snow freezing, earthquakes, sandstorms, forest fires, and biological disasters also occurred to varying degrees. Direct economic losses amounted to 14.81 billion yuan, a significant increase over the previous year.
Risk warning: 1) Long-term interest rates continue to decline; 2) Economic recovery falls short of expectations.