News from Cailian Press on August 30th (Reporter Xia Shuyuan): On August 30th, China Pacific Insurance held the 2024 interim performance conference, and Chairman Fu Fan of China Pacific Insurance, along with a group of executives, responded one by one to issues of public concern.

Data shows that in the first half of 2024, China Pacific Insurance achieved operating income of 194.634 billion yuan, a year-on-year increase of 10.9%, of which insurance service income was 137.019 billion yuan, a year-on-year increase of 2.2%; net income attributable to shareholders was 25.132 billion yuan, a year-on-year increase of 37.1%; operating profit attributable to shareholders was 19.738 billion yuan, a year-on-year increase of 3.3%.

In response to the downward interest rate cycle, many insurance companies have begun to emphasize products with "guaranteed + floating" income types, especially the sales of dividend insurance. Zhang Yuanhan, the financial director and chief actuary of China Pacific Insurance, said that with the decrease in the predetermined interest rate of personal insurance products and changes in the macro environment, China Pacific Insurance has also shifted towards protection and dividend business. In the long run, the proportion of dividend products is expected to exceed 50%. Looking ahead to the second half of the year, Su Gang, Chief Investment Officer of China Pacific Insurance, believes that the capital market is likely to maintain a stable and fluctuating pattern, and will also foster new structural opportunities.

Life insurance product structure has shifted towards protection and dividend types, and will continue to increase the value contribution of bancassurance channels.

In the first half of 2024, China Pacific Life Insurance achieved original premium income of 153.159 billion yuan, a year-on-year decrease of 1.2%; premium scale was 170.105 billion yuan, a year-on-year increase of 0.3%; net income attributable to shareholders was 20.055 billion yuan, a year-on-year increase of 43%; operating profit attributable to shareholders was 15.2 billion yuan, a year-on-year increase of 1.8%.

During the reporting period, the new business value of China Pacific Life Insurance was 9.037 billion yuan, a year-on-year increase of 22.8%; the new business value rate was 18.7%, an increase of 5.3 percentage points year-on-year.

From a channel perspective, in the first half of 2024, the agent channel achieved a premium scale of 136.211 billion yuan, a year-on-year increase of 2%, of which the premium scale for periodic payment of new policies was 18.194 billion yuan, a year-on-year increase of 3.9%. The bancassurance channel achieved a premium scale of 21.922 billion yuan, a year-on-year decrease of 1%; but the new business value increased by 26.5% year-on-year.

From the product structure perspective, China Pacific Life Insurance achieved a traditional insurance premium scale of 106.437 billion yuan, a 6% year-on-year growth; affected by policy adjustments, product structure optimization and other factors, the scale premium of dividend-type insurance reached 38.1 billion yuan, a 12.2% year-on-year decrease.

Of note, during the period of declining interest rates, several insurance companies have begun to emphasize the sales situation of products with 'guaranteed + floating' income types, especially dividend insurance.

Zhang Yuanhan, the CFO and chief actuary of China Pacific Insurance, stated that with the decline in the preset interest rates of life insurance products and changes in the macro environment, the original product structure no longer meets customer needs. The direction of China Pacific Life Insurance is to shift towards protection and dividend-type business.

In the long term, the proportion of dividend-type products of China Pacific Insurance is expected to exceed 50%. Since the beginning of this year, China Pacific Life Insurance has increased the sales of dividend-type products, with sales volume currently increasing by 5 times year-on-year.

Regarding the company's future plans for the bancassurance channel, Zhao Yonggang introduced that China Pacific Life Insurance will continue to increase the value contribution ratio of the bancassurance channel, focusing on the following three aspects of work.

First, in terms of regional development, strategic focus on central cities, especially provincial capitals and some key cities. Simultaneously, focus on promoting strategic cooperation with banks to advance personalized strategies, promoting symbiotic development of bancassurance; second, dual emphasis on insurance products and value-added services; third, creating a 'four-high' bancassurance team with high quality, high capacity, high performance, and high retention, with product and service as the entry point.

Regarding the recent changes in the management team of China Pacific Life Insurance, Zhao Yonggang stated that the leadership team of the life insurance company has smoothly achieved the turnover of old and new, and the new management team will adhere to strategic consistency and continuity, continuously promoting the 'Changhang' transformation.

Strengthening risk warning and risk reduction construction, China Pacific Property Insurance will accelerate the innovation and transformation of non-auto insurance business.

In the first half of 2024, China Pacific Insurance achieved premium income of 113.203 billion yuan, a year-on-year increase of 7.8%, higher than the industry average.

In terms of different types of insurance, the premium income of vehicle insurance was 52.167 billion yuan, a year-on-year increase of 2.8%, with a growth rate of 41.7% in premium of electric vehicle insurance. The premium income of non-vehicle insurance was 59.636 billion yuan, a year-on-year increase of 12.7%.

In terms of key indicators, in the first half of the year, the comprehensive underwriting expense ratio of China Pacific Insurance was 97.1%, a year-on-year decrease of 0.8 percentage points. Among them, the comprehensive claims ratio was 69.6%, a year-on-year decrease of 0.8 percentage points; the comprehensive expense ratio was 27.5%, unchanged from last year.

According to Zhao Yonggang, in the first half of the year, the optimization of the comprehensive underwriting expense ratio of China Pacific Insurance was mainly due to the company's strengthening of cost control in vehicle insurance, resulting in a decrease in the comprehensive expense ratio of vehicle insurance. It is reported that in the first half of 2024, the comprehensive underwriting expense ratio of vehicle insurance of China Pacific Insurance was 97.1%, a year-on-year decrease of 0.9 percentage points.

In response to natural disasters, China Pacific Insurance will effectively reduce losses through an integrated disaster response service model and risk reduction management system. At the same time, it will consolidate the development of traditional property and casualty insurance business and gradually accelerate the development of enterprise property and casualty insurance, cargo insurance, and home insurance in high-cost business areas.

Adhering to the core strategy of 'dividend value', dynamically optimizing the tactical allocation structure to increase income.

In the first half of 2024, due to a significant increase in fair value changes in gains and losses, China Pacific Insurance achieved a total investment income of 56.037 billion yuan, a year-on-year increase of 46.5%. Benefiting from increased dividends and dividend income, China Pacific Insurance's net investment income was 39.089 billion yuan, a year-on-year increase of 1.7%.

As of the end of June 2024, China Pacific Insurance had managed assets of 3.26 trillion yuan, an increase of 11.7% compared to the end of the previous year. Among them, investment assets were 2.46 trillion yuan, an increase of 9.2% compared to the end of the previous year.

In the first half of 2024, the total investment yield of China Pacific Insurance was 2.7%, a year-on-year increase of 0.7 percentage points; the net investment yield was 1.8%, a year-on-year decrease of 0.2 percentage points; the comprehensive investment yield was 3%, a year-on-year increase of 0.9 percentage points.

Su Gang said that in the first half of this year, the stock market first rose and then fell, but structural opportunities brought good returns. China Pacific Insurance has always adhered to the active management of equity assets, and therefore achieved performance that exceeded the market benchmark in the first half of the year.

It is reported that in the first half of the year, China Pacific Insurance reduced the proportion of debt financial assets by 0.7 percentage points to 73.8% compared to the end of last year; the proportion of equity financial assets increased by 0.4 percentage points to 14.9% compared to the end of last year, of which core equity accounted for 11.2%, an increase of 0.5 percentage points compared to the end of last year.

Regarding the asset allocation strategy for the second half of the year, Su Gang, Chief Investment Officer of China Pacific Insurance, believes that in the second half of this year, the capital market is likely to maintain a stable and volatile pattern, while also incubating new structural opportunities. Su Gang believes that the central market interest rate will maintain an overall downward trend, but will also be accompanied by periodic fluctuations.

Su Gang believes that since the second half of the year, high dividend assets have been under pressure, which is actually a basic rule that stock market prices revolve around value fluctuations. The investment value chain of China Pacific Insurance Group includes strategic allocation, annual allocation, tactical allocation, and delegated management. Its core capabilities are long-term logic - value precedence, steadfastness, and internalization of responsibility. China Pacific Insurance will adhere to strategic allocation that spans the cycle to achieve long-term returns after risk adjustment and increase phase returns through moderately flexible tactical asset allocation.

"The company's overall investment portfolio will depend on long-term value growth, rather than the short-term ups and downs of individual varieties. China Pacific Insurance will continue to dynamically adjust and optimize the investment portfolio to achieve sustained and steady growth in overall investment performance, in line with the requirements of long-term investment returns and risk constraints." Su Gang said.