Citibank's report pointed out that the performance of most life and P&C insurance companies in the first half of the year exceeded expectations. Due to product repricing, reduced bank commissions, increased attention to long-term products, and cost control, the gross margin of life insurance companies returned to expansion track, and the new business value increased by 11% to 1.1 times annually. Contractual service margin (CSM) balance also increased by 1% to 3% annually.

The bank added that although the nationwide natural catastrophe (NAT CAT) risk losses surged, the comprehensive cost ratio (CoR) of the three major P&C insurance companies remained at a steady level in the first half of the year. PICC (01339.HK) was at 96.2%, while Ping An Insurance (02318.HK) was around 97.8%. In addition, due to better stock investment returns, insurance companies with a focus on life insurance saw profits increase by 6% to 37% in the first half of the year.

Looking ahead, the bank expects the continuous expansion of the gross margin of life insurance companies, resilient sales, and more stable profitability. The leading P&C insurance companies should continue to benefit from the "Matthew Effect," while life insurance companies need to achieve differentiation through investment capabilities. The bank is bullish on P&C insurance (02328.HK), PICC, Taiping Insurance (02601.HK), and China Life Insurance (02628.HK), and has generally raised the target price for mainland insurance company stocks (see separate table).