According to a report released by gtja on the Zhitong Finance and Economics APP, life insurance premiums continued to grow from January to September, expected to benefit from strong customer demand and the window period for switching pricing interest rates to drive new policy sales; property insurance premiums showed differentiation, with a stable combined ratio expected; investment income significantly boosted profits beyond expectations. Strong sales of savings insurance on the liability side combined with improvements in new business value rates are expected to drive rapid growth in life insurance NBV in the first three quarters of 2024; the capital markets unexpectedly warmed up at the end of September on the investment side, with a significant boost in investment income expected, leading to better-than-expected profit growth in the first three quarters for listed insurance companies.

GTJA's main opinions include:

Life insurance premiums continued to grow in September, expected to benefit from the window period for switching pricing interest rates to drive concentrated policy sales.

From January to September, cumulative life insurance premiums for listed insurance companies continued to grow well, with the following order: Sun Life (17.4%) > ping an insurance (9.8%) > PICC Life Insurance (5.9%) > china life insurance (5.1%) > Taikang Life Insurance (2.4%) > new china life insurance (1.9%); in September, monthly life insurance premium performance varied, with the following order: ping an insurance (20.1%) > Taikang Life Insurance (12.6%) > PICC Life Insurance (8.8%) > new china life insurance (2.1%) > china life insurance (-4.0%). It is expected that some insurers will seize the window period for switching pricing interest rates to focus on driving dividend-type insurance product sales to boost new policy sales momentum. Improvements in business quality will lead to growth in renewal premiums, combined with the lower business base in the same period of 2023 resulting in growth. The negative growth in premiums for china life insurance in a single month is expected to be due to the good performance in achieving the previous performance targets, the strategic focus shifting to preparing for the 25th year business. In terms of new policies, individual new policies for ping an insurance from January to September increased by 12.8% year-on-year; long-term new policies with premium payment for PICC Life Insurance from January to September increased by 3.2% year-on-year, with the month of September having an increase of 123.7% year-on-year. This is expected to be due to the concentrated promotion of dividend insurance and other products sales.

Split growth rates in property insurance premiums, with overall stable combined ratio expected.

From January to September, cumulative growth rates in property insurance premiums for listed insurance companies have shown differentiation, with the following order: za online (10.9%) > Sunshine Property Insurance (8.9%) > Taikang Property Insurance (7.7%) > Ping An Property Insurance (5.9%) > PICC Property Insurance (4.6%); Taikang Property Insurance and Sunshine Property Insurance are expected to benefit from actively developing non-auto innovative businesses to drive faster premium growth, while PICC Property Insurance and Ping An Property Insurance are slowing down certain types of underwriting due to optimizing their business structure. Monthly growth rates in property insurance premiums for September are: za online (44.0%) > Ping An Property Insurance (10.9%) > Taikang Property Insurance (7.2%) > PICC Property Insurance (6.7%) > Sunshine Property Insurance (3.5%), with za online expected to see faster premium growth due to the revival of health insurance demand and a low base in the same period, while traditional insurance companies are experiencing an overall recovery in monthly property insurance premium growth. From January to September, auto insurance growth rates are: Ping An Property Insurance (3.8%) > PICC Property Insurance (3.2%), with continued weak growth expected in premiums under the background of deepening comprehensive reforms in auto insurance by the regulatory authorities. PICC Property Insurance's auto insurance premiums in September increased by 5.3% year-on-year, mainly benefiting from consumer subsidies driving the recovery in new car sales (up by 4.5% year-on-year) leading to growth in insured vehicles; non-auto insurance growth rates from January to September are: Ping An Property Insurance (10.6%) > PICC Property Insurance (5.9%), with PICC Property Insurance's non-auto insurance premiums in September increasing by 8.9% year-on-year, driven mainly by individual health insurance, enterprise property insurance, and liability insurance, with growth rates of 18.3%, 11.9%, and 7.7% respectively, while agricultural insurance still suffers from negative growth due to factors related to policy business underwriting pace, down by -7.2% year-on-year. Based on improvements in the expense ratio offsetting the impact of large catastrophe claims, the overall Combined Operating Ratio (COR) is expected to remain stable in the first three quarters of 2024.

Expected NBV growth continues, with investment side outperforming expectations to significantly boost profits.

Strong sales of savings insurance on the liability side combined with improved new business value rate, expected fast growth of life insurance NBV in the first three quarters of 2024; the capital markets unexpectedly rebounded by the end of September on the investment side, expected significant profit boost from investment income, driving the profits of listed insurance companies in the first three quarters beyond expectations.

Risk warning:

Capital market fluctuations; decline in long-term interest rates; limited sustainability in customer demand.