On October 31, Caixin learned (Reporter: Xia Shuyuan) On October 31, the New China Life Insurance management team introduced at the 2024 third quarter performance briefing that in the first three quarters of 2024, New China Life Insurance achieved operating income of 106.956 billion yuan, a year-on-year growth of 72.9%, with a net income attributable to shareholders of 20.68 billion yuan, a significant increase of 116.7% year-on-year.

From the liability perspective, in the first 9 months of 2024, New China Life Insurance achieved an original premium income of 145.644 billion yuan, a slight increase of 1.9% year-on-year. On the asset side, New China Life Insurance achieved an annualized total investment return of 6.8% and an annualized comprehensive investment return of 8.1%. As of the end of the third quarter, New China Life Insurance's investment assets reached 1.61 trillion yuan.

Regarding the product layout for 2025, the New China Life Insurance management team expressed at the performance briefing that considering the relatively low base of the company's dividend insurance, we hope to steadily promote sales of dividend insurance during the product transformation process. For the current development of bancassurance business, the New China Life Insurance management team maintains a cautious and optimistic attitude. With expectations for the growth of new business value rates in the next step, the management believes that achieving high double-digit results in the first three quarters poses certain difficulties.

Regarding the significant increase in net profit of the company, New China Life Insurance stated in its previous performance forecast announcement that in the first three quarters, the company moderately increased its investment in equity assets, enhancing the allocation ratio of equity assets. The recent rebound in the capital markets led to a substantial year-on-year increase in investment returns in the first three quarters of 2024, resulting in a significant year-on-year increase in net profit for the first three quarters of 2024. However, industry experts believe that equity investment returns fluctuate significantly between different years, and it is not appropriate to simply infer long-term profit performance based on equity investment returns since the third quarter of this year. "Regardless of the profit growth this year, a large part of it is difficult to sustain in the long term," stated China International Capital Corporation in its research reports.

New China Life Insurance's slight 1.9% increase in premiums in the first three quarters indicates weakness, and it will steadily advance the transition to dividend insurance products in 2025.

In the first three quarters of 2024, New China Life Insurance achieved an original premium income of 145.644 billion yuan, a slight increase of 1.9% year-on-year.

Specifically, its first-year premium income from long-term insurance was 34.147 billion yuan, a year-on-year decline of 12.7%. Among them, the period insurance premium income was 24.747 billion yuan, a year-on-year increase of 12.3%, and the premium income for periods of 10 years or more was 3.078 billion yuan, a year-on-year increase of 21.3%.

Renewal premium income was 108.226 billion yuan, an increase of 7.8% year-on-year; short-term insurance premiums were 3.271 billion yuan, a decrease of 2.6% year-on-year. In the first three quarters, the surrender rate of New China Life Insurance was 1.3%, a decrease of 0.2 percentage points compared with the same period last year. New business value increased by 79.2% year-on-year.

In terms of channels, in the first three quarters of 2024, the individual channel of New China Life Insurance achieved premium income of 97.791 billion yuan, an increase of 1.3% year-on-year. Among them, the first-year premium income of long-term insurance was 11.977 billion yuan, an increase of 18.8% year-on-year.

In terms of bank insurance channels, as of the end of the third quarter, the banking insurance channel of New China Life Insurance achieved premium income of 45.309 billion yuan, an increase of 2.9% year-on-year, of which the first-year premium income of long-term insurance was 12.662 billion yuan, an increase of 6.3% year-on-year.

As of the end of the third quarter, the group channel of New China Life Insurance achieved premium income of 2.544 billion yuan, an increase of 8.7% year-on-year. Among them, short-term insurance premiums were 2.283 billion yuan, an increase of 4.2% year-on-year.

Overall, in the first three quarters, the premium growth rate of New China Life Insurance was weak, far below the industry growth rate of 7.8% for life insurance companies. Looking back at January to May 2024, New China Life Insurance's original premium income continued to decline, with year-on-year growth rates of -15%, -13.2%, -4.4%, -11.6%, -6.2%, until June before turning positive. Industry insiders say, "This is mainly due to the company proactively optimizing the premium term structure and continuously compressing the front-end scale."

At the third quarter performance briefing in 2024, New China Life Insurance management stated that after the "reporting and management combined" measures were introduced at the end of 2023, the company reacted somewhat slowly to the new policies, with significant impact on business in the first quarter of this year. Now gradually being sorted out, the company has reorganized the bank assurance structure and further improved the bank insurance personnel and branch management. Currently, we still take a cautious and optimistic attitude towards the development of bank insurance business.

In the future, New China Life Insurance will increase sales efforts in bank insurance by expanding through bank branches. In addition, the company will form strategic partnerships with mainstream banks to further expand and strengthen bank insurance channel business.

At the same time, the New China Life Insurance management also admitted that it will be challenging to achieve a high double-digit growth rate in new business value for the first three quarters of 2024.

For the business promotion and product layout in 2025, the management of New China Life Insurance introduced that in recent years, traditional insurance products have been the mainstream, with a very low proportion of dividend insurance. Currently, the market has undergone significant changes, and we predict that dividend insurance will become an important mainstream product driven by the industry and recognized by customers in 2025. New China Life Insurance will also prioritize dividend insurance. However, considering that the base of dividend insurance at New China Life Insurance is relatively low, we hope for steady progress in the transition.

"Perhaps New China Life Insurance will not become a leader in the market for dividend insurance overnight, but our emphasis on dividend insurance is undoubtedly in line with our peers, and we also believe that there is already a certain foundation for selling dividend insurance in the current market." The above-mentioned person stated.

New China Life Insurance's annualized comprehensive investment yield in the first three quarters was 8%, and it will gradually increase the proportion of equity varieties in the future.

Investment performance is a crucial factor affecting the profit performance of insurance companies. Against the backdrop of market fluctuations and declining interest rates, New China Life Insurance's investment performance has been outstanding.

As of the end of September 2024, New China Life Insurance's investment assets totaled 1.61 trillion yuan, with an annualized total investment yield of 6.8%, and an annualized comprehensive investment yield of 8.1%, an increase of 5.1 percentage points from the same period last year.

It is reported that in terms of investment portfolio, New China Life Insurance's stock investment amount in the first half of the year increased by 35.9% year-on-year, with an increase of 2.1 percentage points in proportion; fund investment amount increased by 37.4% year-on-year, with an increase of 1.8 percentage points in proportion; long-term equity investment amount increased by 214.8% year-on-year, with an increase of 0.7 percentage points in proportion.

Yang Yucheng, Chairman of New China Life Insurance, previously stated: "When the stock market was relatively sluggish, we acted promptly, made timely investments, seized a good timing window, conducted in-depth research, and made accurate judgments. We are bullish on the Chinese economy, as well as on A-shares and H-shares as good investment options. We believe that most of the best companies are concentrated in listed companies, especially in blue-chip premium stocks suitable for insurance capital investment and industry leaders."

In terms of conservative investments, New China Life Insurance has increased the allocation of long-duration assets, opportunistically extended the bond cycle, actively expanded the investment scope of long-duration fixed income assets, and reduced investment risks.

In terms of equity investment, the focus is on technology, security, new quality productivity, and other areas that align with the country's strategic direction of development. There is also attention given to some high-quality high-dividend varieties suitable for insurance funds investment, which have stable operations, cash flow, performance, and high dividend income.

Regarding future equity investment strategy, the management of New China Life Insurance stated that the country is currently strongly supporting the capital markets, and we maintain an optimistic attitude towards the market. In the near term, there will not be significant changes in the company's asset allocation ratio, but at the same time, we will further optimize the structure. Currently, our trading assets account for a relatively high proportion, and in the future, the company will gradually increase the proportion of FVOCI class assets, including some low-volatility strategic equity varieties.