Description of the event

China People's Insurance released its 2024 three-quarter report. The company achieved net profit of 36.331 billion yuan, an increase of 77.2% over the previous year; China People's Insurance achieved a comprehensive cost ratio of 98.2%, an increase of 0.3 pct over the previous year; and the value of the new life insurance business increased by 113.9% year on year.

Incident comments

Investment income contributed to the main profit growth. In the first three quarters of 2024, the company achieved net profit of 36.331 billion yuan, an increase of 77.2% over the previous year. Specifically, the good performance of the equity market in the third quarter may be the main reason: the estimated total investment income (interest income+investment income+fair value change gain+loss + credit impairment) increased sharply by 80.9% year on year.

Natural disasters have dragged down financial insurance profitability, and the growth rate of non-car premiums has slowed. In the first three quarters of 2024, human insurance achieved a comprehensive cost ratio of 98.2%, an increase of 0.3 pct over the previous year, mainly affected by natural disasters. According to China's financial insurance caliber, the comprehensive cost rate for car insurance was 96.8%, and the original premium income was 428.33 billion yuan, an increase of 4.6% over the previous year. By type of insurance, car insurance premiums were 213.424 billion yuan, an increase of 3.2% over the previous year, an improvement over the growth rate in the first half of the year. In terms of non-car insurance, liability insurance increased 11.8% year on year, and eHealth Insurance increased 8% year on year. The growth rate was relatively fast and both improved from the first half of the year; agricultural insurance premiums grew 1% year on year, continuing to decline from the first half of the year, and may be mainly affected by the pace of selection.

The premium growth rate in the personal insurance sector has improved, and value is growing rapidly. The quality of the People's Insurance Life Insurance business improved markedly. In the first three quarters of 2024, premiums for new long-term insurance policies were 41.413 billion yuan, or -9% year-on-year, and the growth rate improved markedly from the first half of the year. Among them, barge premiums decreased by 22.1% year on year, term premiums increased by 3.2%, and the payment structure continued to improve. Due to the impact of the integration of reporting and banks and the reduction in pricing interest rates, the value ratio of the company's new business is expected to increase markedly. Under comparable standards, the life insurance sector achieved a year-on-year growth rate of 113.9% in new business value, which is expected to be better than that of the listed industry. Human Health also achieved good performance. In the first three quarters, it achieved an annual premium of 5.231 billion yuan for new policies, an increase of 34.5% over the previous year.

I'm optimistic about the double click space for future assets and liabilities. Although natural disasters such as blizzards and freezing rain in the first quarter and floods and typhoons in the second and third quarters put a slight pressure on underwriting performance, short-term factors such as natural disasters and market fluctuations did not affect the company's steady fundamentals and profitability. At the same time, along with increased supervision of market competition, it is judged that the medium- to long-term concentration of the industry will continue to rise, and I am optimistic about the room for improvement on both sides of the company's wealth and upward valuation.

Risk warning

1. Major adjustments to industry policies;

2. The equity market fluctuated greatly, and interest rates declined sharply.