Jinwu Financial News | CMB International stated that in December, the growth rate of life insurance premiums for listed insurance companies showed significant divergence. Due to the slowdown in new single sales momentum for the industry ahead of the 2025 opening season, the growth rate of insurance companies' premium income weakened month-on-month in November and December. In December, the six listed insurance companies' life insurance premium income was 82.3 billion yuan, a year-on-year decrease of 2.5%, reflecting a month-on-month decline of 1.9 percentage points compared to November.
In December, the growth rate of life insurance premiums diverged, influenced by the opening season rhythm and differentiated product strategies. Looking ahead, the bank expects that the new business value (NBV) of listed life insurance companies in 2025 is likely to maintain steady growth, benefiting from the continuous improvement in the NBV value ratio; after 1Q25, fluctuations in first-year new single premium for life insurance are expected to ease, as starting from April 2025, new single sales in life insurance will generally face the impact of a higher base, coupled with the possibility of a rate decrease within the year, which will also have a certain impact on the underwriting demand from customers.
In December, five listed insurance companies' property insurance premium income was 93.2 billion yuan, remaining the same year-on-year (November: year-on-year +8.4%), mainly affected by the slowdown in non-auto insurance business growth. Looking ahead to 2025, the bank forecasts that auto insurance premiums are expected to achieve steady growth based on the sustained momentum of new car sales and the increasing penetration rate of Electric Vehicles, maintaining the FY24E/FY25E annual premium growth rate for auto insurance at 4%/6%; for the non-auto business sector, policy-related businesses, such as agricultural insurance, are expected to stabilize and rebound based on a low baseline in 2024.
The bank indicated that the valuation of the insurance sector is trading at 0.1-0.5 times FY25EP/EV and 0.4-0.9 times FY25EP/BV, with a median dividend yield of 5.4%. The industry rating is maintained at "outperform the market", recommending to Buy quality industry leaders such as Ping An Insurance (02318, Buy, Target Price: 65.1 HKD), China Life Insurance (02628, Buy, Target Price: 20.0 HKD), China Pacific Insurance (02601, Buy, Target Price: 35.5 HKD), and PICC P&C (02328, Buy, Target Price: 14.0 HKD).
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