On October 30, Financial Associated Press (Reporter Xia Shuyuan) October 30, China Pacific Insurance released its third quarter report for 2024. The data shows that in the first three quarters of 2024, China Pacific Insurance achieved operating income of 310.564 billion yuan, a year-on-year increase of 21.3%, with insurance service income of 209.409 billion yuan, a year-on-year increase of 2.3%.

In the first three quarters of 2024, the group achieved a net income of 38.31 billion yuan, a significant year-on-year increase of 65.5%. Among them, the net profit in the third quarter was 131.78 billion yuan, a year-on-year increase of 173.57% compared to the same period last year's 4.817 billion yuan.

Regarding the significant increase in net income attributable to the parent company, Huaxi Securities' Chief Analyst for Non-Financials, Li Jian, stated that with the policy stimulus at the end of September, the market sentiment was high, and there was a significant increase in stock market gains, leading to a substantial year-on-year increase in investment income for the company, driving high net income growth. China Pacific Insurance also stated in the third quarter report that the company is strengthening active equity management, consistently selecting undervalued, high-dividend, and long-term profitable equity investments to address the low-interest rate market environment.

It is noteworthy that in response to the strategic focus on future life insurance reforms, the relevant personnel of China Pacific Insurance stated at the 2024 third quarter performance briefing that the company will reconsider in light of current market environment changes, but will continue to focus on customer-centric value targets to design future product, distribution, and regional development strategies. In terms of investment strategy, the company will gradually increase the allocation of high-dividend stocks in accordance with the new accounting standards.

Pacific Life Insurance will strengthen the development of the dividend insurance market and adjust the strategic focus of life insurance reform in conjunction with market conditions.

From the performance perspective of the life insurance liability side, along with continuous optimization of product structure and further deepening of channel integration, Pacific Life Insurance's new business value is gradually improving.

Specifically, in the first three quarters of 2024, Pacific Life Insurance achieved insurance service income of 62.345 billion yuan, a year-on-year decrease of 2.5%; scale premiums amounted to 230.059 billion yuan, a year-on-year increase of 3.3%.

In terms of channels, in the first three quarters of 2024, China Pacific Insurance life insurance agent channel achieved a scale premium of 179.149 billion yuan, a year-on-year increase of 4.1%. Among them, the scale premium of new business reached 33.832 billion yuan, a year-on-year increase of 16.3%.

In terms of human resource productivity, the average core workforce scale is 0.058 million people, a year-on-year increase of 2.4%. The core workforce's monthly average first-year scale premium is 0.061 million yuan, a year-on-year increase of 15%. The increase in new workforce year-on-year is 15.5%, and the year-on-year increase in the average monthly first-year scale premium for new employees is 35%.

Looking at the bancassurance channel, China Pacific Insurance life insurance achieved a scale premium of 34.727 billion yuan in the first three quarters, a year-on-year increase of 6.2%. Among them, the scale premium of new business was 24.015 billion yuan, a year-on-year decrease of 18.4%, and the renewal business scale premium was 10.712 billion yuan, a year-on-year increase of 227.7%.

Group insurance channel premium scale was 14.52 billion yuan, a year-on-year decrease of 12.8%. Among them, new business was 12.824 billion yuan, a year-on-year decrease of 19.3%; and renewal business was 1.696 billion yuan, a year-on-year increase of 125.8%.

Industry insiders stated that China Pacific Insurance life insurance agent channel continues to deepen the transformation of "core individual insurance", continuously enhances team's professional capabilities, and keeps core operational indicators stable and growing. In addition, benefiting from the integration of banking and insurance to reduce debt costs, and improving the premium payment structure, new business in the bancassurance channel has been unlocked.

Data shows that in the first three quarters, China Pacific Insurance life insurance achieved a new business value of 14.238 billion yuan, a year-on-year increase of 37.9%.

Regarding the market's concerns about structural adjustments, China Pacific Insurance stated that the sales of dividend insurance in the third quarter increased significantly month-on-month, especially the proportion of new premium contribution in October doubled compared to September. The company will further strengthen the cultivation of the dividend insurance market, aiming to generate new business growth. It is reported that China Pacific Insurance life insurance has completed the R&D of the main dividend insurance products for the first quarter of 2025. The company will continue to adhere to diversified channel development and diversified product operation, promoting product structure optimization based on solidifying value.

Regarding the strategic focus of future life insurance reforms, China Pacific Insurance stated that considering the current macroeconomic environment and changes in population structure, as well as the regulatory authorities' new positioning for the industry's future development, the company will reconsider based on the deep transformation requirements of the industry. However, in terms of value objectives, it will still adhere to customer-centricity to design future strategies for product offering, channel, and regional development. The company is confident in the sustainable growth of new business value in 2025.

In the first three quarters, China Pacific Insurance's property insurance premium income increased by 7.7% year-on-year, with a comprehensive cost ratio of 98.7% year-on-year flat.

In terms of property insurance business, in the first three quarters of 2024, China Pacific Insurance achieved insurance service revenue of 145.202 billion yuan, a 4.1% year-on-year increase; original premium income was 159.819 billion yuan, a 7.7% year-on-year growth rate higher than the industry average level.

Among them, the original premium income of auto insurance was 78.131 billion yuan, a 3.3% year-on-year increase; the original premium income of non-auto insurance was 81.688 billion yuan, a 12.2% year-on-year increase. In the first three quarters of 2024, the underwriting combined ratio was 98.7%, flat compared to the same period last year.

A relevant person from China Pacific Insurance stated that in the first three quarters of 2024, heavy rain, flooding, typhoons, and geological disasters with high intensity and wide range have caused certain disturbances to the company's comprehensive cost ratio. However, it is believed that with the passage of time, the company's full-year comprehensive cost ratio fluctuations are expected to gradually smooth out.

The net investment yield for the first three quarters decreased by 0.1 percentage point, and will continue to increase the allocation of high dividend stocks.

As of the end of the third quarter of 2024, China Pacific Insurance Group's investment assets reached 2.58 trillion yuan, a 14.9% increase from the end of the previous year.

In the first three quarters of 2024, China Pacific Insurance's net investment yield on investment assets was 2.9%, a 0.1 percentage point decrease year-on-year; the total investment yield was 4.7%, a 2.3 percentage point increase year-on-year.

From the company's profit structure perspective, in the first half of the year, the proportion of China Pacific Insurance's investment performance in pre-tax profit, i.e., the total investment income net amount minus underwriting financial losses, reached 40%. Huaxi non-banking financial analyst Luo Huizhou told Caixin reporters: "Therefore, the significant growth in investment income in the first three quarters of 2024 provides strong support for net income."

In terms of asset allocation, including stocks and funds, China Pacific Insurance's equity asset allocation ratio is at a median level among listed insurance companies, reaching a total of 11.7% by the end of the first half of the year. Among them, FVOCI stocks, FVTPL stocks, and funds account for 1.9%, 7.1%, and 2.7% respectively.

"In the first half of 2024, due to increased allocation to FVOCI stocks, China Pacific Insurance's equity asset allocation ratio increased slightly by 0.4 percentage points compared to the previous period. In addition, although the company's proportion of FVOCI stock allocation is not high, the company may include more high-yield stocks in the FVTPL category, where the proportion of high-yield stock allocation may exceed that of FVOCI stocks," said Li Jian.

According to relevant personnel from China Pacific Insurance, in terms of asset allocation strategy, the company has always emphasized the value of high dividend yield strategy, which is also an investment strategy that the insurance industry currently values ​​a lot. Over the past two to three years, the company's adherence to this strategy has achieved good results.

"We believe that there is still a need to persist with this strategy in the long term, especially in conjunction with the existing new accounting standards. In fact, China Pacific Insurance has been increasing the proportion of equity assets entering the FVOCI category, of course, this increase is a gradual process, and currently our benchmark ratio has exceeded 2%,” explained the above-mentioned individual.