The Zhitong Finance App learned that Fangzheng Securities released a research report saying that the improvement in insurance asset-side expectations and the debt-side inflection point gradually confirm that valuations are still at the bottom. Maintenance recommendations: At the end of 10/18, A-share insurance's 24-year dynamic PEV was only 0.51x, with a historical ranking of 5.4%, with undervaluation being highly elastic and debt-side NBV expected to continue to exceed expectations, China Life Insurance (601628.SH), which has sufficient asset-side flexibility and steady management, and China Taibao (), and AIA (01299), etc.; financial insurance: Zhongan Online (06060), China Financial Insurance (02328), China Insurance (02328), China Insurance (601336.SH 601601.SH 601319.SH).
The main views of Fangzheng Securities are as follows:
Life insurance: Product demand continues to be released, and high-quality channel development results have been shown. It is expected to continue to grow in 24 years.
1) Demand for insurance products continues to pick up: Residents' willingness to save is still in an expansion cycle, the long-term capital protection yield of insurance products (3% lifetime compound interest) is showing, and the competitiveness of insurance products is strong; at the same time, demand for serious illnesses and medical insurance is expected to continue to pick up as consumption recovers, and demand for insurance products will continue to be released.
2) The number of individual insurance teams has steadily increased in quality, and NBV has grown in basic market: Individual insurance is the core contribution channel for NBV. The number of agents of listed insurers has stabilized and production capacity has doubled. As market demand picks up, it will boost the steady growth of NBV for listed insurers in 24 years.
3) The volume and price of banking insurance channels have both risen, and NBV is the second driving force for growth. The signing of new rate products is progressing smoothly. The NBVM product is expected to improve. Combined with the natural advantages of saving customer resources, it is expected to become the second growth point for NBV.
Financial insurance: Premium growth momentum is sufficient, and COR is expected to improve.
1) It is expected that financial insurance premiums of listed insurers will maintain high single-digit growth in 24. Auto insurance is expected to maintain steady growth thanks to car purchase subsidies and an increase in the penetration rate of new energy sources; non-auto insurance benefits from the state's policy support for agriculture, health, production safety, etc., and is expected to continue to grow in double digits; auto insurance and non-car insurance double increases guarantee premiums will increase steadily.
2) The 24-year COR is expected to improve year over year. COR was affected by the risk of major disasters and worsened year-on-year in '23, but thanks to sufficient reserve withdrawals and the booming development of low-cost channels (the share of China's financial insurance direct sales quality control channels rose from 71% in '21 to 87% of 1H23), COR is expected to remain steady; in '24, COR is expected to improve year on year under reduced disaster risk, product pricing adjustments, and integrated car insurance reporting adjustments.
Asset side: Long-term interest rates stabilized+equity allocation risk appetite increased, asset-side expectations improved. Market confidence is expected to gradually recover, such as an increase in national team holdings and repurchases by some companies; economic recovery expectations will increase, interest rates will stabilize, and pressure on insurers to reallocate assets will ease; economic recovery is also expected to drive equity investment back up, and profits will be elastic upward.
Risk warning:Equity markets fluctuate, credit risk exposure, new product sales fall short of expectations, decline in long-term interest rates, and continued loss of agent teams.