The five A-share listed insurers achieved original insurance premium income of 999.2 billion yuan from January to March 2024, a year-on-year decrease of 5.4%, and the decline narrowed month-on-month.
The Zhitong Finance App learned that Guoxin Securities released a research report saying that the “good start” for listed insurers came to an end in March, personal insurance premium income continued to be under pressure in the first quarter, and regulations continued to guide industry channel adjustments to reduce rigid costs on the debt side. Against this background, the premium income performance of listed insurers has basically bottomed out and rebounded. Against the backdrop of continuous adjustment of channel quality and continuous improvement of insurance product forms, it is beneficial to the industry's medium- to long-term NBV recovery. The financial insurance business benefited from savings over the first quarter and continued recovery in the economic situation, and premium income continued to grow. It is recommended to focus on China Life Insurance (601628.SH), which has a leading edge in personal insurance channels, and China Taibao (601601.SH), which has achieved remarkable results in debt-side reforms.
Guoxin Securities's views are as follows:
Supervision guides pressure down debt costs, increases leading share, and optimizes the industry pattern.
In the first quarter of 2024, under regulatory guidance, the insurance industry continued to reduce debt costs. The five A-share listed insurers achieved original insurance premium income of 999.2 billion yuan from January to March 2024, a year-on-year decrease of 5.4%, and the decline narrowed month-on-month. Among them, China Life Insurance's leading advantage is highlighted. Premium income is highly resilient. Cumulative premium income increased 3.2% year on year, and the growth rate was 0.4 points higher than in February; China Ping An's premium income increased 1.6% year on year in the first quarter, achieving a “good start”. The cumulative premium income of China Taibao, China Insurance, and Xinhua Insurance declined by 0.2%/2.7%/11.7% year on year, respectively. Xinhua Insurance was affected by the restructuring of banking insurance channels and the decline in premium payment income.
The results of the personal insurance channel reform were gradually released, which is beneficial to stabilizing NBV growth in the second half of the year.
Judging from the monthly premium income performance, with the exception of Xinhua Insurance, the other four companies all achieved significant year-on-year improvements. China Life Insurance, Ping An Life Insurance, Taibao Life Insurance, and People's Insurance Life Insurance increased by 4.4%/5.1%/4.7%/31.2%, respectively. With the “good start” coming to an end one after another, listed insurers boosted their premium income in the first quarter. Monthly premium income increased by an average of 48% month-on-month, the results of reforms in various channels were gradually released, and the resilience of agents in the exhibition industry improved markedly. Furthermore, recently, the regulatory authorities requested personal insurance companies to further reduce the settlement interest rates for universal insurance and dividend insurance. Some small and medium-sized insurers lowered the upper limit of universal insurance settlement interest rates to 3.3%, and large insurers to 3.1%. It is expected that the industry will continue to promote the creation of “bottom guarantee+high fluctuation” products to reduce rigid expenses by increasing debt-side elastic costs. Considering that the universal insurance currently sold by insurance companies is mainly in the form of “additional products”, which are bundled with other savings products to increase policy benefits, it is expected that the relevant policies will have limited impact on subsequent premium increases, and its product functions will still be competitive.
People's insurance and non-car insurance increased dramatically from month to month, and they have continued to lead the industry's growth rate.
From January to March 2024, the financial insurance business of listed insurers achieved premium income of 315.5 billion yuan. The year-on-year growth rates were: Taibao Financial Insurance (8.6%), People's Insurance (3.8%), and Ping An Insurance (2.8%). Overall, the “old three” financial insurance business continued the growth trend over the years. Financial insurance premium income in March 2024 increased by 57.3% compared to the same period in 2018.
In the first quarter of 2024, the premium income of the financial insurance business stabilized under the influence of the holiday season effect and the background of increased consumption. Among them, human insurance and non-auto insurance maintained a high growth rate, while corporate financial insurance, cargo insurance, and eHealth insurance increased 11.3%/9.4%/6.2% year-on-year. Taibao Financial Insurance continues to lead the premium growth rate. From January to March 2023, it achieved premium income of 62.5 billion yuan, up 8.6% year on year and 73% month on month.
Risk warning: “good start” premiums fall short of expectations; agent reforms fall short of expectations; capital markets continue to fluctuate; long-term interest rates decline; stricter regulations, etc.