The Zhitong Finance App learned that Open Source Securities released a research report saying that looking ahead to the full year of 24, it is expected that the listed insurer NBV will maintain a good growth rate. The cumulative NBV growth rate is expected to decline somewhat. The Q1NBV growth rate exceeds expectations and the value ratio continues to improve, and the annual NBV growth rate is expected to be better than market expectations at the beginning of the year; multiple regulatory measures have been taken (planned interest rate reduction, integration of reporting, lowering universal and dividend insurance settlement interest rates, and abolishing the “1+3” branch limit for bank insurance products), leading insurers actively adjust product structures (improve prepayment products and shorten the longevity of key products (Term difference). It is expected that the industry's debt costs will continue to fall. Focus on asset-side recovery opportunities as a deterrent to core valuation. Since April 26, long-term interest rates have gradually stabilized, and the steady real estate growth policy has continued to gain strength, focusing on the performance and valuation catalyst brought about by the insurance asset side.
Recommended targets: Introduce the insurance sector with an advantage on both the business side and policy side; recommend China Taibao (02601), which has smooth debt-side transformation; recommend China Life (02628), which has a highly flexible asset-side target; and China Financial Insurance (02328), which has a high dividend target.
The main views of Open Source Securities are as follows:
The growth rate of personal insurance premiums improved in April. The Q1NBV growth rate exceeded expectations, and the outlook for the debt side is optimistic for the whole year
According to Open Source Securities, the total premiums of the five listed insurance companies in April 2024 totaled 108.5 billion yuan, up 0.9 pct from March, including: China Taibao +12.3%, China Life Insurance +9.7%, China Ping An +6.3%, and Xinhua Insurance -11.6%. The premium growth rate of most listed insurance companies improved in April. It is expected that the increase in individual insurance production capacity will mainly drive the premium growth rate to pick up. From January to April 2024, the total premiums of the five listed insurers were +0.4% year-on-year. The growth rate was +0.9 pct compared to March, and positive growth has resumed since the beginning of the year. Among them, China Life Insurance +3.9%, China Ping An +2.1%, China Insurance -2.3%, China Taibao -3.5%, and Xinhua Insurance -11.7%.
The growth rate of NBV of listed insurers in 2024Q1 exceeded expectations. Q2 is expected to decline somewhat due to the high base. Looking forward, the NBV growth rate is expected to continue to be good throughout the year. The growth rate of NBV of listed insurers in 2024Q1 exceeded expectations: People's Insurance Life Insurance +82%, Xinhua Insurance +51%, China Taibao +31% (incomparable caliber), China Life Insurance +26.3%, and China Ping An +21%. The main beneficiaries of the products were reduced in predetermined interest rates+cost reduction and efficiency in the integrated reporting and efficiency, and the optimization of the term structure drove a significant increase in margin. On the demand side, demand for pension savings is strong. On the supply side, the per capita production capacity of insurance companies continues to increase, integrated reporting and product structure optimization drive a sharp increase in the value ratio of banking insurance services, and active policy support to reduce insurers' debt costs. It is expected that NBV will continue to grow at a good rate throughout the year.
The high increase in premiums paid by China People's Insurance in April is related to the pace of investment. Renewal premiums continued to grow at a high rate
China China Insurance Personal Insurance achieved premium income of 10.6 billion yuan in April, +9.7% year-on-year, with a cumulative growth rate of -2.3%, compared to +1.4pct in March. The premium for a new one-month long-term insurance policy was 2.7 billion, -11.1% year-on-year, down 38 pcts from March, and the cumulative growth rate was -15.5%. Among them, monthly new single payment/instalment premiums were +48.6%/-34.2%, respectively, and the cumulative growth rate was -22.9%/-3.8%, respectively. The April renewal achieved premium income of 4.8 billion yuan, +50.9% year-on-year, compared with +2.3 pct in March. The cumulative growth rate was +10%, and +4.1% compared to March. The high increase in premium payments in April is related to the pace of product launch, and the continued high increase in renewal premiums is expected to be related to factors such as the ongoing business base, payment and term structure, and renewal rate.
The growth rate of financial insurance premiums slowed in April 2024, the growth rate of personal insurance car insurance picked up, and non-car insurance declined year-on-year
In April 2024, the financial insurance premium income of the four listed insurers was 78.2 billion yuan, down 6.9pct from March. The year-on-year revenue for each was: Zhongan Online +6.3% (March +22.3%), Taibao Financial Insurance +4.7% (March +12.7%), Ping An Insurance +4.1% (March +5.9%), and People's Insurance -1.4% (March +7.8%). In addition, Sunshine Insurance +10.3% (February +13.8%). Passenger car/new energy vehicle sales in April 2024 were +10.5%/+33.6% year on year, compared to March 2024 -0.4 pct/-1.7 pct.
People's Insurance's auto insurance premiums were +3.5% year-on-year in April. The growth rate was +0.3 pct compared to March. The recovery in passenger car sales led to an improvement in car insurance growth. Non-car insurance -7.8% year-on-year in April, compared to 18.2pct in March, cumulative year-on-year +3.3% year-on-year in April, and -1.8pct compared to March. Among them, iHealth Insurance/Agricultural Insurance/Liability Insurance/Corporate Financial Insurance/Credit Guarantee Insurance were -6.1%/-12.2%/-1.2%/-15.3%/-25.3%, respectively. Open Source Securities predicts that the decline in the growth rate of non-car insurance premiums is expected to be related to delays in the pace of bidding in some regions and the company's active pressure drop on some high-risk businesses. Looking ahead, the human insurance and non-car insurance business is expected to pick up in the future.
Risk warning: The economic recovery fell short of expectations; the recovery in demand for insurance products fell short of expectations.