Original title: Analysis of the sharp decline in the net profit of listed insurance companies in the first quarter: the sales of individual insurance have not improved, and the volatility of the stock market has dragged down investment
Economic Observer reporter Jiang Xin“This year is more difficult than last year.” Guo Ting (pseudonym), who has only opened two orders this year, began to think of other ways to make money.
In 2020, she came to Nanjing from a first-tier city. Guo Ting completed her transition from an advertising designer to an insurance agent. In her third year of practice, she felt that the business was getting more and more difficult.
Guo Ting’s “difficulty” is also reflected in the first-quarter performance reports disclosed by listed insurance companies: premium growth is under pressure.
At the same time, the reduction in investment income brought about by capital market volatility has become another pressure on listed insurance companies, so that the decline in net profit has become a key word in quarterly report disclosures.
In the volatility of the equity market in the first quarter, investors did not show enough enthusiasm for listed insurance companies. Wind data shows that from the beginning of the year to May 6, New China Insurance, China Pacific Insurance, China Life, and China Ping An accumulated a cumulative decline of 28.55%. %, 26.03, 16.58% and 12.6%.
In fact, it is not only the listed insurance companies that are “tragic”. With the disclosure of the solvency reports of unlisted insurance companies, the overall business veil of the industry is gradually lifted. Data shows that among the 75 life insurance companies that have disclosed so far, 42 insurance companies are in a state of loss, with a cumulative loss of nearly 10 billion.
The pressure of individual insurance is still great, and the attractiveness of bancassurance has greatly increased
Because of the epidemic, Guo Ting participated in fewer “mobilization meetings”, and did not pay as much attention to the company’s performance as in previous years. When talking about this issue, Guo Ting joked, “Is the company worse than us?”
The highlight of Guo Ting’s career was in the first quarter of last year, when the old rules and new rules for critical illness insurance were switched, and thyroid would no longer be used as a critical illness claim. Since then, it has entered a difficult period.
“I was looking forward to a good start in 2022, but I found that the effect of the good start was not ideal. The epidemic has been wave after wave, and it is difficult to visit customers. I spend most of my time online to answer some questions for friends around me, but I rarely think about it. Buying insurance.” Guo Ting said that what made her feel even more powerless was the implementation of “double recording” (audio and video recording).
Guo Ting’s pressure was passed on to the insurance company and turned into figures on the report. According to the research report of Guotai Junan’s non-bank team, from January to March 2022, the growth rates of the original insurance premium income of listed insurance companies are: PICC, a year-on-year increase of 17.9%, China Pacific Insurance, a year-on-year increase of 4.2%, New China Insurance, a year-on-year increase of 2.4%, and China Life Insurance. It decreased by 2.7% year-on-year, and Ping An decreased by 8.4% year-on-year.
In terms of new single premiums, the first quarter continued the decline in 2021. Among the several listed insurance companies, only PICC Life and CPIC Life achieved positive growth in new single premiums. Specifically, the new policy premiums of China Life Insurance, New China Insurance and Ping An in the first quarter fell by 1.5%, 6.8% and 15.4% respectively, while PICC and China Pacific Insurance achieved positive growth of 45.5% and 22.1%. According to analysts, the positive growth is expected to be mainly contributed by the single payment business of the bancassurance channel. Against the background of the net value of bank wealth management products and the decline of long-term interest rates, bancassurance products with certainty of income have greatly increased their attractiveness, and some of them have been listed on the market. Insurance companies strategically restarted bancassurance to drive overall new order growth.
The agent channel to which Guo Ting belongs has dropped significantly: From January to March 2022, the year-on-year increase in premiums of Ping An, New China Insurance, and China Pacific Insurance agent channel was -15.7%, -26.9% and -44.1% respectively.
From the perspective of the entire industry, the trend of slowdown in growth rate is obvious. Wang Chaodi, chief inspector of the China Banking and Insurance Regulatory Commission and director of the general office, introduced the insurance industry at a press conference of the State Council Information Office: the total assets of the insurance industry were 25.5 trillion yuan, a year-on-year increase of 2.6%. The original insurance premium income of insurance companies was 1.8 trillion yuan, a year-on-year increase of 4.4%.
A senior practitioner in the industry once summarized the situation experienced by the insurance industry in the past two years: starting from 2020, the entire individual insurance transformation of the life insurance industry has been under tremendous pressure. Looking at the repeated epidemics, especially the on-site management of personal insurance marketing and personal visits to customers have been affected; the second is that the chronic illnesses accumulated in personal marketing over the past 30 years have become increasingly prominent, resulting in a greater impact on the personal marketing system. “Hit the wall overnight”; the third pressure comes from supervision, the company strictly implements a series of regulatory measures; the other is the strict implementation of “double recording” (audio and video), it can be said that the insurance problem is the most prominent development of the current insurance industry The problem.
Investment side crushes profits
The pressure on the underwriting side has already begun to show signs of pressure. The profit of the insurance industry in the first quarter of this year is under pressure, and there is also the investment pressure caused by the volatility of the capital market in the first quarter.
Under the intertwining of many uncertain factors that exceeded expectations, the A-share market went out of a rapid decline. Wind data shows that in the first quarter, the Shanghai Composite Index has dropped from nearly 3,600 points at the beginning of the year to 3,200 points, with a cumulative decline of 10.14% and an annualized rate of return of -36.43%. Insurance capital, which is regarded as a ballast stone in the capital market, is also difficult to survive in the face of market fluctuations.
Market interest rates are at a low level, which makes the changes in the 750-day moving average yield curve of government bonds continue to erode profits. Coupled with the high base in the same period last year, life insurance companies whose profits have been greatly affected by investment performance have handed over “decline” results in the first quarter. one.
The data shows that the net profit attributable to the parent company of Ping An, China Life Insurance, China Pacific Insurance, and New China Insurance in the first quarter of 2022 were 20.658 billion, 15.178 billion, 5.437 billion, and 1.344 billion, respectively, with a year-on-year growth rate of -24.1%, -46.9%, -36.4%, -78.7%. Taking Xinhua Insurance with the largest drop as an example, in the first quarter of 2021, it took the initiative to realize the floating profit by taking the initiative to grasp the market window, which caused the investment income to increase by 57.8% year-on-year to 19.558 billion. In 2022, this figure is only 118.76. billion.
According to the data of the first quarterly report, affected by the stock market, the investment yields of listed insurance companies all declined year-on-year. The Nianhua net investment returns of China Life, China Pacific Insurance, and China Ping An were 4.0%, 3.7%, and 3.3%, respectively, down 0.08 basis points year-on-year. , 0.20 basis points, 0.20 basis points; New China Insurance, China Life, China Pacific Insurance, and China Ping An’s annualized total investment yields were 4.0%, 3.9%, 3.7%, and 2.3%, down 3.90 basis points, 2.56 basis points, 0.90 basis points, and 2.3% year-on-year, respectively. 0.80 basis points.
The pressure on the investment side is not only reflected in several listed leading insurance companies. Although the relevant data has not been disclosed in detail, clues can still be seen in the solvency reports of unlisted insurance companies.
Data show that in the first quarter of 2022, life insurance companies made a total profit of 45.6 billion yuan, a decrease of 31.7 billion yuan from the same period last year, a decrease of about 41%. Among the more than 40 loss-making companies, 6 life insurance companies lost more than 500 million yuan, of which Qianhai Life Insurance and Minsheng Life Insurance suffered losses of 2.323 billion yuan and 1.382 billion yuan respectively.
According to Qianhai Life’s solvency report, in the first quarter of 2022, the company achieved insurance business income of 10.95 billion yuan, a comprehensive investment rate of return of -0.83%, insurance contract liabilities of 281.21 billion yuan, a comprehensive surrender rate of 3.58%, and a net universal account business. Cash flow – 2.15 billion yuan, and looking back at the universal insurance products it has released in the past few years with a demo rate of up to 5%, the pressure it faces is evident.Return to Sohu, see more
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