Due to the unfavorable start of the equity market, the investment yields of insurance companies generally declined in the first quarter, and some companies even experienced negative returns. However, although investment income in the first quarter retreated sharply or even lost money, most insurance companies said that at the current point in time, the market’s valuation advantage is obvious, and the long-term allocation value has become prominent.
First-quarter results were mostly affected by investment
In the first quarter, affected by many factors, the A-share market experienced a relatively obvious correction. In this context, the equity investment of insurance capital has also been greatly affected.
On the evening of April 27th,China Life InsuranceReleased the first quarter results report of 2022. According to the first quarterly report, China Life achieved operating income of 343.777 billion yuan, a year-on-year decrease of 8.0%; net profit attributable to shareholders of the parent company was 15.178 billion yuan, a year-on-year decrease of 46.9%. In response to the decline in net profit, China Life said that due to the combined impact of current equity market fluctuations and the high base in the same period in 2021, investment income declined year-on-year.
As of the first quarter of 2022, China Life’s investment assets reached RMB 4,717.681 billion, China Life’s total investment income was RMB 44.558 billion, and the simple annualized total investment yield was 3.88%; the net investment income was RMB 45.814 billion, a year-on-year increase 10.7%, and the simple annualized net investment yield is 4.00%.
China Life said that in the first quarter of 2022, the domestic interest rate level was still at a low level, the equity market experienced a large pullback, and the company’s investment income was under pressure. The company adheres to the concept of long-term investment, stable investment and value investment, appropriately adjusts the pace of long-term asset allocation, and increases allocation of medium and short-term fixed income varieties to ease allocation pressure.
It is not an isolated case where the decline in the investment income of insurance companies has dragged down the company’s performance.Ping AnIn the first quarter, the annualized net investment yield of the insurance fund investment portfolio was 3.3%, and the annualized total investment yield was 2.3%. In this regard, Ping An also gave a similar statement. In the first quarter of this year, as the Federal Reserve accelerated the process of raising interest rates and shrinking its balance sheet, and factors such as superimposed geopolitical conflicts further pushed up inflation expectations and risk aversion, the global capital market experienced large fluctuations, and the stock market overall. Market interest rates in major economies rose rapidly. The domestic economic and industrial structure adjustment continues to deepen, and under the influence of the new crown pneumonia epidemic, the downward pressure on economic growth and the increase in the market risk premium, the market interest rate fluctuates in the range, and the credit spread has increased. Affected by a variety of factors, the investment income of the insurance fund investment portfolio was under pressure.
April 29,New China InsuranceThe first quarter report for 2022 was released. The report shows that in the first quarter, New China Insurance achieved a net profit of 1.344 billion yuan attributable to shareholders of the parent company, a year-on-year decrease of 78.7%; its operating income was 74.963 billion yuan, a year-on-year decrease of 7.9%. New China Insurance stated that under the circumstance of a high base of net profit in the same period of the previous year, the current period was affected by the downturn in the capital market and investment income decreased, resulting in a year-on-year decrease in net profit for the current period. As of the end of March, the investment assets of New China Insurance were 1,096.070 billion yuan, an increase of 1.2% over the end of the previous year. In the first quarter of this year, the annualized total investment yield of New China Insurance was 4.0%, a year-on-year decrease of 3.9 percentage points.
At the 2021 annual results conference at the end of March, Li Quan, president of New China Insurance, called “the pressure is huge” when asked about investment.
Li Quan said: “We are mentally prepared for this year’s situation, so we actively respond to investment and make some adjustments in major asset classes.” Li Quan said that although the beginning of the year encountered a very severe situation, But the future is generally optimistic. On the one hand, China’s overall economic situation is relatively good globally. On the other hand, it is better to encounter such problems at the beginning of the year than at the end of the year. “This will give us more Time to make some adjustments and further investment operations, and the current cash flow of insurance funds is still good.”
Low-valued blue-chip stocks are the key layout direction of insurance capital
according toSoochow SecuritiesAnalyst Hu Xiang’s statistics show that the total investment yield of listed insurance companies in the first quarter fell by 2 percentage points year-on-year to 3.5%. Affected by the large fluctuations in the capital market and the rise of credit risk, the total year-on-year growth rate of investment income + fair value changes of listed insurance companies was -43.1% (the corresponding year-on-year growth rate in the first quarter of last year was +42.4%).
From the perspective of non-listed insurance companies, among the 153 insurance companies that released relevant indicators in the first quarter, about 65% of the companies had negative comprehensive investment returns.
For example, in the first quarter, Taikang Life’s investment yield was 0.45%, and the comprehensive investment yield was -1.63%.
However, from the perspective of insurance capital positions, the outlook for the capital market is not pessimistic.straight flushData show that as of the end of the first quarter of this year, a total of 232 insurance institutions and their products appeared in the list of the top ten tradable shareholders of 581 listed companies. From the perspective of changes in shareholding, insurance capital mainly increased its holdings of real estate stocks in the first quarter; financial stocks mainly in the banking industry are still the target of heavy positions for insurance capital.
Judging from the changes in the number of shares held by insurance capital, in the first quarter of this year, the listed companies with the largest increase in insurance capital were:China Chemicala total of 92.57 million shares were held by the two products of Taikang Life Insurance.Vanke AImmediately after, “New China Life Insurance Co., Ltd. – Dividends – Personal Dividends” increased its holdings of 90.15 million shares.BOE A、Jinke sharesThe insured capital increased their holdings by 89.77 million shares and 81.53 million shares respectively, ranking third and fourth.
From an industry perspective, in the first quarter, insurance capital increased its layout in the real estate industry. Among the top ten listed companies with increased shares held by insurance capital in the first quarter, Vanke A and Jinke Co., Ltd. both belong to the real estate industry. In addition, industries such as civil engineering and construction, computer, communication and other electronic equipment manufacturing, chemical raw material and chemical product manufacturing are also favored by insurance funds.
Chen Li, director of the Chuancai Securities Research Institute, said that insurance capital is affected by its own attributes, and safety is the first element of its investment consideration, which is higher than the demand for profitability. The overall investment style is cautious, so insurance capital prefers layout In industries with stable growth in performance, low-valued blue-chip stocks are the key direction of insurance capital layout.
Zhang Di, Assistant President and Chief Investment Officer of China Life, said earlier that our judgment on the long-term improvement of the long-term capital equity market and the value of long-term allocation has not changed. Below, the allocation value gradually emerges. Therefore, for long-term investment, the valuation angle has reached the condition of adding positions on the left.
PICCVice President Li Zhuyong said frankly that since the beginning of 2022, major global capital markets have experienced relatively large fluctuations. The domestic economic development is facing the triple pressure of “shrinking demand, supply shock, and weakening expectations”. In such an internal and external environment, the domestic capital market was under great pressure in the first quarter. “Looking ahead, we believe that the equity market is at a bottoming stage in the short term, but the value of medium and long-term allocations has become prominent.”
Taikang Life said that in the first quarter, the uncertainty of the domestic and foreign macro environment increased significantly, the domestic and foreign capital markets fluctuated violently, and the company’s equity investment saw a certain withdrawal. In the short term, the company has accumulated historical floating profits, which can smooth the impact of short-term market fluctuations to a certain extent; in the long run, the healthy development of China’s economy will remain unchanged, and will adhere to the concept of long-term investment and value investment, continue to give full play to professional advantages, and improve long-term income levels.
(Author: Ye Maisui Editor: Bao Fangming)
【Editor: Fu Jianqing】
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The investment income of insurance companies in the first quarter is under pressure, and the investment in the future is not pessimistic
Due to the unfavorable start of the equity market, the investment yields of insurance companies generally declined in the first quarter, and some companies even experienced negative returns. However, although investment income in the first quarter retreated sharply or even lost money, most insurance companies said that at the current point in time, the market’s valuation advantage is obvious, and the long-term allocation value has become prominent.
First-quarter results were mostly affected by investment
In the first quarter, affected by many factors, the A-share market experienced a relatively obvious correction. In this context, the equity investment of insurance capital has also been greatly affected.
On the evening of April 27, China Life released its 2022 first quarter performance report. According to the first quarterly report, China Life achieved operating income of 343.777 billion yuan, a year-on-year decrease of 8.0%; net profit attributable to shareholders of the parent company was 15.178 billion yuan, a year-on-year decrease of 46.9%. In response to the decline in net profit, China Life said that due to the combined impact of current equity market fluctuations and the high base in the same period in 2021, investment income declined year-on-year.
As of the first quarter of 2022, China Life’s investment assets reached RMB 4,717.681 billion, China Life’s total investment income was RMB 44.558 billion, and the simple annualized total investment yield was 3.88%; the net investment income was RMB 45.814 billion, a year-on-year increase 10.7%, and the simple annualized net investment yield is 4.00%.
China Life said that in the first quarter of 2022, the domestic interest rate level was still at a low level, the equity market experienced a large pullback, and the company’s investment income was under pressure. The company adheres to the concept of long-term investment, stable investment and value investment, appropriately adjusts the pace of long-term asset allocation, and increases allocation of medium and short-term fixed income varieties to ease allocation pressure.
It is not an isolated case where the decline in the investment income of insurance companies has dragged down the company’s performance. The annualized net investment yield of Ping An’s insurance fund investment portfolio in the first quarter was 3.3%, and the annualized total investment yield was 2.3%. In this regard, Ping An also gave a similar statement. In the first quarter of this year, as the Federal Reserve accelerated the process of raising interest rates and shrinking its balance sheet, and factors such as superimposed geopolitical conflicts further pushed up inflation expectations and risk aversion, the global capital market experienced large fluctuations, and the stock market overall. Market interest rates in major economies rose rapidly. The domestic economic and industrial structure adjustment continues to deepen, and due to the impact of the new crown pneumonia epidemic, the downward pressure on economic growth and the increase in the market risk premium, the market interest rate fluctuates in the range, and the credit spread has increased. Affected by a variety of factors, the investment income of the insurance fund investment portfolio was under pressure.
On April 29, New China Insurance released its first quarterly report for 2022. The report shows that in the first quarter, New China Insurance achieved a net profit of 1.344 billion yuan attributable to shareholders of the parent company, a year-on-year decrease of 78.7%; its operating income was 74.963 billion yuan, a year-on-year decrease of 7.9%. New China Insurance stated that under the circumstance of a high base of net profit in the same period of the previous year, the current period was affected by the downturn in the capital market and investment income decreased, resulting in a year-on-year decrease in net profit for the current period. As of the end of March, the investment assets of New China Insurance were 1,096.070 billion yuan, an increase of 1.2% over the end of the previous year. In the first quarter of this year, the annualized total investment yield of New China Insurance was 4.0%, a year-on-year decrease of 3.9 percentage points.
At the 2021 annual results conference at the end of March, Li Quan, president of New China Insurance, called “the pressure is huge” when asked about investment.
Li Quan said: “We are mentally prepared for this year’s situation, so we actively respond to investment and make some adjustments in major asset classes.” Li Quan said that although the beginning of the year encountered a very severe situation, But the future is generally optimistic. On the one hand, China’s overall economic situation is relatively good globally. On the other hand, it is better to encounter such problems at the beginning of the year than at the end of the year. “This will give us more Time to make some adjustments and further investment operations, and the current cash flow of insurance funds is still good.”
Low-valued blue-chip stocks are the key layout direction of insurance capital
According to statistics from Soochow Securities analyst Hu Xiang, the total investment yield of listed insurance companies in the first quarter fell by 2 percentage points year-on-year to 3.5%. Affected by the large fluctuations in the capital market and the rise of credit risk, the total year-on-year growth rate of investment income + fair value changes of listed insurance companies was -43.1% (the corresponding year-on-year growth rate in the first quarter of last year was +42.4%).
From the perspective of non-listed insurance companies, among the 153 insurance companies that released relevant indicators in the first quarter, about 65% of the companies had negative comprehensive investment returns.
For example, in the first quarter, Taikang Life’s investment yield was 0.45%, and the comprehensive investment yield was -1.63%.
However, from the perspective of insurance capital positions, the outlook for the capital market is not pessimistic. Flush data shows that as of the end of the first quarter of this year, a total of 232 insurance institutions and their products appeared in the list of the top ten tradable shareholders of 581 listed companies. From the perspective of changes in shareholding, insurance capital mainly increased its holdings of real estate stocks in the first quarter; financial stocks mainly in the banking industry are still the target of heavy positions for insurance capital.
Judging from the changes in the number of shares held by insurance capital, in the first quarter of this year, the listed company with the largest increase in insurance capital was China Chemical, with a total of 92.57 million shares held by two products under Taikang Life Insurance. Vanke A followed closely, with an additional 90.15 million shares held by “New China Life Insurance Co., Ltd. – Dividends – Personal Dividends”. BOE A and Jinke shares were increased by 89.77 million shares and 81.53 million shares respectively, ranking third and fourth.
From an industry perspective, in the first quarter, insurance capital increased its layout in the real estate industry. Among the top ten listed companies with increased shares held by insurance capital in the first quarter, Vanke A and Jinke Co., Ltd. both belong to the real estate industry. In addition, industries such as civil engineering and construction, computer, communication and other electronic equipment manufacturing, chemical raw material and chemical product manufacturing are also favored by insurance funds.
Chen Li, director of the Chuancai Securities Research Institute, said that insurance capital is affected by its own attributes, and safety is the first element of its investment consideration, which is higher than the demand for profitability. The overall investment style is cautious, so insurance capital prefers layout In industries with stable growth in performance, low-valued blue-chip stocks are the key direction of insurance capital layout.
Zhang Di, Assistant President and Chief Investment Officer of China Life, said earlier that our judgment on the long-term improvement of the long-term capital equity market and the value of long-term allocation has not changed. Below, the allocation value gradually emerges. Therefore, for long-term investment, the valuation angle has reached the condition of adding positions on the left.
Li Zhuyong, vice president of PICC, said frankly that since the beginning of 2022, major global capital markets have experienced relatively large fluctuations. The domestic economic development is facing the triple pressure of “shrinking demand, supply shock, and weakening expectations”. In such an internal and external environment, the domestic capital market was under great pressure in the first quarter. “Looking ahead, we believe that the equity market is at a bottoming stage in the short term, but the value of medium and long-term allocations has become prominent.”
Taikang Life said that in the first quarter, the uncertainty of the domestic and foreign macro environment increased significantly, the domestic and foreign capital markets fluctuated violently, and the company’s equity investment saw a certain withdrawal. In the short term, the company has accumulated historical floating profits, which can smooth the impact of short-term market fluctuations to a certain extent; in the long run, the healthy development of China’s economy will remain unchanged, and will adhere to the concept of long-term investment and value investment, continue to give full play to professional advantages, and improve long-term income levels.
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