The Zhitong Finance App learned that Cinda Securities released a research report saying that the major listed insurers' monthly life insurance premiums increased negatively year-on-year in September, mainly due to the completion of scheduled interest rate switching and adjustments at the end of July, the financial insurance sector's premium growth rate continued to diverge in September, and the overall cumulative premium growth rate slowed slightly. The bank believes that the overall performance for the first half of the year was good. The gradual launch of the 2024 marketing campaign is expected to rely on sufficient preparations in the early stages to achieve a good start, and Kickoff Premium Prepayment data is expected to exceed expectations. With the continuous introduction and implementation of current policies, we continue to be optimistic about the insurance sector, which is supported by fundamentals and is expected to recover on the asset side, in the early stages when the procyclical cycle is expected to start.

Incidents:Listed insurers released premium data from January to September 2023. Among them, the cumulative life insurance premium growth rate for the first 9 months was YoY (YoY +10.7%) > Taibao Shou (YoY +7.9%) > Ping An Life Insurance (YoY +7.7%) > China Life Insurance (YoY +4.5%) > Xinhua (YoY +3.7%); the year-on-year growth rate of financial insurance premiums for the first 9 months: Taibocai (YoY +11.8%) > Ping An Cai (YoY +7.5%).

Cinda Securities reviews are as follows:

Life insurance premiums dropped in a single month in September, but a good start can be expected in 2024.

In September 2023, the life insurance premiums of major listed insurers declined. In September, the monthly premium growth rate: Ping An Life Insurance (YoY -4.1%) > Life Insurance (YoY -4.6%) > Taibao Shou (YoY -5.5%) > China Life Insurance (YoY -7.2%) > Xinhua (YoY -9.9%); Cumulative Premium Growth Rate for January-September: Life Insurance (YoY +10.7%) > Taibao Life Insurance (YoY +7.9%) > Ping An Life Insurance (YoY +7.7%) > Ping An Life Insurance (YoY +7.7%) > National Life Insurance (YoY) +4.5% Xinhua (YoY +3.7%).

Overall, the major listed insurers' monthly life insurance premiums increased negatively year-on-year in September, mainly due to the completion of scheduled interest rate switching adjustments at the end of July, August and September were still in a period of preparation for a good start and solid manpower, and August and September were traditional low sales seasons (a transition period between half-year results and good start activities), and the premium share was limited throughout the year. Therefore, the bank believes that the overall impact of the slight drop in monthly premiums in August and September is limited. Major insurers are expected to gradually launch marketing activities in 2024 in the fourth quarter.

The growth rate of financial insurance premiums continued to diverge in September, and the overall growth rate of cumulative premiums slowed slightly.

The premium growth rate of the industrial insurance business of listed insurers in September 2023 was somewhat differentiated. Taibocai and People's Insurance continued to maintain positive year-on-year growth in September. Ping An's monthly premiums declined slightly year-on-year for 3 consecutive months, and the cumulative premium growth rate for January-September all slowed down year-on-year. In terms of monthly premiums for September: Taibocai (YoY +11.2%) > People's Insurance (YoY +6.1%) > Ping An Cai (YoY -4.1%). The financial insurance business of major listed insurers maintained a steady growth trend in January-September: Taibocai (YoY +11.8%) > People Insurance (YoY +7.5%) > Ping An Cai (YoY +1.8%).

Looking at the annual dimension, taking into account the premium growth rate and business pace for half a year, the bank expects Taibao Cai to achieve positive double-digit year-on-year growth in 2023, positive single-digit year-on-year growth, and the overall boom performance is expected to be maintained throughout the year, laying the foundation for underwriting profits.

1) Judging from the segmented premiums of personal insurance insurance: in the first 9 months of 2023, car insurance and non-car insurance premium income accounted for 50% and 50%, respectively, and the premium structure was relatively balanced. Among them, car insurance premiums were +5.5%, and non-car insurance premiums were +9.6%; total premiums continued to grow rapidly (yoy +7.5%), and the growth rate of non-car insurance premiums was still higher than the growth rate of car insurance premiums. In September, monthly car insurance and non-car insurance were +6.8% and +5.1%, respectively, and overall financial insurance premiums were +6.1%. The growth rate of car insurance premiums continued to improve in September. Retail sales in the passenger car market reached 20180,000 units in September 2023, up 5.0% year on year and 5.0% month on month. There are frequent policy guidelines for the automobile industry at the national level, aimed at further stabilizing and expanding automobile consumption. The bank believes that in this context, car insurance premiums are expected to maintain a relatively stable year-on-year growth rate.

It is estimated that in 2023, personal insurance premiums are expected to achieve a positive increase of 5%-10%. Among them, auto insurance premiums are expected to increase by about 5%, non-car insurance premiums are expected to increase by about 10%, and the overall premium structure is expected to be more balanced.

2) Looking at non-car insurance segments, liability insurance, cargo insurance, and other types of insurance types grew rapidly in a single month's premiums in September. They all achieved a positive increase of more than 15% in a single month, and the credit guarantee insurance business declined in September (yoy -35.7%). The bank believes that the decline in monthly premiums for credit guarantee insurance is mainly related to factors such as the company's active adjustment of business pace and business structure, and the divestment of loss-making businesses.

Investment Ratings:

The bank believes that at present, the insurance debt side continues to show positive signs of steady recovery, and that core indicators such as channel manpower, new insurance premiums, and new business value are expected to continue to pick up. Currently, with the two major characteristics of “savings” and “protection”, there is still room for savings and security products to continue to gain strength simultaneously. The overall performance for the first half of 2023 was good. The gradual launch of the 2024 marketing campaign is expected to rely on sufficient preparations in the early stages to achieve a good start, and Kickoff Premium Prepayment data is expected to exceed expectations.

With the continuous introduction and implementation of current policies, the bank continues to be optimistic about the insurance sector, which has fundamental support and is expected to recover on the asset side, in the early stages when the procyclical cycle is expected to start. Recently, the insurance sector has shown good resilience, and sector valuations are still at a low level in recent years. The bank is still optimistic about the sector's phased market situation and long-term allocation value brought about by the gradual recovery in industry fundamentals. It is recommended to focus on China Taibao (601601.SH), China Life Insurance (601628.SH), and China Financial Insurance (02328), and China Insurance (02328), and China Ping An () and Xinhua Insurance (). 601318.SH 601336.SH

Risk Factors:The reform of insurers fell short of expectations, the increase in the number of high-quality agents fell short of expectations, the launch of activities fell short of expectations, and there were many natural disasters that exceeded expectations