Finance Associated Press, August 16th (Reporter Wang Hong) According to statistics, five A-share listed insurance companies including Ping An Insurance, China Life Insurance, China People's Insurance, China Pacific Insurance (CPIC), and New China Life Insurance had a total premium income of 1.95 trillion yuan in the first 7 months of this year, a year-on-year increase of 3.49%. In terms of business, the premium growth rate of the three companies’ property insurance businesses is above 4%, and the premium growth rate of life insurance business has presented three positives and two negatives, which is mainly related to the company's active optimization of business structure.

With the continuous growth of premiums, the balance of insurance fund utilization is also growing, bringing sustained long-term capital to the market. This year, insurance capital has already triggered a wave of stock lifting, and has already lifted 11 listed companies this year. Institutional analysts pointed out that as of June this year, insurance companies hold a total of 3.78 trillion yuan in stocks and funds, reaching the highest level in history, and the allocation ratio has also rebounded to 12.25%. In addition, with the promulgation of new regulations on insurance reserved interest rates, analysts also predict that the demand for savings insurance before the old products cease to be sold will usher in concentrated release, further boosting the growth rate of new single premiums.

The five listed insurance companies collected premiums of 1.95 trillion yuan, and the premium growth rate of life insurance business appeared to be divided.

As of now, Ping An Insurance, China Life Insurance, China People's Insurance, China Pacific Insurance (CPIC), and New China Life Insurance, the five A-share listed insurance companies, have released their premium income in the first seven months. The data shows that the total premium income of the five insurance companies from January to July 2024 was 1.95 trillion yuan, a year-on-year increase of 3.49%.

Among them, the premium income of China Pacific Insurance (CPIC), China People's Insurance, China Life Insurance, Ping An Insurance, and New China Life Insurance in the first seven months of this year was 29.8247 billion yuan, 46.8045 billion yuan, 523.5 billion yuan, 550.866 billion yuan, and 111.875 billion yuan respectively, a year-on-year increase of 1.5%, 3.9%, 4.39%, 5.66%, and -6.43%, respectively.

In terms of business, the premium income of the three companies' property insurance is generally increasing, with growth rates above 4%. CPIC, China People's Insurance, and Ping An Property Insurance had premium income of 12.765 billion yuan, 34.4776 billion yuan, and 18.5359 billion yuan respectively in the first seven months of this year, with a year-on-year growth rate of 7.5%, 4%, and 4.4%, respectively.

The performance of the personal insurance business shows a division and the growth rate of premiums presents a three-positive and two-negative situation. Among them, the premium income of China Life Insurance, Ping An Life Insurance, and China People's Life Insurance in the first seven months of this year was 523.5 billion yuan, 342.803 billion yuan, and 84.532 billion yuan, respectively, a year-on-year increase of 4.4%, 6.4%, and 1.5%; while the premium income of CPIC Life Insurance and New China Life Insurance in the first seven months of this year were 170.597 billion yuan and 111.875 billion yuan, respectively, a year-on-year decrease of 2.6% and 6.43%.

It is worth noting that in the first six months of this year, the premium growth rates of CPIC Life Insurance and New China Life Insurance were also negative, down 1.2% and 8.36% year-on-year, respectively. Gao Chao, an analyst in the non-bank sector of Kaiyuan Securities, believes that the reason for the year-on-year decline in premium income of CPIC Life Insurance and New China Life Insurance is mainly due to the company's active optimization of business structure.

"Insurance companies actively adjust their product structure, reduce the sales of bank-insurance channel lump sum payment products with high fees and low value, and instead promote the sales of long-term period payment and value-based products. This may lead to a temporary decline in premium income growth rate, but it is conducive to improving business value and sustainable development momentum," said industry insiders. New China Life Insurance also stated today that the company's business structure continues to be optimized, the premium payment period of 10 years or more is steadily increasing, and the new business value is rapidly increasing. The development of excellent human resources is good, and the high-quality development momentum of the company is further enhanced.

Expansion of insurance scale brings long-term capital to the market.

It can be seen that the premium income of insurance companies is continuously increasing. As of the end of June 2024, the balance of insurance fund utilization has reached 30.87 trillion yuan, a year-on-year increase of 10.98%. China Merchants Securities Research pointed out that the continuous expansion of insurance scale has brought sustained long-term capital to the market.

According to the data from China Merchants Securities Research, as of June 2024, insurance companies hold a total of 3.78 trillion yuan in stocks and funds, reaching the highest level in history, and the allocation ratio has also rebounded to 12.25%. "Since the beginning of this year, the yield of fixed-income products has dropped rapidly, and it is impossible to cover insurance products with a reserved interest rate of 3% on the liability side of insurance companies. In addition, under the new accounting standards, the value fluctuations of assets included in FVOCI are not included in the profit and loss statement, which has increased the driver for insurance funds to allocate equity assets, especially high-dividend assets."

It has been noticed by Cailian Press that the insurance companies have started a wave of shareholding since this year, with 11 listed companies being targeted by them involving transportation, eco-friendly sector, public utilities, power equipment, and banks. Xu Kang, chief analyst of Huachuang Securities, said that the market is facing the third wave of insurance shareholding after those waves in 2015 and 2020.

"Due to the downward trend of interest rates on government bonds, the investment income of non-banking financial institutions is expected to improve significantly compared with the same period last year. Non-banking institutions, including insurance and brokerage firms, are expected to report net income higher than market expectations," said Guojun Non-Bank, recommending that investors should focus on increasing their shareholding in insurance and brokerage firms that are expected to exceed market expectations in their mid-term reports. The valuation and allocation of the non-banking sector is still at a historical low, and it is recommended to increase the allocation of individual stocks that are expected to outperform in their mid-term reports.

It is worth noting that in August, regulatory authorities issued a notice to lower the reservation interest rate for new registered insurance products, establish a mechanism for linking reservation interest rates with market interest rates and dynamically adjust them. From September 1st, the maximum reservation interest rate for ordinary insurance products is 2.5%; from October 1st, the maximum reservation interest rate for dividend insurance is 2.0%, and the minimum guaranteed interest rate for universal insurance is 1.5%, marking the beginning of the "2" era for reservation interest rates of insurance products.

"Zhao Ran team of China Securities Co., Ltd. believes that in the short term, the new regulations are expected to stimulate a concentrated release of demand for savings insurance from the residents before the old products are discontinued, further boosting the growth rate of new premium income. After the old products are officially discontinued, the advanced overdrawing of some demand may lead to a certain decline in the growth rate of new premium income, but the new business value rate may improve as a result of the downward adjustment of the reservation interest rate. In the long run, the downward adjustment of the reservation interest rate is conducive to reducing the rigid liability costs of life insurance companies, and is conducive to preventing and resolving the risk of interest spread and ensuring the stable and long-term development of the industry.

"From the perspective of protection, compared with savings, funds, and stocks, insurance still has a market that can meet the needs of segmented population. In addition, retirement and medical care are still hotspots of market demand for protection, and insurance companies also need to innovate products to meet market demand," said Yang Zeyun, a teacher at Beijing Union University.