According to the Securities Times APP, Guolian Securities released a research report stating that looking at the sales environment opening in 2025, there are bullish factors on both the supply and demand sides. On the demand side, in a context where residents' risk preferences remain low, savings-type insurance products, with their redeemability, will still be favored by customers. On the supply side, with the continuous reduction in deposit interest rates, the increment life insurance with a scheduled interest rate of 2.5% and the dividend insurance with a scheduled interest rate of 2.0% still possess certain competitive advantages. Moreover, the continuous improvement of agent productivity is expected to provide strong support for new sales. At the same time, as regulations continue to guide the industry in lowering scheduled interest rates and optimizing business structures, the NBV Margin of each life insurance company is expected to further improve, thereby supporting positive growth in NBV.

Why is the opening sales season so important?

Historically, premiums for life insurance companies in January and Q1 are mainly contributed by the opening sales season. Between 2015 and 2023, the premiums in January and Q1 for major life insurance companies accounted for over 1/5 and over 1/3 of the annual total, respectively. From the perspective of NBV share, the Q1 NBV as a percentage of the annual total for Ping An Life Insurance and China Pacific Life Insurance in 2023 was also around 1/3 each. Therefore, if insurance companies can perform well during the opening sales season, the probability of achieving annual performance targets is likely to increase. Additionally, to boost the motivation of agents, insurance companies tend to allocate relatively more expenses during the opening sales season. From 2013 to 2022, the proportion of Q1 commission and fee expenses of various listed insurers accounted for about 1/3 of the annual total.

What are the differences in the 2025 opening sales season?

In terms of underwriting methods, under the continued guidance and regulation by authorities, the underwriting method of life insurance companies during the 2025 opening sales season is expected to shift from "prepayment" to "pre-recording." Premiums for policies "pre-recorded" during the opening sales season are expected to be collected uniformly on January 1 of the following year. While the main products for life insurance companies during the opening sales season are still annuity insurance, whole life insurance, and increment life insurance, the product form is expected to transition from traditional types to mainly dividend-based types in order to reduce debt costs and alleviate potential interest rate risks.

Investment recommendation: Maintain the insurance industry's 'outperform market' rating.

Looking ahead, as regulation continues to guide the industry to reduce debt costs, the NBV Margin of each insurance company is expected to significantly improve, thereby driving the NBV to achieve positive growth. From a valuation perspective, the current valuation of the insurance sector is still at a historically low level, with potential for further recovery. Key stock recommendations include China Pacific Insurance (601601.SH) with leading performance on the liability side and relatively superior fundamentals, China Life Insurance (601628.SH) with a more stable liability side, Ping An Insurance (601318.SH) with a clear improvement in agent quality, New China Life Insurance (601336.SH) with a more noticeable increase in new business value rate, and the People's Insurance (601319.SH).

Risk Warning: Economic recovery falls short of expectations; increased volatility in capital markets; shift in regulatory policies.