Falling Interest Rates Force Insurers to Adapt(AI Translation)
Listen to the full version
文｜财新周刊 吴雨俭
By Caixin Weekly's Wu Yujian
2024年上市险企半年报如期公布。部分保险公司业绩亮眼：比如太平人寿总经理程永红在业绩会上表示，今年上半年，中国太平（00966.HK）的业绩表现为近年来同期最好，集团总资产、营业收入、保险服务收入等规模指标统一实现较快增长；该公司报告期内的新业务价值同比增长了83.6%。近几年逐渐倚重银保渠道的新华保险（601336.SH/01336.HK），在产品结构和渠道保费调整后，实现了新业务价值57.5%的大幅增长。
The mid-year reports of listed insurance companies for 2024 were published as scheduled. Some insurers delivered impressive performances: for instance, Cheng Yonghong, General Manager of Taiping Life Insurance, stated at the performance briefing that China Taiping (00966.HK) had its best mid-year performance in recent years. Key metrics such as total assets, operating income, and insurance service income all saw rapid growth. The company's new business value during the reporting period surged by 83.6% year-on-year. New China Life Insurance (601336.SH/01336.HK), which has increasingly relied on bank insurance channels in recent years, achieved a significant 57.5% growth in new business value after adjustments in product structure and channel premiums.
包括中国太平、新华保险和中国太保（601601.SH/02601.HK）等新业务价值增长明显的上市险企，在财报发布的第二天，股价涨势喜人。其中，中国太平在8月28日的股价冲高至9.82港元/股，大幅飙升14.19%，随后两日股价仍继续飘红；新华保险和中国太保在8月30日的股价也涨超5%，其中新华保险在港股的盘中股价最高冲至17.66港元，最高涨幅达12.06%，在A股的收盘价则接近涨停，上涨了9.69%。
On the day following the release of their financial reports, listed insurance companies with notable new business value growth, including China Taiping, New China Life Insurance, and China Pacific Insurance (601601.SH/02601.HK), saw a significant rise in their stock prices. On August 28, the stock price of China Taiping surged to HK$9.82 per share, marking a substantial increase of 14.19%, and continued to rise over the next two days. On August 30, the stock prices of New China Life Insurance and China Pacific Insurance also increased by over 5%. New China Life Insurance's intraday stock price on the Hong Kong Stock Exchange soared to HK$17.66, a peak increase of 12.06%, while its closing price on the A-shares market was close to the daily limit, rising by 9.69%.
从寿险业务来看，虽然上半年大部分险企的新单保费都有所下滑、多靠存量续期保费“压箱底”，才能勉力维持保费增速的正增长，但新业务价值和新业务价值率两项体现寿险公司“利润储水池”的核心指标均出现两位数的同比增长。在投资收益的带动下，上市险企的净利润表现也实现了稳步提升。
From the perspective of life insurance business, although new policy premiums for most insurance companies declined during the first half of the year and they relied heavily on renewal premiums from existing policies to barely maintain positive growth in premium income, both new business value and new business value rate, the key indicators reflecting the "profit reservoir" of life insurance companies, experienced double-digit year-on-year growth. Bolstered by investment returns, the net profit performance of listed insurance companies also saw a steady improvement.
- DIGEST HUB
Digest Hub
Back
- Listed insurance companies saw strong mid-year performance in 2024, with China Taiping's new business value surging 83.6% year-on-year, and New China Life Insurance growing by 57.5%.
- Stock prices of top-performing insurers, including China Taiping and New China Life, rose significantly post-report; China Taiping surged 14.19% to HK$9.82.
- Investment returns remained high, averaging 6.91%, mainly driven by bond investments, while life insurance companies achieved strong new business value growth.
The mid-year reports of listed insurance companies for 2024 have been published, revealing impressive performances for some insurers. Cheng Yonghong, General Manager of Taiping Life Insurance, announced at a performance briefing that China Taiping (00966.HK) saw the best mid-year performance in recent years, with new business value surging by 83.6% year-on-year. New China Life Insurance (601336.SH/01336.HK) also experienced significant growth in new business value, achieving a 57.5% increase after making adjustments in product structure and channel premiums [para. 1].
The positive financial reports led to significant rises in stock prices for companies like China Taiping, New China Life Insurance, and China Pacific Insurance (601601.SH/02601.HK). On August 28, China Taiping's stock price surged 14.19% to HK$9.82 per share and continued to rise for the next two days. On August 30, stock prices for New China Life Insurance and China Pacific Insurance also increased by over 5%, with New China Life Insurance's stock climbing to HK$17.66 on the Hong Kong Stock Exchange [para. 2].
Despite a decline in new policy premiums for most insurance companies, key indicators such as new business value and new business value rate saw double-digit year-on-year growth, largely driven by investment returns. For instance, China Taiping's premium income rose by 4.3% to HKD 120.186 billion, with new business value increasing by 83.6% to HKD 6.694 billion and the new business value rate standing at 24.6%, up by 12.4 percentage points [para. 3].
Analysts attribute this growth to lowered assumed interest rates and the implementation of regulations mandating strict adherence to fee caps in bancassurance channels, which lowered costs on the liabilities side. Industry-wide, overall investment returns were high at 6.91%, buoyed largely by floating gains from bonds investments [para. 4].
The property insurance sector remained steady during the reporting period, with changes in auto insurance drawing particular attention. Yu Ze, Vice President of PICC, noted that the comprehensive cost ratio for new energy household cars fell below 100%, indicating lower incident rates as drivers become more proficient [para. 11].
China's life insurance market saw widespread increases in new business value in the first half of 2024, largely due to a reduction in the assumed interest rate and streamlined reporting policies. Companies like Taiping Life Insurance and Sunshine Insurance emphasized a focus on new business value over premium income, adapting strategies to optimize value and profit rather than volume [para. 15].
Furthermore, regulatory changes are expected to further reduce liability costs, with new upper limits on predetermined interest rates for life insurance products effective from September 1, 2024 [para. 21]. In the context of these changes, dividend insurance has gained popularity due to its dual benefits of guaranteed returns and lower interest rate risk. However, the product structure adjustments didn't significantly optimize premium growth rates, which remain higher for traditional life insurance compared to dividend insurance [para. 22].
Investment returns for listed insurance companies were generally strong in the first half of 2024, with companies like Sunshine Insurance and New China Life Insurance achieving return rates of 7.2% and 6.5%, respectively. Equity investments also saw remarkable results, as demonstrated by China Taiping's comprehensive stock investment return rate of 15.6% [para. 28].
The net investment yield showed a general decline, likely due to the stability of bond allocations and the reclassification of bond assets from Hold to Maturity (HTM) to Available for Sale (AFS) categories, which reflect current market values and aid in overall portfolio stability [para. 39].
In summary, the first half of 2024 has been positive for many listed insurance companies, driven by strategic adjustments, regulatory compliance, and strong investment returns. Companies are focusing on optimizing product structures, particularly with an emphasis on dividend insurance, while continuing to navigate the evolving economic landscape [para. 88].
- Taiping Life Insurance
太平人寿 - Taiping Life Insurance saw remarkable growth in 2024: its new business value increased by 83.6% year-on-year, and its new business value rate improved by 12.4 percentage points to 24.6%. The insurer's diverse channels, particularly bancassurance, helped achieve a significant rise in new business value, contributing 42% of the total.
- China Taiping
中国太平 - China Taiping's mid-2024 performance has been stellar, with a 4.3% year-on-year increase in premium income to HK$1201.86 billion and a 15.4% rise in shareholder profits to HK$60.27 billion. New business value grew by 83.6%, with a 12.4 percentage point rise in the new business value rate to 24.6%. The company's stock price surged over 14% following the financial report release.
- New China Insurance
新华保险 - New China Insurance (601336.SH/01336.HK) saw a 57.5% increase in new business value in the first half of 2024 due to adjustments in product structure and premium channels. On August 30, its stock price rose over 5%, reaching a peak of HKD 17.66 in the Hong Kong market and nearly hitting the daily limit in the A-shares market, up by 9.69%.
- China Pacific Insurance
中国太保 - China Pacific Insurance (601601.SH/02601.HK) reported significant growth in new business value, up 23% year-on-year. Its stock price increased by over 5% after the earnings release on August 30. The company's comprehensive investment yield for the first half of 2024 was 6.0%, a 1.8 percentage point increase. The company focuses on optimizing product structure and enhancing investment strategies, particularly in long-term equity investments and high-rated credit bonds.
- PICC (People's Insurance Company of China)
中国人保 - PICC reported stable performance in H1 2024. PICC P&C's new energy vehicle insurance comprehensive cost ratio fell below 100%, indicating improving profitability in this segment. However, overall net profit decreased due to lower underwriting profits in health, liability, and corporate property insurance. Despite a slower growth rate compared to the industry average, they anticipate a recovery in H2 2024 with policy-driven business increasing.
- Sunshine Insurance
阳光保险 - Sunshine Insurance's gross premiums grew over 10% in H1 2024, while its new business value increased by 40%. Investments yielded a 7.2% comprehensive return, up 2.3 points YoY. Although their net investment return rose to 3.8%, profits from auto insurance dropped sharply by 78%, and non-auto lines like liability and cargo insurance also saw increased underwriting losses.
- AIA Group Limited
友邦保险 - The article does not provide specific information about AIA Group Limited. It focuses on the performance and key metrics of various Chinese insurance companies such as China Taiping, New China Life, China Pacific Insurance, and others for the first half of 2024.
- China Life Insurance
中国人寿 - In the first half of 2024, China Life Insurance (601628.SH/02628.HK) saw a 19% year-on-year increase in new business value. Despite a slowdown in premium growth, with a 5% increase in premium revenue, the company maintained a steady performance with a focus on sustainable value creation.
- Ping An Insurance
中国平安 - Ping An Insurance (601318.SH/02318.HK) reported a 5% growth in its life and health insurance business for the first half of 2024. However, its net investment yield was around 3%, showing a decline. Ping An plans to shift its product focus, with over 50% projected to be from dividend-paying insurance products in the future.
- ZhongAn Online P&C Insurance
众安在线 - ZhongAn Online P&C Insurance (06060.HK) experienced a decline in underwriting profits in the first half of 2024, primarily due to an increase in indemnities related to credit and guarantee insurance, which negatively impacted their net profit.
- Mid-2023：
- The regulations enforcing the 'unification of reporting and action' in bancassurance channels were implemented by supervisory authorities.
- First half of 2024：
- China Taiping's premium income rose by 4.3% year-on-year to HKD 120.186 billion, and the profit attributable to shareholders increased by 15.4% year-on-year to HKD 6.027 billion.
- First half of 2024：
- Overall investment returns for both listed and non-listed insurance companies were high, with the industry average reaching 6.91%.
- First half of 2024：
- PICC's comprehensive cost ratio for new energy household cars fell below 100%.
- First half of 2024：
- The new business value of various listed insurance companies saw widespread increases, with key growth rates for China People's Insurance (PICC) Life Insurance at 91% and China Taiping at 84%, among others.
- August 2, 2024：
- The National Financial Regulatory Administration issued the 'Notice on Improving the Pricing Mechanism of Life Insurance Products.'
- August 28, 2024：
- The stock price of China Taiping surged to HK$9.82 per share, increasing by 14.19%.
- August 30, 2024：
- The stock prices of New China Life Insurance and China Pacific Insurance increased by over 5%.
- PODCAST
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新