With the release of the annual report of China Taibao, the transcripts of the five listed insurance companies in A-share in 2020 are officially announced. According to the statistics of Beijing Business Daily on March 28, the total net profit of the five listed insurance companies in 2020 was 252.3 billion yuan, with an average daily profit of 689 million yuan, a year-on-year decrease of 7.37%. Although the net profit of listed insurance companies declined as a whole, the performance of the investment side was still good, and the investment income of some institutions even reached a growth rate of nearly 30%. Many listed insurance companies point out that grasping the opportunity of equity investment market is an important reason for the asset side to make contributions to net profit.
Equity investment increased by 10.03%
According to the statistics of Beijing business daily, the total net profit of the five A-share listed insurance companies in 2020 was 252.314 billion yuan, with an average daily profit of 689 million yuan, a year-on-year decrease of 7.37%. Among them, the net profit of some insurance companies even fell below 10%. For example, the net profit of PICC and CPIC fell by 10.41% and 11.38% respectively.
What are the reasons for the general decline of net profit? Many listed insurance companies attribute the change of their net profit to the change of tax policy.
Specifically, in the property insurance sector, the net profit of the three property insurance listed companies decreased to varying degrees. For example, the net profit of PICC Property Insurance was 20.834 billion yuan, a year-on-year decrease of 16.4%; the net profit of PICC Property Insurance was 5.209 billion yuan, a year-on-year decrease of 11.9%.
In the life insurance sector, the net profit growth of the five listed life insurance companies showed differentiation. For example, the net profit of PICC increased by 42.7% year-on-year; the net profit of taipo was 18.642 billion yuan, down 9.2% year-on-year; the net profit of other insurance companies also decreased year-on-year.
Although the net profit of the big five has declined, the return on the investment side is “brilliant”. Beijing Business Daily found that the total net investment income of listed insurance companies in 2020 was 481.656 billion yuan, a year-on-year increase of 10.03%; the total investment income increased by 14.2% to 585.634 billion yuan.
Take Ping An of China, which has the highest rate of return on investment, as an example. In 2020, the group’s net investment income rose from 144.05 billion yuan in 2019 to 163.462 billion yuan last year, with a year-on-year growth rate of 13.48%, ranking first among the five listed insurance companies in 2020. In terms of the growth rate of total investment income, Xinhua Insurance soared nearly 30% to 28.4%.
Beijing Business Daily reporter combed the asset allocation of various insurance companies and found that in 2020, all insurance companies especially favor equity assets. China Life Insurance pointed out in its annual report that its investment income rose by 27.7% year-on-year to 207.541 billion yuan, mainly due to the increase in investment income of equity assets.
Xinhua insurance, which has the fastest growth rate of investment income, also said that it will seize the structural opportunity in 2020 and increase the proportion of equity investment at the right time.
In recent years, Li Wenbiao, deputy director of China Capital University of economics and trade, has been able to take advantage of the structural changes in the stock market, which is mainly due to the better investment ability of China capital insurance company in 2020.
At the 2020 performance conference of China Life Insurance, Zhang Di, head of the investment management center of China Life Insurance, also expressed his view that the long-term good trend of China’s equity market will not change, and said that China Life Insurance will adopt strategies such as making investment arrangements around the center and exposure.
Health insurance becomes “black horse”
In the life insurance sector, the income of life insurance business of listed insurance companies shows a differentiation trend of “three decreases and two increases”.
Among them, Xinhua insurance took the lead in the growth rate of life insurance business, with a year-on-year growth rate of 15.5% to 159.511 billion yuan; China Life Insurance ranked the second, with a year-on-year growth rate of 7.6% to 480.593 billion yuan. On the other hand, the income of taipo life insurance and PICC Life Insurance decreased by 0.3% and 1.99% respectively.
Why does the income of life insurance business of the five listed insurance companies differentiate? Li Wenzhong believes that, novel coronavirus pneumonia, the first place, the impact of the new crown pneumonia epidemic, resulting in a number of insurance companies personal marketing channel business has dropped significantly. Secondly, it is also the result of the active adjustment of the business structure of various insurance companies.
Take China Taibao as an example. In 2020, its personal customer business dropped by 1.2% year-on-year to 2019.92 billion yuan. Among them, the new insurance business income of agent channel was 29.035 billion yuan, a year-on-year decrease of 26.7%; the renewal business income was 162.256 billion yuan, a year-on-year increase of 4.3%. Agent channels accounted for 90.3% of the total insurance revenue, down 1.5 percentage points year on year.
“For example, listed insurance companies such as China Taibao actively transform and adjust the proportion of individual marketing channel business. At the same time, the business growth of other business channels can not make up for the decline of individual marketing channel business.” Li Wenzhong commented on this.
On the other hand, Xinhua Insurance put forward the development mode of “asset liability two wheel drive, comprehensive development of scale value” in 2019. As a result, the effect will be obvious in 2020, with the rapid growth of bancassurance business and the obvious growth of life insurance business.
In the life insurance sector, in addition to the “pillar” life insurance, the “black horse” health insurance business launched in 2020 is particularly eye-catching. For example, the growth rate of PICC’s health insurance premium is far ahead, realizing the insurance business income of 32.257 billion yuan, a year-on-year increase of 43.9%, the premium income of Bancassurance channel has increased by 284.9%, and the premium of individual insurance channel has increased by 59.6%.
Li Wenzhong believes that the rapid growth of health insurance business should be the result of many factors.
“First of all, with the rapid development of population aging and the improvement of residents’ income level, people pay more and more attention to health risk management. Health insurance has been growing rapidly for many years, and 2020 is still the continuation of this high growth trend. Secondly, due to the impact of the epidemic, people generally received a vivid health risk management education, which stimulated the demand for health insurance. Thirdly, many local governments guide insurance companies to launch customized health insurance for the benefit of the people. The characteristics of loose insurance conditions, low premium and high insured amount attract many policy holders, and some listed insurance companies also participate in it. ” He explained this.
The Matthew effect of automobile insurance is significant
Property insurance companies have achieved good results in three aspects of property insurance premium. Among them, the income of property insurance “big brother” PICC Property insurance business was 433.187 billion yuan, which was basically the same as that of 433.175 billion yuan in 2019. During the same period, the insurance business income of Ping An Property Insurance and Taibao property insurance reached 285.854 billion yuan and 147.734 billion yuan respectively, up 5.51% and 11.1% year on year respectively.
In terms of insurance types, affected by macroeconomic pressure and epidemic situation, sales of new cars fell last year, combined with comprehensive reform of automobile insurance and other factors, resulting in fierce competition in automobile insurance market. In the face of such a situation, the head property insurance company offered “online” technology enabling “magic weapon” to deal with the “mountains” on the back of auto insurance.
For example, Ping’an Property Insurance Company said that it would further strengthen customer online services during the epidemic period. In 2020, more than 2.34 million customers have experienced the “one click claims” service of “Ping’an good car owner” app. In the future, the company plans to launch new energy vehicle insurance, UBI (usage based insurance) and other new vehicle insurance products to meet customer needs.
PICC also launched “zero contact” claim settlement service during the epidemic period, and through such loss reduction means as recovery, technology claim settlement, and integration of “driving, safety and distribution” reporting and supply, it hedged against such adverse factors as parts working hours and rising standards of human injury, so as to promote cost reduction and efficiency increase.
Some property insurance companies have also optimized their business structure. Taking PICC Property and casualty insurance as an example, PICC launched its family owned car business to improve the quality of auto insurance business. In the annual report, PICC Property and casualty insurance said that it would continue to optimize the risk pricing model of auto insurance, improve the precision pricing ability and continuously improve the operation efficiency. Taibao property insurance said that the renewal business of its auto insurance business has become the core driving force of growth.
Based on this, the growth rate of “old three” auto insurance business is higher than the industry average. Under the background that the year-on-year growth rate of overall premium dropped to 0.69%, in 2020, the auto insurance business income of PICC Property Insurance, Ping An Property Insurance and Taibao property insurance were 265.651 billion yuan, 1961.51 billion yuan and 95.67 billion yuan respectively, with year-on-year growth rates of 1%, 0.9% and 2.6% respectively; in addition, in 2020, the “old three” took nearly 70% of the premium income of the industry.
“It is expected that the premium and profit structure of the three property insurance companies will be further increased and optimized in the future.” In this regard, the famous economist song Qinghui also predicted.
However, compared with auto insurance, the trend of listed insurance companies in the property insurance sector is more obvious, and the proportion of the latter has increased significantly. In addition to the sharp decline in the business of SINOSURE, non auto insurance income, including short-term health insurance, accident insurance, freight insurance and agricultural insurance, has increased greatly, and is expected to become a new growth pole of property insurance premium.
Taking China Taibao as an example, in 2020, its non auto insurance business revenue increased by 29.9% year-on-year, accounting for 5.2 percentage points, reaching 35.9%. Among them, the original premium income of agricultural insurance was 9.442 billion yuan, up 39.3% year on year, and its market share increased rapidly.
Li Wenzhong said: “first of all, the rapid growth of short-term health insurance should have a great relationship with the development of health insurance for the benefit of the people in various places, and agricultural insurance has been maintaining a rapid development speed under the promotion of relevant national policies. Secondly, the comprehensive reform of auto insurance business led to a sharp drop in rates and further compression of profit margins. In this context, some insurance companies need to take the initiative to adjust their business structure and develop non auto insurance business, especially those with relatively good profit margin or high stability. Naturally, non auto insurance business is the focus of development. Accident insurance, freight insurance and agricultural insurance are good choices. “
Beijing Business Daily reporter Chen Tingting Zhou Hanyi
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