China Merchants Securities: The decline in personal insurance premiums has narrowed, and the growth rate of car insurance has picked up
The Zhitong Finance App learned that China Merchants Securities released a research report saying that although the decline in premiums for personal insurance companies slowed down in January-June, medium- to long-term savings demand is still strong; property insurance companies' premium growth rate is stable, and car insurance is returning to positive growth. Recently, the Insurance Industry Association announced that the latest research value of the personal insurance reservation interest rate is 1.94%, which has rebounded for two consecutive quarters. The scheduled interest rate for personal insurance products is expected to remain stable during the year, and residents' demand for wealth allocation is expected to support long-term growth on the debt side. Currently, valuations and positions in the insurance sector are low, maintaining the industry's recommended rating.
The main views of China Merchants Securities are as follows:
Personal insurance companies: The decline in premiums has slowed down, and demand for medium- to long-term savings is still strong
From January to June, the cumulative premium income of personal insurance companies was 2871.6 billion yuan, +3.6% year-on-year (previous value +5.0%), and the growth rate slowed month by month. Looking at a single month, the premium income of personal insurance companies in June was 478.8 billion yuan, -2.5% (previous value 3.0%), and the decline narrowed slightly; of these, life insurance premium income was 405.2 billion yuan, -2.1% year over year, which is the main support for industry premiums; health insurance premium revenue was 70.6 billion yuan, -3.9% year on year, and accident insurance premium income was 3 billion yuan, -8.9% year on year. The bank expects that due to the high base in the same period last year and the implementation of the new “integration of reporting and banking” regulations for banking insurance channels, the short-term industry's premium growth rate for new policies may still be under pressure, but the trend of moving long-term deposits is expected to continue, and the industry's growth momentum has not been weakened.
Property insurance companies: The premium growth rate is stable, and car insurance is recovering and growing
The cumulative premium income of property insurance companies in January-June was 984.6 billion yuan, +2.1% year-on-year (previous value +2.2%), continuing to grow at a slow pace. Looking at a single month, property insurance companies' premium income in June was 186.7 billion yuan, +1.5% (previous value +2.3%); of these, car insurance premium income was 79.3 billion yuan, +1.0% year over year (previous value +0.0%). The growth rate rebounded month-on-month, mainly benefiting from the recovery in automobile sales. In particular, new energy vehicles were the main driving force for growth. According to data from the China Association of Automobile Manufacturers, in June, China's automobile production and sales were -1.2% and -3.2%, respectively, and production and sales of new energy vehicles were +26.0% and +23.6%, respectively. Non-car insurance premium revenue in June was $107.4 billion, +1.9% year-on-year (previous value +5.3%). Health insurance, liability insurance, and accident insurance were the main growth items, with a month-on-month increase of +20.7%/+5.4%/+5.2%. The full implementation of the “integrated reporting” of non-auto insurance in the second half of the year is expected to bring about an institutional pressure drop on the cost side, but we need to focus on how the disaster disrupted COR.
Industry as a whole: premium growth is slowing month by month, and asset performance continues to be steady
The cumulative premium income of the insurance industry in January-June was 3856.2 billion, +3.2% (previous value +4.3%), and the growth rate continued to slow; of these, monthly premium income in June was 6655.5 billion yuan, -1.4% YoY (previous value -1.5%). As of the end of June, the total assets of the insurance industry were 438.57.3 billion, +6.2% compared to the beginning of the year; net assets were 4070.3 billion yuan, +11.1% compared to the beginning of the year.
Risk warning: Economic growth falls short of expectations; regulations are being tightened; product attractiveness is declining; capital market fluctuations; interest rates are declining; and the frequency of disasters is rising.