Oriental Securities: Under banking insurance adjustments, the scale of life insurance is under pressure and the main line of value growth continues

The Zhitong Finance App learned that Orient Securities released a research report saying that the growth rate of life insurance premiums declined markedly in July. The short term was mainly affected by the high base for the same period last year and bank insurance channel adjustments after the implementation of the No. 65 document. However, the increase in dividend insurance share, the maintenance of low scheduled interest rates, and channel fee regulations continued to drive down debt costs, and life insurance operations further focused on value growth. The growth rate of property insurance premiums has picked up, and short-term health insurance and liability insurance have contributed more. As the growth of car insurance stabilizes and the comprehensive management of non-car insurance continues to advance, the underwriting profitability of property insurance companies is expected to continue to increase. Currently, the core logic of the industry is still the reduction in life insurance debt costs, NBV growth, and property insurance underwriting profit improvement.

Orient Securities's main views are as follows:

Incident: The State Financial Supervisory Administration announced the operating conditions of insurance companies from January to July 2026

From January to July 2026, the insurance industry's premium income was 4,289 billion yuan, +1.9% year-on-year. Of these, personal insurance/property insurance premium income was 31,708/1,1182 billion yuan respectively, +1.8%/+2.3% year-on-year respectively, and overall scale growth was stable.

The monthly decline in life insurance widened markedly. High base figures and bank insurance channel policy adjustments together affected short-term sales

From January to July 2026, life insurance premium income was 2,637.5 billion yuan, +2.4% year on year; in July, life insurance premium income was 243.5 billion yuan, -15.6% year on year, a significant increase from the decline in June. Considering that the base for July to August 2025 is still high, it is expected that the short-term premium growth rate will still be under pressure, and the decline in debt costs and NBV growth will remain the core main lines of operation. By channel: 1) In terms of individual insurance, product discontinuation and switching in the same period last year formed a high base. Short-term premium growth is under pressure, but the dividend insurance transformation continues to advance, and the trend of improving debt costs continues. As the predetermined interest rate of traditional insurance continues to be lowered and the share of dividend insurance increases, product debt costs continue to decline; at the same time, listed insurers pay more attention to NBV and value ratios, and the growth of individual insurance business also depends more on agent capacity increase, product structure optimization, and renewal business accumulation. The high base mainly suppresses short-term new orders and premium scale performance. Increased share of dividend insurance and improved value ratio are still expected to support NBV growth. 2) In terms of banking insurance, Document No. 65 has been fully implemented since July 1, channel fee restrictions have been further strengthened, and the banking insurance business has entered an adjustment period after implementation of the policy. The new regulations further incorporate commissions paid to banks, banking insurance commissioner remuneration incentives, training and customer service fees, and shared fixed expenses into filing and execution management, and the room for cost savings and additional channel incentives was further narrowed; during the same period, the maximum interest rate limit for dividend insurance demonstration was lowered from 3.9% to 3.5%. The June product switch brought phased sales advance, and the banking insurance channel faced cost and product adjustments at the same time. Banking insurance sales are relatively sensitive to changes in channel incentives, and it is expected that the sales pace will still be affected to a certain extent in the early stages of policy implementation; in the medium term, declining channel fees will help reduce customer acquisition costs, increase business value rates, and further increase the importance of product competitiveness, customer operations, and network production capacity.

The monthly growth rate of property insurance rebounded. Non-car insurance contributed the main increase, and internal growth was further divided

From January to July 2026, property insurance premium income was 1,118.2 billion yuan, +2.3% year-on-year; monthly premium income in July was 133.6 billion yuan, +3.7% year-on-year, a further increase over June. By insurance type: 1) The monthly premium income for car insurance policies was 73.9 billion yuan, +0.1% over the same period last year, and the overall scale remained stable. In July, passenger car sales were -0.8% year-on-year, and sales of new energy vehicles were +23.7% year-on-year. Sales of traditional fuel vehicles were weak, and NEVs maintained relatively rapid growth. New car sales mainly affect the new car insurance business. Changes in car sales in a single month have a certain impact on overall car insurance premiums; the penetration rate of new energy vehicles continues to increase, which supports the scale of car insurance premiums. Against the backdrop of slow growth in car insurance premiums, the COR of listed insurers has gradually declined, and underwriting profitability has steadily increased. 2) The monthly premium income for non-car insurance policies was 59.7 billion yuan, +8.5% year-on-year, significantly higher than car insurance, and was the main source of the increase in property insurance premiums in July. Among them, the monthly premiums for short-term health insurance/liability insurance/agricultural insurance/short-term accident insurance were 129/115/ 139/4.9 billion yuan respectively, +25.2%/+10.6%/+4.5%/+2.1% year-on-year respectively. The recovery in non-auto insurance growth in July was mainly driven by short-term health insurance and liability insurance. In the context of continuous promotion of comprehensive management of non-car insurance, improvements in business quality are expected to continue to support underwriting profits.

Risk Alerts

The decline in long-term interest rates exceeded expectations; the equity market fluctuated sharply; the results of life insurance reforms fell short of expectations; the increase in the comprehensive cost ratio of financial insurance exceeded expectations; residents' income fell short of expectations; risk of changes in regulatory policies