Insurance companies have submitted their half-year "report cards", some have cried and some have laughed...
2024-08-14
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Peninsula Omnimedia reporter Wang Tianshu
Recently, with the disclosure of the second quarter reports of many insurance companies, the overall development "report card" of the insurance market in the first half of the year has officially emerged. The surrender rate of the insurance market continues to improve, and the comprehensive surrender rate of 42 insurance companies has declined, with the lowest being 0.13%. Bank-affiliated insurance companies performed well, with a total premium income of 284.8 billion yuan, an increase of about 16% year-on-year. In addition, the universal insurance settlement interest rate has been lowered several times this year. Relevant experts said in an interview that the reduction in the universal insurance settlement interest rate can significantly reduce the debt cost of insurance companies.
Whole life insurance becomes a "hot-selling item"
Some products require advance reservation
"I have never considered buying insurance before, and I even feel that I am still young and buying insurance is still a long way from me." Ms. Wang, a citizen who recently joined the "army" of insurance buyers, said that she had previously focused on investment methods such as bank deposits and financial management. Since 2023, deposit interest rates have been lowered several times. When consulting bank staff about investment methods, she learned about the way to buy insurance. "The annual basic insurance amount of the product I purchased has increased by 3.0% year by year, and the income is still considerable." Ms. Wang said. Most citizens said in interviews that buying insurance is a long-term behavior to seek protection. "I have bought insurance for my children for four or five consecutive years." Citizen Mr. Zhang said, "In addition, I also bought insurance for myself. The annual premiums for adults and children combined are less than 20,000 yuan. For me, buying insurance is buying a guarantee."
"Life insurance is one of the best-selling insurance products this year." A staff member of a state-owned bank located on Yanji Road in Shinan District told reporters that life insurance and other insurance products have become "hot-selling items" in the first half of the year. Under the guidance of the staff member, the reporter checked the mobile banking and found that the three most popular insurance products recommended by the bank were all life insurance, with the minimum investment thresholds of 10,000 yuan, 1,000 yuan, and 5,000 yuan respectively. According to the product details of one of the life insurance products, the annual basic insurance amount of this product has increased by 3.0% year by year since the second insurance policy year. The payment methods are divided into lump-sum payment, 3 years, 5 years, 10 years, 15 years, and 20 years, and the lump-sum premium for this type of insurance shall not be less than 10,000 yuan, and the annual premium shall not be less than 5,000 yuan. The bank staff said that the sales of life products are currently hot, "some products now have quota restrictions, and they can only be purchased after the quota is released, and reservations need to be made in advance."
The overall surrender rate of 42 insurance companies decreased
The comprehensive retirement insurance withdrawal rate of Dajia Pension reached 6.01%
Recently, insurance companies’ solvency reports for the second quarter of 2024 have been released one after another, and the surrender rate indicators have also been released.
According to media statistics, among the 61 non-listed life insurance companies that have published solvency reports, 60 have disclosed comprehensive surrender rate indicators. Among them, 26 insurance companies have a comprehensive surrender rate of less than 1%; 21 insurance companies have a comprehensive surrender rate between 1% and 2%. Compared with the same period in 2023, the surrender rate of insurance companies has dropped significantly. Among the 59 comparable life insurance companies, the comprehensive surrender rate of 42 insurance companies has decreased compared with the same period last year, accounting for more than 70%.
From the average point of view, the average comprehensive surrender rate of 60 insurance companies is 1.45%, which is 2.58% in the same period last year. Among them, the highest comprehensive surrender rate is Dajia Pension, which is 6.01%, and the lowest comprehensive surrender rate is Dingcheng Life, which is 0.13%.
At the end of the second quarter, the comprehensive surrender rate of Dajia Pension was 6.01%, an increase from 5.48% in the same period last year. In the second quarter, two of the top three products with the highest comprehensive surrender rate of Dajia Pension were universal insurance, namely Anbang Pension Zhenxiang Yi Nian Pension Annuity Insurance (Universal) and Anbang Pension Exclusive Ten-Year Group Annuity Insurance (Universal), with annual cumulative surrender rates of 26.66% and 7.17% respectively. In addition, Dajia Pension Dafuzhijia (Xingsheng Edition) Pension Annuity Insurance is an ordinary annuity product with an annual cumulative surrender rate of 2.12%.
In addition, the comprehensive surrender rate of Hongkang Life Insurance also remained high. In the second quarter, the comprehensive surrender rate of Hongkang Life Insurance was 4.12%, a further increase from 3.19% in the same period last year, which was significantly higher than the industry average. According to the report data, the top three surrender amounts of Hongkang Life Insurance are all investment-linked products, among which Hongkang Yuexiang Changying Whole Life Insurance (investment-linked) has a cumulative surrender amount of 2.107 billion yuan in 2024 and a cumulative surrender rate of 10.85%; Hongkang Win-Win Group Pension Annuity Insurance (investment-linked) has a cumulative surrender amount of 547 million yuan and a cumulative surrender rate of 45.66%.
China Post Life Insurance “Leads” Bank-affiliated Insurance Companies
CITIC Prudential and Everbright Sun Life suffered losses
From the "report card" of the five major A-share listed insurance companies in the first half of 2024, it can be seen that the overall liability side continues to grow positively. China Life, China Insurance, Ping An of China, China Pacific Insurance and New China Life Insurance achieved premium income (referring to original insurance premium income) of 489.6 billion yuan, 427.283 billion yuan, 481.268 billion yuan, 266.187 billion yuan and 98.832 billion yuan, respectively, with year-on-year growth rates of 4.1%, 3.3%, 4.7%, 2.4% and -8.4%, respectively. The growth rate of life insurance premiums is differentiated. Among them, the premium income of China Life, PICC Life Insurance and Ping An Life Insurance was 489.6 billion yuan, 79.056 billion yuan and 300.784 billion yuan, respectively, with year-on-year growth rates of 4.1%, 0.3% and 5.1%, respectively; China Pacific Life Insurance and New China Life Insurance achieved premium income of 153.159 billion yuan and 98.832 billion yuan, respectively, a year-on-year decrease of 1.2% and 8.4%, respectively.
As the second quarter solvency reports of 10 bank-affiliated insurance companies were released one after another, their first half performance was also announced. In the first half of the year, the performance of bank-affiliated insurance companies was differentiated, with China Post Life Insurance leading the premium income, while CITIC Prudential Life Insurance suffered a loss of more than 3.4 billion yuan.
In terms of premium data, in the first half of the year, the 10 bank-affiliated insurance companies achieved a total premium income of 284.8 billion yuan, a year-on-year increase of about 16%. China Post Life Insurance, ICBC-AXA Life Insurance, and CCB Life Insurance took the top three places in premium income, with premiums of 105.354 billion yuan, 30.754 billion yuan, and 27.508 billion yuan respectively.
Among the 10 bank-affiliated insurance companies, 7 companies including ABC Life Insurance maintained positive growth in premium income. Among them, ABC Life Insurance collected 26.682 billion yuan in premiums, a year-on-year increase of 39.9%; ING-BOE Life Insurance, Cigna Life Insurance, and BOC Samsung Life Insurance all saw year-on-year growth rates of more than 20%. In terms of premium growth, CITIC Prudential Life Insurance and Everbright Sun Life Insurance declined by 0.6% and 4.85% year-on-year, respectively.
In terms of net profit, in the first half of the year, bank-affiliated insurance companies achieved a total net profit of 5.05 billion yuan, a year-on-year increase of 280.49%. China Post Life Insurance achieved a net profit of 5.69 billion yuan in the first half of the year, a year-on-year increase of 297.5%, ranking first in the scale of profit among bank-affiliated insurance companies; Agricultural Bank of China Life Insurance and ICBC-AXA ranked second and third with net profits of 1.121 billion yuan and 788 million yuan respectively. Among them, Agricultural Bank of China Life Insurance's net profit in the first half of the year increased by 883% year-on-year, ranking first in terms of growth rate.
Against the backdrop of other companies' improving performance, CITIC Prudential Life Insurance and Everbright Sun Life Insurance suffered losses. As one of the earliest Sino-foreign joint venture life insurance companies approved for establishment, CITIC Prudential Life Insurance has long maintained a leading position in profit levels among "bank-based" insurance companies since its establishment. According to previous annual report data, in 2023, CITIC Prudential Life Insurance's net profit fell sharply by 188% year-on-year to -827 million yuan, turning from profit to loss. In the first half of the year, CITIC Prudential Life Insurance suffered a net loss of 3.441 billion yuan, which was significantly larger than the same period in 2023. In addition to the continued decline in net profit, the amount of surrenders of CITIC Prudential Life Insurance showed an upward trend. In the first half of the year, the annual cumulative surrender rate of "Zhi Shang Life Annuity Insurance C" reached 12.59%, and the cumulative surrender amount reached 4.13 billion yuan, an increase of 378% year-on-year compared with 864 million yuan in the same period in 2023. In addition, Everbright Sun Life Insurance lost 867 million yuan in the first half of the year. In the first quarter, Everbright Life Insurance suffered a loss of 624 million yuan. The loss narrowed in the second quarter, but it still resulted in a loss of 243 million yuan.
Qianhai Property & Casualty Insurance's solvency is not up to standard
Three Gorges Life Insurance and Peking University Founder are Class D
According to incomplete statistics, as of August 11, 144 insurance companies, including 62 life insurance companies, 72 property insurance companies, and 10 reinsurance companies, have disclosed their second quarter solvency reports. Among them, the comprehensive solvency adequacy ratio of 80 insurance companies has increased.
In the second quarter, a total of 11 insurance companies failed to meet solvency standards. Among them, there were 9 Class C insurance companies, including two life insurance companies, United Life Insurance and Huahui Life Insurance, and seven property insurance companies, including Huaan Property Insurance, Bohai Property Insurance, Xinjiang Qianhai United Property Insurance, Dubang Property Insurance, Everest Property Insurance, Anhua Agricultural Insurance, and Fude Property Insurance. There were 2 Class D insurance companies, namely Three Gorges Life Insurance and Peking University Founder Life Insurance. The main reasons for the above 11 insurance companies' failure to meet solvency standards are insufficient solvency adequacy ratios and problems with corporate governance.
The comprehensive risk rating of Peking University Founder Life Insurance and Three Gorges Life Insurance has been D for many consecutive quarters. Since the first quarter of 2023, the comprehensive risk rating of Peking University Founder Life Insurance has been D for many consecutive quarters. In the second quarter, the core and comprehensive solvency ratios of Peking University Founder Life Insurance were 71.74% and 124.72% respectively. Since the first quarter of 2023, the comprehensive risk rating of Three Gorges Life Insurance has been adjusted from C to D due to solvency pressure and major risks such as related strategies and capitalization. As of the second quarter, the core solvency ratio and comprehensive solvency ratio of Three Gorges Life Insurance were 149.09% and 161.39% respectively, which met the regulatory requirements, but the "liquidity coverage ratio LCR1 (next 3 months)" and "liquidity coverage ratio LCR3 (%) (next 3/12 months)" were both lower than the regulatory requirements. In this regard, Three Gorges Life Insurance said, "In order to maintain the healthy development of the company, while ensuring the return on total assets, it plans to allocate an appropriate amount of high-quality liquid assets, including cash, money market funds, short-term deposits, etc., to ensure that the proportion of liquid assets is not less than 5% of total assets."
In addition, Qianhai Property & Casualty Insurance has failed to meet solvency standards for nine consecutive quarters. In the first quarter of 2022, the company's comprehensive risk rating was downgraded from B to C. As of the first quarter of 2024, Qianhai Property & Casualty Insurance's comprehensive risk rating is still C. In addition, Qianhai Property & Casualty Insurance's comprehensive solvency is 106.1%, which is close to the regulatory red line.
Universal life insurance settlement interest rates have been lowered several times
Only 12 products have a settlement interest rate of 3.5%
Since 2024, the regulatory authorities have continued to require life insurance companies to lower the upper limit of universal insurance settlement interest rates to prevent interest rate spread risks. Since January, according to the requirements of the regulatory authorities, the universal insurance settlement interest rates of all insurance companies shall not exceed 4%; in March, the regulatory authorities again proposed that the upper limit of universal insurance settlement interest rates of some small and medium-sized insurance companies be lowered to 3.3%, and the upper limit of settlement interest rates of large insurance companies be further lowered to 3.1%.
Recently, many insurance companies have announced the universal insurance settlement rates for June. According to Wind data, as of July 19, among the 550 universal insurance products, there were 196 universal insurance products with a settlement rate higher than 3%, 174 with a settlement rate of 3%, and 180 with a settlement rate lower than 3%. In terms of the settlement rate range, 12 universal insurance products reached the highest settlement rate of 3.5%. Except for one universal insurance product with a settlement rate of 0.36%, the settlement rates of other universal insurance products were concentrated between 2.0% and 3.3%. The average settlement rate of 550 universal insurance products was 2.90%, a decrease of 71 basis points from the same period last year.
Regarding the reasons for the decline in universal life insurance settlement rates, Xu Yuchen, a founding member of the Chinese Actuarial Society, said in an interview with the media, "The decline in universal life insurance settlement rates is mainly affected by two factors. One is the investment income of the insurance company itself. In the past year, under the influence of various factors such as the decline in the yield of ten-year treasury bonds and large fluctuations in the equity market, the investment side of insurance companies has been under pressure, and the overall investment yield of insurance companies has declined; second, the regulatory authorities have guided insurance companies to reduce liability costs and guided the reduction of the upper limit of universal life insurance settlement rates, and insurance companies have actively responded to regulatory requirements." In addition, Xu Yuchen also said, "For insurance companies, the reduction in universal life insurance settlement rates has significantly reduced their liability costs; from the sales side, since the interest rates of other competing products such as bank products are also being reduced, for long-term and stable investors, universal life insurance still has a certain competitiveness among financial products."
