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as of august 29, the 2024 mid-term "report cards" of the five major a-share listed insurance companies, ping an of china, china life, china insurance, china pacific insurance, and new china life, have all been released. basically consistent with previous industry expectations, the performance of the five giants has shown a clear recovery trend. specifically, in the first half of 2024, the net profit attributable to the parent company's shareholders of the five insurance companies totaled 171.799 billion yuan, an increase of about 12.55% year-on-year. the average daily profit was about 944 million yuan, compared with 741 million yuan in the same period last year.

behind the collective recovery of the industry, what are the hard strengths of each company? what plans do they have for the future?

total net profit growth rate exceeded 10%

beijing business daily reporters found that the net profit attributable to parent company shareholders of the five major a-share listed insurance companies in the first half of 2024 totaled 171.799 billion yuan, an increase of approximately 12.55% year-on-year.

specifically, ping an of china ranked first among the five listed insurance companies in terms of total net profit in the first half of the year, reaching 74.619 billion yuan, a year-on-year increase of 6.8%. china pacific insurance led the growth in net profit, with a net profit of 25.132 billion yuan in the first half of the year, a year-on-year increase of 37.1%. the net profits attributable to the parent companies of china life, china insurance and new china life were 38.278 billion yuan, 22.687 billion yuan and 11.083 billion yuan, respectively, a year-on-year increase of 10.6%, 14.1% and 11.1%, respectively.

in the first half of the year, affected by multiple factors at home and abroad, capital market volatility intensified. what kind of challenge will this be for the five major a-share listed insurance companies?

on the investment side, the total investment income of the five insurance companies in the first half of the year totaled 337.063 billion yuan, a year-on-year increase of 33.29%. in terms of investment income results, the total investment return rate of the five major listed insurance companies is in the range of 2.7%-4.8%, and four insurance companies have achieved year-on-year growth, among which new china life insurance's total investment return rate increased by 1.1 percentage points year-on-year to 4.8%. however, the net investment return rate showed an overall downward trend, in the range of 1.8%-3.3%.

in order to balance the volatility of investment returns, all companies have increased their investments in fixed-income assets such as bonds. for example, in the first half of the year, the proportion of bonds in china life's main investment products was 57.36%, an increase of 3 percentage points. china pacific insurance's bond investment accounted for 55.6% of its investment assets, an increase of 3.9 percentage points. ping an of china, china insurance group, and new china life insurance also increased their bond investment ratios.

in this regard, wang zhaojiang, executive director of shenzhen beishan changcheng fund investment research institute, analyzed that the current preference of insurance funds for bond investment is due, on the one hand, to the rigid demand for the configuration structure of insurance fund asset management products; on the other hand, it is due to objective factors such as the current poor performance of the equity market and unclear risk-return ratio.

looking ahead to the future investment market, haitong international research believes that with the recovery of the domestic economy, if long-term interest rates stabilize or recover upward, the pressure on insurance companies to increase their fixed income investment yields will be alleviated. at the same time, the continued implementation of favorable real estate-related policies will also help ease insurance companies' concerns about the quality of their investment assets.

deng bin, assistant general manager and chief investment officer of ping an of china, also believes that the worst time for real estate has passed and it is in a period of adjustment, and the bottoming out has been formed.

"leading insurance companies will tend to allocate dividend stocks of central enterprises. the common characteristics of these stocks are high industry barriers and stable returns and dividends," wang zhaojiang predicted.

life insurance new business value surges

for life insurance companies, new business value is a key indicator that represents the discounted value of future net profits generated by new life insurance business sold over a period of time, estimated using actuarial methods.

from the perspective of new business value, the five life insurance companies have strong growth momentum, and the new business value of two companies has increased by more than 50%.

among them, the new business value of picc life insurance in the first half of 2024 nearly doubled, increasing by 91% year-on-year to 3.935 billion yuan; the new business value of new china life insurance in the first half of the year increased by 57% year-on-year to 3.902 billion yuan; the new business value of tai ping life insurance in the first half of the year followed closely behind picc life insurance and new china life insurance, achieving a growth of 22.8% to 9.073 billion yuan.

in the past two years, the agent channel that life insurance companies have always relied on has declined, and the importance of the bancassurance channel has risen again. relatively speaking, the commission rate of the bancassurance channel is higher, insurance companies need to pay higher costs, and the value contribution is low.

however, one year after the implementation of "reporting and banking integration", the new business value of the bancassurance channel of leading insurance companies has increased significantly. for example, ping an life insurance's new business value of the bancassurance channel in the first half of 2024 was 2.641 billion yuan, a year-on-year increase of 17.3%; picc life insurance also stated that the bancassurance channel achieved a new business value of 1.934 billion yuan in the first half of the year, a significant increase; for tai ping life insurance, the new business value of the bancassurance channel in the first half of the year increased by 26.5% year-on-year, and the new business value rate was 12.5%, an increase of 5.6 percentage points year-on-year.

why is the value contribution of the bancassurance channel increasing? wang peng, an associate researcher at the beijing academy of social sciences, said that in recent years, regulatory authorities have continuously adjusted their regulatory policies on the insurance industry, such as removing restrictions on the number of commercial bank branches that can cooperate with insurance companies, which has provided more opportunities for new business sales for life insurance companies. in addition, leading insurance companies have taken the bancassurance channel as the main driving force for new business growth, increasing investment and improving the service level and profitability of bancassurance business.

property and casualty insurance's comprehensive cost ratio decreased twice and increased once

for the three major property and casualty insurers that dominate the market, picc p&c, cpic property & casualty insurance, and ping an property & casualty insurance, the three companies achieved a combined net profit of 32.203 billion yuan in the first half of the year, a year-on-year decrease of 1.09%. among them, cpic property & casualty insurance achieved a net profit of 4.792 billion yuan, a year-on-year increase of 18.6%, leading the growth rate; ping an property & casualty insurance achieved a net profit of 9.954 billion yuan, a year-on-year increase of 7.2%; picc property & casualty insurance had the highest net profit of 17.457 billion yuan, a year-on-year decline.

in terms of premium income, the three property and casualty insurance companies achieved steady business growth, with a total original premium income of 585.421 billion yuan, a year-on-year increase of 4.54%.

this year, natural disasters have occurred frequently in some parts of my country. according to the relevant information reported by the office of the national disaster prevention, mitigation and relief committee and the ministry of emergency management, in the first half of this year, various natural disasters in my country caused 32.381 million people to be affected to varying degrees across the country, with direct economic losses of 93.16 billion yuan.

natural disasters have affected the comprehensive cost rate of property and casualty insurance companies to a certain extent. in the first half of the year, the comprehensive cost rate of picc property and casualty insurance was 96.8%, which was 0.4 percentage points higher than the same period last year due to factors such as major disasters. yu ze, president of picc property and casualty insurance, revealed at the picc mid-term performance meeting that so far this year, picc property and casualty insurance has suffered a gross loss of 9 billion yuan from major disasters.

ping an property & casualty's overall comprehensive cost ratio reached 97.8%, an improvement of 0.2 percentage points year-on-year, due to the decline in underwriting losses in its guarantee insurance business. however, the company's comprehensive cost ratio for auto insurance was 98.1%, up 1 percentage point year-on-year. in the first half of the year, tai ping property & casualty's underwriting comprehensive cost ratio was improved, down 0.8 percentage points to 97.1%.

as the global climate warms and extreme weather occurs more frequently, the property and casualty insurance industry urgently needs to shift from traditional post-disaster compensation to pre-disaster prevention and early warning. wang peng believes that property and casualty insurance companies should improve their ability to identify and prevent risks such as natural disasters, and improve risk assessment and early warning levels through scientific and technological means. in terms of risk reduction, by providing customers with risk reduction services such as disaster prevention and mitigation consulting, loss prevention advice, etc., customers' actual losses and compensation expenses can be reduced, thereby controlling the comprehensive cost rate.

beijing business daily reporter hu yongxin and li xiumei