Review of the premium war in the first 7 months: Ping An, China Life surpass 500 billion yuan again, Sunshine's growth rate approaches 13%

On August 16, China Ping An (601318.SH), New China Life Insurance (601336.SH), and Sunshine Insurance (06963.HK) disclosed premium data for the first 7 months.

So far, a total of 8 A-share and H-share listed insurance companies have disclosed their premium data.

According to Xinfeng (ID: TradeWind01), China Ping An, China Life Insurance (601628.SH), China Reinsurance (601319.SH), China Pacific Insurance (601601.SH), New China Life Insurance, Tianmao Group (000627.SZ) under Guohua Life Insurance, Zhongan Online (06060.HK), and Sunshine Insurance collectively earned premiums of 2.085145 trillion yuan, an increase of 3.65% compared to the same period last year.

China Ping An and China Life Insurance continue to lead in terms of scale, with revenues of 550.866 billion yuan and 523.5 billion yuan, representing growth rates of 5.66% and 4.39% respectively.

This is the second time since 2023 that these two leading institutions have surpassed the 500 billion yuan premium mark in the first 7 months.

Sunshine Insurance continues to lead the industry with a year-on-year growth rate of 12.96%; Zhongan Online follows with 6.14%.

In terms of life insurance, affected by the high base in the same period last year and the impact of "separating underwriting from sales," the premium income of 7 life insurance companies reached 1.318467 trillion yuan, with a growth rate of 2.75%; in terms of property insurance, the income of 5 insurance companies reached 705.235 billion yuan, with a growth rate of 5.09%.

3 life insurance companies lagging behind in growth

Overall, the growth rate of listed insurance companies' life insurance business is still in a transformation "deep water zone," with an overall premium income growth rate of 2.75%, far lower than the 5.09% of property insurance.

Looking at the performance of each company, beneath the calm surface, there are already turbulent undercurrents.

Leading insurance companies still maintain an absolute advantage in scale.

On the basis of the high base in the previous year, China Life Insurance, as the "leader in life insurance," still maintains its premium scale and growth rate at the forefront of the industry, earning a total premium of 523.5 billion yuan in the first 7 months, with a growth rate of 4.39%, an improvement from the 4.13% in the first half of the year.

Ping An Life Insurance closely follows, with a premium income of 342.803 billion yuan, a year-on-year growth of 6.43%, representing the highest growth rate among the life insurance subsidiaries of A-share listed insurance companies.

The second-tier companies are also making efforts.

Although the premium scale of Sunshine Life Insurance has not exceeded 100 billion yuan and ranks second to last among the life insurance subsidiaries of listed insurance companies, its premium growth rate is as high as 13.64%, the highest among the aforementioned life insurance institutions.

While the premium growth rate of PICC Life Insurance is only 1.47%, it is higher than the 0.31% in the first 6 months and -3.62% in the first 5 months, indicating that its monthly income is continuing to recover.

Some are happy while others are worried.

Guohua Life Insurance, New China Life Insurance, and Taibao Life Insurance are three institutions whose premiums are lower than the same period last year.

The premium scales of these three insurance companies are 27.152 billion yuan, 111.875 billion yuan, and 170.597 billion yuan, with year-on-year declines of 11.41%, 6.43%, and 2.56% respectively However, Guohua Life Insurance and New China Life Insurance saw a rebound in monthly premiums in July compared to the same period last year, with increases of 11.95% and 2.77% respectively.

Only Taikang Life Insurance experienced a year-on-year decline of 12.83% in monthly premiums in July.

There are wolves in front and tigers and leopards behind.

In the first half of the year, three non-listed insurance companies, namely Ruizhong Life Insurance, Taikang Life Insurance, and China Post Life Insurance, surpassed a premium scale of one trillion, surpassing the current performance of New China Life Insurance and PICC Life Insurance.

Among them, Ruizhong Life Insurance is a newly established company with no comparable performance for the same period; Taikang Life Insurance and China Post Life Insurance saw growth rates as high as 20.97% and 32.81% in the first half of the year.

Although Taikang Life Insurance is still in a leading position, it also needs to adjust its strategy quickly to reverse the downward trend in premiums.

In terms of personal insurance business, three years ago, Taikang Life Insurance launched the "Changhang Action" to seek transformation, changing from group sales to one-on-one sales, from short-term incentives to normalized operations, and from mass tactics to focusing on quality and nurturing.

Currently, the "Changhang Action" has entered its second phase, with the core shifting to internal transformation, and the leader has changed from former CEO Cai Qiang to the newly appointed Vice President Li Jinsong in July.

With the continuous decline in the number of agents, how Taikang Life Insurance, surrounded by "wolves", will reverse its decline remains a market focus.

Strengthening bank-insurance cooperation may be one of the paths.

Under the "separation of banking and insurance" policy, the bank-insurance channels of various companies have been impacted, but in the long run, this policy is beneficial for regulating business and enhancing the value of bank-insurance channels.

In the first half of the year, Sun Life, with bank-insurance channels as its core, and several "bank-owned" life insurance companies have made breakthroughs in premium growth.

Cai Qiang once stated that the future of Taikang Life Insurance lies in running on "two legs" of personal insurance and bank-insurance; the new CEO Li Jinsong has led the company's bank insurance department and aims to achieve premium growth of 223.5%, 308.7%, and 12.5% from 2021 to 2023.

The recruitment and training of personal insurance agents are essential.

With a sharp decline in the number of agents and the "squeezing" of industry profits, many leading insurance companies such as Ping An Life, China Life, Taikang Life, PICC Life, and AIA have launched a competition for excellent human resources and introduced agent brands.

For example, in June last year, Ping An launched the high-end agent brand "Ping An MVP", in the first quarter of this year, Taiping Life recruited "Medical Health Care Agents", and New China Life launched the "New China WE Plan".

Taikang Life Insurance also released the "CA Entrepreneur Plan" in early July, aiming to build a team of high-quality financial talents suitable for the market needs of the post-80s and post-90s.

However, the effectiveness of the above plans still awaits market validation.

Slowing Growth in Property Insurance

Compared to the fluctuations in personal insurance companies, the growth rate of property insurance business under various listed insurance companies, although lower than the same period last year, has stabilized.

According to Xinfeng (ID: TradeWind01), the property insurance companies under the five listed insurance companies collected a total premium of 705.235 billion yuan in the first seven months, with an increase of 5.09% In the "Big Three" of premium scale (PICC, Ping An, CPIC), the premium growth rates of CPIC P&C and PICC P&C in the first 7 months of last year were 13.05% and 7.65% respectively, but have now fallen to 7.51% and 4.04% this year.

While Ping An P&C has seen an increase in premium growth compared to last year, it is only 0.06 percentage points higher.

While top institutions are under pressure, smaller insurers such as Sunshine P&C and Zhongan Online have contributed growth rates of over 5%. Among them, Sunshine P&C's premium grew by 11.59% year-on-year, leading other companies.

Car insurance remains the main source of income for P&C insurers, and the slowdown in premium growth is due to the narrowing growth of car insurance.

For example, in the first 7 months, PICC P&C's car insurance income was 162.296 billion yuan, accounting for 47.07% of total premium income.

In the same period last year, PICC P&C's car insurance business grew by 5.2%, but has now fallen to 2.74% this year.

The reasons for the current slowdown in car insurance growth are roughly threefold: first, the decrease in expense ratio after the integration of underwriting and claims, leading to reduced sales staff motivation; second, the slowdown in new car sales growth; and third, the high base effect due to the end of the epidemic and the recovery of consumer willingness in the first half of 2023.

The entry of new forces in car insurance may affect the future landscape of the car insurance market.

For example, BYD P&C has disclosed that its insurance business revenue in the second quarter was 67 million yuan, with a net profit of 6 million yuan; the overall net profit in the first half of the year has reached 18 million yuan, an increase of 45 million yuan compared to the same period in 2023.

Although compared to the "Big Three", BYD P&C's premium scale is significantly smaller, it still has huge potential in the future.

Firstly, BYD P&C only started offering insurance in mid-May, and with limited coverage in Anhui, Jiangxi, Shaanxi, and other areas, the number of policies issued from mid-May to the end of June has reached about 13,700, with an average premium of 4,900 yuan per policy.

The strength of the industry's first new force "player" is not to be underestimated.

Secondly, as the proportion of new energy vehicles gradually increases, the structure of the car insurance market is bound to undergo corresponding changes. The increase in the penetration rate of intelligent driving makes a large amount of driver behavior data a competitive advantage for new energy vehicle companies.

A research report from Dongxing Securities concluded that new energy vehicle companies have many advantages in entering the insurance market.

For example, they can simplify the claims process for new energy vehicles, design innovative products that match risks and claims, monopolize sales scenarios, and directly obtain information from car owners.

When BYD P&C was established, executives from the "Big Three" expressed at a performance release conference, "Like everyone in the market, we look forward to their performance. It's difficult for car companies to do insurance, and we are also curious about what their structure, strategy, and direction will be like."

Currently, the only major car manufacturer in the car insurance market, BYD P&C, has handed in its first "report card".

Perhaps for a long time, the premium scale achieved by "car companies entering insurance" will still not be able to compete with the top insurers However, in the longer term future, how will the property insurance company's auto insurance business develop, and what kind of sparks will be generated in the competition and cooperation between automobile companies and insurance companies, remains to be seen