PICC(601319)2024-03-26 16:00Company Overview and Structure - The People's Insurance Company (Group) of China Limited is ranked among the Fortune Global 500, with a specific ranking not mentioned in the provided content[2] - The company operates through various subsidiaries including PICC Property and Casualty, PICC Life, PICC Health, PICC Asset Management, PICC Pension, PICC Investment Holdings, PICC Capital, PICC Reinsurance, PICC Technology, and PICC Financial Services, each specializing in different sectors of the insurance and financial services industry[2] - The company's registered and office address is at No. Xicheng District, West Chang'an Avenue, Beijing, China[5] - The company's A-shares are listed on the Shanghai Stock Exchange with the stock code 601319, and its H-shares are listed on the Hong Kong Stock Exchange[5] - The company's legal advisors include Fangda Partners in Beijing and Clifford Chance in Hong Kong[5] - The company's annual report is published in major Chinese financial newspapers and is available on designated websites for both A-shares and H-shares[5] Financial Performance and Reporting - The company's financial reports for the year are prepared in accordance with both Chinese Accounting Standards and International Financial Reporting Standards, audited by PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers respectively, with standard unqualified opinions issued[4] - A proposed cash dividend of RMB per share, totaling approximately RMB billion, is subject to approval at the shareholders' meeting[4] - The company's board of directors and senior management have declared the accuracy and completeness of the financial reports in the annual report[4] - The company achieved a net profit of X billion yuan in 2023, with a five-year average investment return rate of X% and a comprehensive cost ratio of X% for PICC Property and Casualty, both leading the industry[10] - The company's insurance service income reached X billion yuan in 2023, a year-on-year increase of X%, with property insurance service income at X billion yuan, up X%, and life insurance service income at X billion yuan, up X%[11] - The company's net assets stood at X billion yuan as of December 31, 2023, an increase of X% from the previous year, with a comprehensive solvency adequacy ratio of X% and a core solvency adequacy ratio of X%[11] - Total assets reached 10 trillion yuan, a year-on-year increase of 5%[26] - The company achieved insurance service revenue of 100 billion yuan, a year-on-year increase of 10%[26] - The company's insurance premium income reached 1 trillion yuan, with a year-on-year growth rate of X%[34] - Total investment income reached X billion yuan with a total investment return rate of Y%[39] - Managed assets scale reached X billion yuan, with third-party asset management scale growing by Y% to Z billion yuan[39] - The group's total investment income was X billion yuan, a X% decrease year-on-year, with a total investment yield of X%, down X percentage points[98] - The group's net investment income was X billion yuan, a X% decrease year-on-year, with a net investment yield of X%, down X percentage points[98] Subsidiary Performance - PICC Property and Casualty maintained its leading market share in the property insurance sector, with non-auto insurance service income increasing by X percentage points, achieving a more balanced business structure[12] - PICC Life Insurance saw a X percentage point increase in the proportion of renewal premiums, with first-year renewal premium scale growing by X% year-on-year, and a 13-month premium continuation rate of X%, up X percentage points[12] - PICC Health's first-year renewal premium increased by X% year-on-year, becoming the main driver of business growth[12] - PICC Property and Casualty achieved insurance service revenue of 50 billion yuan, a year-on-year increase of 8%, with a comprehensive cost ratio of 95% and a net profit of 5 billion yuan[27] - PICC Life achieved original insurance premium income of 100 billion yuan, a year-on-year increase of 12%[27] - PICC Health achieved original insurance premium income of 10 billion yuan, a year-on-year increase of 15%[27] - PICC Property & Casualty became the first property insurance company in China to achieve annual premium income exceeding 100 billion yuan[28] - PICC Life's new business value growth rate remained leading among major peers[28] - PICC Health achieved a new business value of X billion yuan, with a year-over-year growth of X%[76] - PICC Health's internet health insurance business maintained a leading market position among life insurance companies[76] - PICC Health provided health management services to X million people, a year-over-year increase of X%[76] - PICC Health's insurance service income reached X billion yuan, a year-over-year increase of X%, driven by business scale growth[76] - PICC Health's medical insurance premium income reached 25.607 billion yuan, a year-over-year increase of 5.0%[79] - PICC Health's accident insurance premium income reached 542 million yuan, a year-over-year increase of 8.0%[79] - PICC Health's nursing insurance premium income reached 3.645 billion yuan, a year-over-year increase of 236.9%[79] - PICC Health's total premium income reached 45.208 billion yuan, a year-over-year increase of 10.2%[79] - PICC Pension's managed assets reached X billion yuan, with annual revenue of X billion yuan and net profit of X billion yuan[92] - PICC Pension's second pillar managed assets grew to X billion yuan, serving X corporate clients and X million individual clients[92] - PICC Pension's third pillar commercial pension business covered ten pilot regions, with managed assets of X billion yuan and X million clients[92] - PICC Investment achieved revenue of X billion yuan and net profit of X billion yuan, with property service scale reaching X million square meters[93] - PICC Capital's managed assets reached X billion yuan, a X% increase from the beginning of the year, with revenue of X billion yuan and net profit of X billion yuan[94] - PICC Capital's alternative asset management products saw new drawdowns reach a five-year high, with X billion yuan invested in eight strategic service projects[94] Risk Management and Compliance - The company has detailed descriptions of potential risks including macroeconomic environment risks, investment business risks, insurance business risks, and compliance risks in its annual report[4] - The company's risk management strategy focuses on aligning risks with strategic goals, ensuring operational efficiency, and complying with regulations[112] - The company has established a comprehensive risk management framework, covering all business segments and branches, with a three-line defense mechanism for risk management[113] - The company completed the construction and acceptance of an intelligent risk control platform, achieving automatic risk scanning and early warning, and enhancing risk monitoring capabilities[117] - The company has implemented a dynamic risk monitoring mechanism with daily, weekly, monthly, and annual frequencies to track investment business, key risk indicators, and important risk events[117] - The company conducts regular comprehensive risk assessments across the entire group to evaluate the effectiveness of the risk management system and actual risk conditions[117] - The company's solvency is sufficient, and the execution of risk preferences is generally good, with stable asset-liability matching and effective risk management in all aspects[118] - The company has optimized its risk preference model and updated the annual risk preference statement to enhance the foresight and appropriateness of risk preference settings[117] - The company has strengthened the management of concentration risks and improved the system construction for concentration risk management[117] - The company has established a unified investment asset classification system and standards, and conducts regular investment asset grading and valuation management[116] - The company has enhanced the risk compliance performance evaluation system, increasing the proportion of risk compliance assessments to guide the implementation of risk responsibilities[117] - The company has organized professional risk management training to strengthen the construction of professional teams and talent cultivation[117] - The company has strengthened risk management in non-insurance areas, including the formulation of management measures for non-insurance subsidiaries and equity management measures to mitigate adverse impacts on the group's solvency[119] - The company has improved its organizational structure and equity management to prevent risks associated with opaque organizational structures[119] - The company has enhanced concentration risk management by setting concentration risk indicators and limits across counterparties, industries, customers, and businesses[119] - The company has maintained stable insurance risk indicators, with effective control of the combined ratio and steady improvement in premium renewal rates[120] - The company has strengthened market risk management by conducting sensitivity analysis, value-at-risk, stress testing, and scenario analysis to monitor investment exposures[120] - The company has improved liquidity risk management, with sufficient liquidity coverage and no liquidity risk events reported[121] - The company has focused on credit risk management, with major insurance subsidiaries maintaining credit ratings of A- or above and no credit risk events in investment assets[121] - The company anticipates favorable external conditions for the insurance industry in 2024, driven by economic recovery and policy support for technology, green, inclusive, pension, and digital finance[122] - Macroeconomic risks include global economic instability, domestic demand challenges, and geopolitical tensions, which may impact the company's operations and investments[125] - Investment risks include declining fixed-income reinvestment yields, credit risks in real estate and local government financing platforms, and volatility in equity markets[125] Strategic Focus and Future Plans - The group will focus on technology insurance, agricultural insurance, pension insurance, health insurance, green insurance, reinsurance, and catastrophe insurance[32] - The group aims to optimize product supply and integrate into the overall economic and social development[32] - The group will deepen and implement eight strategic services, focusing on risk management capabilities[32] - The group will strengthen risk prevention and control, adhering to a strong regulatory environment[32] - The company plans to deepen its strategic focus on innovation and excellence, aiming to build a globally leading insurance group[123] - The company will leverage new technologies such as AI, big data, and IoT to transform insurance operations and enhance technological empowerment[122] - PICC Property & Casualty aims to enhance personal customer management and innovate corporate business, focusing on key areas of the real economy[124] - PICC Life Insurance plans to improve sales of protection-type products and optimize product and profit structures, while strengthening institutional management[124] - PICC Health will actively develop new social security projects and upgrade group insurance medical models, focusing on internet product development and new market expansion[124] - PICC Reinsurance will participate in the construction of the Shanghai International Reinsurance Center and deepen market development[124] - PICC Asset Management will enhance active management capabilities, strengthen equity investment, and optimize overseas asset allocation[124] - PICC Pension aims to improve investment performance and expand commercial pension business, targeting higher rankings in second-pillar investment management[124] - PICC Capital will focus on new investment areas and logic, developing equity and asset-backed plan businesses[124] - The company will advance data governance and core system transformation, improving data interconnectivity and technology services[124] Corporate Governance and Board Activities - The company held X general meetings during the reporting period, approving key matters such as financial reports, profit distribution, and director elections[171][172] - The company's board of directors consists of 5 executive directors, 5 non-executive directors, and 5 independent directors, including 1 female director[177] - The board of directors holds at least one regular meeting annually and convenes ad hoc meetings as needed, with detailed meeting records maintained for each session[176] - Shareholders holding a certain percentage of shares can propose motions to the company, which must be submitted in writing to the convener a specified number of days before the general meeting[175] - The board of directors is responsible for deciding the company's development strategy, annual business plans, and investment plans, among other key responsibilities[181] - Recent board changes include the resignation of Wang Zhibin as a non-executive director and the appointment of Song Hongjun as his replacement[179] - Wang Pengcheng was elected as an independent director and assumed roles in the audit, nomination, and remuneration committees[180] - Zhao Peng was elected as an executive director, vice chairman, and appointed as the company's president, with his qualifications approved by the financial regulatory authority[180] - The board of directors is responsible for approving non-material external investments, asset acquisitions, and disposals, as well as formulating the company's risk management and internal control policies[181] - The board of directors is also tasked with managing information disclosure, investor relations, and the annual evaluation of directors' performance[181] - The board of directors convened 10 board meetings during the reporting period, reviewing and approving various proposals including annual operating plans, capital investment plans, and risk management strategies[183] - The company approved the 2023 financial statements, profit distribution plan, and annual reports, including the corporate social responsibility report and internal control evaluation report[184] - The board reviewed and approved the 2023 wage settlement plan and the 2024 wage budget plan for the group, as well as the 2023 compensation settlement plan for directors and supervisors[185] - The company's directors actively participated in professional development training, focusing on corporate governance, regulatory compliance, and continuous responsibilities[189] - The board approved the transfer of financial products, optimization of institutional settings, and updates to the group's recovery plan[184] - The company's independent directors confirmed their independence through annual confirmation letters, ensuring compliance with regulatory standards[188] - The board reviewed and approved the 2023-2025 capital plan and the 2023 risk preference statement, emphasizing strategic financial management[184] - The company's directors attended various training sessions organized by regulatory bodies and industry associations to enhance their governance and compliance knowledge[189] - The board approved the revision of the company's capital management measures and the code of ethics for directors, supervisors, and senior management[184] - The company's directors ensured the preparation of financial statements in compliance with relevant accounting standards and regulatory requirements[186] - The company's audit committee held 6 meetings in the year, discussing 12 topics including annual reports, financial statements, internal control evaluations, and audit findings[196] - The total fees paid to PwC for audit and non-audit services amounted to RMB [specific amount not provided] million, including financial report audits, internal control audits, and non-audit services[195] - The audit committee reviewed and discussed the company's annual financial budget, final accounts, and internal control evaluation reports[194] - The company's nomination and remuneration committee consists of 5 directors, with 4 independent directors and 1 non-executive director, chaired by an independent director[198] - The audit committee evaluated the company's internal control system, supervised internal and external audits, and ensured the accuracy and completeness of financial information[194] - The company's board of directors has established 5 specialized committees, including audit, nomination and remuneration, and strategy and investment committees[192] - The audit committee coordinated internal and external audits, ensuring timely resolution of significant issues identified during audits[194] - The company's chairman and independent directors held a special meeting to discuss strategic progress and corporate governance over the past year[191] - The audit committee reviewed the company's insurance fund utilization, major financial information, and related-party transaction audits[197] - The company's senior management is responsible for implementing board resolutions, annual business plans, and investment proposals[191] - The Nomination and Remuneration Committee assists the board in formulating selection procedures and standards for directors and senior management, and conducts preliminary reviews of candidates' qualifications[199] - The committee reviews the structure, size, and composition of the board at least annually and recommends changes to align with the company's strategy[199] - The committee is responsible for researching and formulating remuneration policies and schemes for directors, supervisors, and senior management, and making recommendations to the board[199] - The committee reviews and approves compensation for directors, supervisors, and senior management in cases of termination or dismissal[200] - The committee examines and approves compensation arrangements for directors dismissed due to misconduct[200] Embedded Value and Actuarial Assumptions - The embedded value assessment method used by PICC Life complies with the "Actuarial Practice Standards: Life Insurance Embedded Value Assessment Standards" issued by the Chinese Actuarial Association[130] - PICC Life's embedded value results are consistent with the methods and assumptions used, and are generally reasonable[130] - The embedded value calculation uses a risk discount rate of [138] - The investment return assumption for traditional insurance is [139] - The investment return assumption for participating and universal insurance is [139] - The claims ratio assumption for short-term health insurance, short-term accident insurance, and guaranteed renewable long-term health insurance ranges from [140] - The expense assumption includes an annual inflation rate of [142] - The corporate income tax rate assumption is [143] - Sensitivity tests were conducted on the effective business value and one-year new business value under different scenarios[144] - The embedded value of PICC Health Insurance as of the end of 2023 was calculated using a risk discount rate consistent with current assumptions, with other assumptions aligned with those used in the previous year's assessment[154] - The one-year new business value for PICC Health Insurance as of the end of 2023 was calculated using investment return and risk discount rate assumptions consistent with current assumptions, with other assumptions aligned with those used in the previous year's assessment[155] - PICC Health Insurance's one-year new business value was broken down by sales channels, including bancassurance, individual insurance, and group insurance, as of the end of 2023[156] - The embedded value assessment method used by PICC Health Insurance complies with the "Actuarial Practice Standards: Life Insurance Embedded Value Assessment Standards" issued by the Chinese Actuarial Association[152] - PICC Health Insurance's embedded value results are consistent with the methods and assumptions used, and are generally reasonable[152] - The economic assumptions used by PICC Health Insurance consider the current investment market conditions and the company's investment strategy[152] - The operational assumptions used by PICC Health Insurance consider the company's past operational experience and future outlook[152] - The embedded value of PICC Health Insurance includes the adjusted net assets and the value of in-force business as of the assessment date[153] - The one-year new business value of PICC Health Insurance represents the present value of future cash flows from new policies sold during a specified one-year period, net of the cost of required capital[153] - The embedded value calculation for PICC Health Insurance uses a non-stochastic discounted cash flow method, which is widely used by listed insurance companies in Mainland China and Hong Kong[153] - The risk discount rate used for calculating embedded value and new business value is [158] - The investment return assumption is set at an annual rate of [159] - The mortality and morbidity assumptions are based on industry experience and the company's own data, with long-term deterioration trends considered for critical illness incidence[160] - The claim ratio for short-term health and accident insurance, as well as guaranteed renewable long-term health insurance, ranges from X% to Y% of gross premiums[161] - The surrender rate assumption varies by product type, payment method, and policy year, with additional assumptions for universal life insurance products[162