Huachuang Securities·2025-06-13 15:16Investment Rating - The report maintains a "Recommendation" rating for the insurance industry, indicating an expected increase in the industry index by more than 5% over the next 3-6 months compared to the benchmark index [21]. Core Insights - The insurance index rose by 2.07% this week, outperforming the broader market by 2.33 percentage points. Individual stocks such as Taiping (+10.36%) and ZhongAn (+4.57%) saw significant gains [1]. - The new insurance contract accounting standards are set to be implemented on January 1, 2026, with some companies allowed to defer compliance if they provide justification by June 30, 2025. This transition is expected to benefit the industry by allowing better management of financial reporting during the changeover [4][5]. - The report highlights that the implementation of new accounting standards has increased the volatility of listed insurance companies' performance, primarily due to fluctuations in financial assets measured at fair value through profit or loss (FVTPL) [5]. Summary by Sections Market Performance - The insurance sector's total market capitalization is approximately 30,425.11 billion, with a circulating market value of 21,038.53 billion [6]. - The absolute performance over the last 12 months is 41.6%, with a relative performance of 32.0% compared to the benchmark [7]. Regulatory Developments - The Ministry of Finance and the National Financial Regulatory Administration issued a notification on June 12 regarding the implementation of new insurance contract accounting standards [2]. - China Pacific Insurance received approval for its chairman's qualification from the financial regulatory authority [2]. Investment Recommendations - The report suggests a focus on FVOCI asset allocation to mitigate the impact of stock market fluctuations on performance, especially for mid-sized insurance companies [5]. - The current price-to-earnings (PE) and price-to-book (PB) ratios for major companies are provided, with China Ping An rated as a "Strong Buy" and others like China Pacific Insurance and China Life rated as "Recommended" [10].