Core Viewpoint - Zhongtai Securities maintains a "buy" rating for China Pacific Insurance (02328), with profit forecasts unchanged, expecting net profit attributable to shareholders to reach 33.09 billion, 35.39 billion, and 36.94 billion yuan for 2025-2027, with year-on-year growth rates of 2.8%, 6.9%, and 4.4% respectively, indicating potential for further valuation release due to high dividend yield and improving market conditions [1] Group 1 - The company is actively promoting the "reporting and operation integration" for non-auto insurance, having initiated key work ahead of schedule, including a meeting in Xiamen with ten property insurance companies to discuss industry self-regulation and explore integration in key areas [2] - The company has begun product development for demonstration products in the new insurance and liability insurance sectors, and has fully initiated cost governance for non-auto insurance [2] - In the first half of 2025, the non-auto insurance combined operating ratio (COR) decreased by 0.1 percentage points to 95.7% due to major disasters, with most non-auto insurance types achieving underwriting profitability except for health insurance and liability insurance, which reported underwriting losses [2] Group 2 - The company updated its guidance for commercial non-auto insurance underwriting profitability, adjusting the target for auto insurance COR from around 97% to below 96%, and aiming for a COR of below 100% for new energy vehicles [3] - The target for commercial non-auto insurance underwriting was adjusted from breakeven to below 99% [3] - Assuming the implementation of the new regulations, the company estimates an increase in underwriting profit of approximately 1.351 billion yuan for 2024, accounting for about 3.6% of pre-tax profit [3]

Core Viewpoint - The National Financial Regulatory Administration has issued a notification to strengthen the regulation of non-auto insurance business, requiring property insurance companies to enhance insurance rate management and implement the "report and act as one" regulatory rule, effective from November 1, 2025 [1] Group 1: Regulatory Framework - The notification establishes a new regulatory framework for non-auto insurance business, emphasizing the need for insurance companies to align actual insurance terms and rates with the submitted regulatory documents, preventing any circumvention of filing standards [2][3] - The core aim is to ensure compliance and sustainable operation of non-auto insurance businesses, eliminating any attempts by insurance institutions to exploit regulatory loopholes [2] Group 2: Impact on Insurance Institutions - The notification is expected to promote the standardized development of non-auto insurance business, encouraging insurance institutions to adhere to regulatory limits and avoid irrational competition that leads to high costs and losses [3] - It mandates that property insurance companies determine insurance rates based on fairness, reasonableness, and adequacy, and prohibits excessive fees that do not correspond to the services provided [3] Group 3: Consumer Protection - The notification enhances consumer rights protection by enforcing a "fee upon issuance" policy, which requires insurance companies to issue formal policies only after full premium payment, thereby reducing accounts receivable and improving cash flow [4] - This regulation aims to mitigate conflicts between insurance institutions and clients, fostering a healthier interaction between both parties [4]

Investment Rating - The report maintains an "Overweight" rating for the insurance industry [1] Core Viewpoints - The implementation of the "reporting and execution in unison" policy for non-auto insurance is expected to improve underwriting performance by reducing expense ratios and enhancing overall profitability [4][5] - Non-auto insurance premiums have increased significantly, now accounting for over 51% of total premiums, but the underwriting performance remains poor, with a combined ratio (COR) consistently above 100% for major insurers [6][26] - The new regulatory measures are anticipated to lower the expense ratios for various non-auto insurance products, particularly corporate property and liability insurance, which have historically suffered from high costs [5][54] Summary by Sections Non-Auto Insurance Performance - Non-auto insurance premiums have grown rapidly, with a 14.4% annual growth rate from 2014 to 2024, surpassing the 5.2% growth rate of auto insurance [12] - Despite the growth in premiums, the average COR for major insurers in the non-auto segment has remained above 100% since 2019, indicating ongoing underwriting losses [26][35] Impact of Regulatory Changes - The new policy, effective from November 1, 2025, aims to standardize fee management and improve underwriting quality by enforcing stricter compliance with approved insurance terms and rates [4][53] - The report estimates that if the policy successfully turns loss-making segments to profitability, the COR for major insurers could decrease by 0.2 to 0.9 percentage points, leading to significant increases in underwriting profits and pre-tax profits [8][54] Company-Specific Insights - China Life Insurance's non-auto COR is projected to be the highest at 101.9% in 2024, primarily due to losses in corporate property and liability insurance [7][35] - Ping An Insurance's non-auto COR is slightly better at 99.8%, but still reflects weak profitability largely due to issues in credit guarantee insurance [41][42] - China Pacific Insurance has shown relatively better performance with a non-auto COR of 99.1%, attributed to improved risk selection and better performance in agricultural insurance [48][52]

Core Viewpoint - The implementation of the "reporting and execution" (报行合一) policy for non-auto insurance is set to enhance regulatory oversight and improve the quality of the insurance industry, transitioning from a focus on scale to quality [1][4][6]. Regulatory Changes - The Financial Regulatory Authority has issued a notification that mandates strict adherence to reported fee rates and prohibits the submission of false reports or documents, effective from November 1, 2025 [1][2]. - The notification includes 12 key points aimed at optimizing assessment mechanisms, strengthening rate management, and regulating intermediary management [2][3]. Industry Impact - The non-auto insurance sector has seen a significant increase in premium income, reaching 777 billion yuan in 2024, with a compound annual growth rate exceeding 10% over the past five years [2]. - The shift to "reporting and execution" is expected to create short-term challenges for companies reliant on scale-driven growth, but will ultimately lead to improved industry quality and profitability [4][6]. Market Dynamics - The notification aims to curb irrational competition and ensure that insurance companies align their reported and actual expense rates, thereby preventing discrepancies [1][2]. - Companies will need to adapt to a new competitive landscape that emphasizes product design, risk management, and customer experience rather than just pricing and sales volume [6][7]. Long-term Benefits - The regulatory changes are anticipated to foster innovation in products and services, as companies will be encouraged to focus on sustainable growth and risk management [6][7]. - Intermediary institutions are expected to transition from a sales-oriented approach to a service-oriented model, enhancing compliance and professional capabilities [6].

Core Viewpoint - The National Financial Regulatory Administration has issued a notice to extend the "reporting and execution" regulatory system from the auto insurance sector to the non-auto insurance market, effective November 1, 2025, while abolishing the old regulations from 2007 [2][3]. Industry Background - Non-auto insurance business has seen rapid growth, with its premium share increasing from 37.1% in 2019 to 47.4% in 2024, according to Guosen Securities [2][3]. - The industry faces challenges such as underwriting losses in key products like liability and corporate property insurance, prompting the need for regulatory changes to curb irrational competition and refocus on product innovation and service enhancement [2][3]. Regulatory Changes - The notice defines non-auto insurance as all property insurance excluding motor vehicle insurance, with specific provisions for agricultural and export credit insurance [3]. - The "reporting and execution" requirement mandates that property insurance companies strengthen premium rate management and adhere to approved product rates, addressing long-standing issues of price distortion due to aggressive competition [3][4]. Implementation of "See Fee Issue Policy" - The notice mandates that insurance companies issue policies only after collecting premiums, addressing the issue of unregulated premium receivables that have led to financial burdens and disputes [5]. - This policy aims to reduce financial risks and bad debt pressures for property insurance companies, promoting a shift from aggressive competition to a focus on service and quality [5]. Collaborative Efforts - The notice emphasizes the need for regulatory bodies to monitor operational indicators of property insurance companies and conduct timely regulatory interviews and inspections for those exceeding approved fee levels [6]. - Industry organizations are tasked with developing industry standard clauses and self-regulatory guidelines to support the implementation of the new regulatory framework [6]. Definition of "Reporting and Execution" - "Reporting and execution" requires insurance companies to align their actual operational behaviors with the core elements declared during product registration, aiming to enhance transparency and curb malicious competition in the industry [7].

Core Viewpoint - The essence of implementing "reporting and operation integration" and "payment upon issuance" is to guide the non-auto insurance industry out of irrational competition and shift from extensive development to value development [1][9]. Group 1: Regulatory Changes - The Financial Regulatory Bureau has issued a notice focusing on the non-auto insurance sector, addressing issues of irregular operations and irrational competition, and promoting high-quality development [1][2]. - The notice will be implemented starting November 1, 2025, and requires insurance companies to adopt "reporting and operation integration" and "payment upon issuance" [1][2]. - "Reporting and operation integration" mandates that insurance companies strictly adhere to approved insurance terms and rates, ensuring consistency between recorded content and actual operations [2][3]. Group 2: Industry Performance - In the first eight months of 2025, total premium income for property insurance companies reached 1.22 trillion yuan, with non-auto insurance accounting for 619.5 billion yuan, representing 50.77% of total premiums [2]. - Non-auto insurance has shown faster growth compared to auto insurance, increasing its share from 26%-27% in 2013-2016 to over 50% currently [4]. - Despite this growth, non-auto insurance profitability remains weaker than auto insurance, with a comprehensive cost ratio of 97.0% for non-auto insurance compared to 94.2% for auto insurance [4][5]. Group 3: Implementation and Industry Response - Major insurance companies like China Life and Ping An Property Insurance have established task forces to implement the requirements of the notice [1][7][10]. - The notice also emphasizes the need for insurance companies to manage premium income more effectively and avoid practices like issuing policies before receiving full payment, which can lead to bad debt risks [6][10]. - Companies are expected to lower the assessment weight on premium scale and market share while increasing the focus on compliance, quality, and consumer rights protection [9][10].

Core Points - The Financial Regulatory Authority has issued a notification to enhance the supervision of non-auto insurance businesses, requiring property insurance companies to optimize their assessment mechanisms and standardize product development and usage [1][2][3] - The notification aims to shift the focus of non-auto insurance from scale-oriented growth to quality-oriented development, emphasizing compliance and consumer protection [2][4][6] - The implementation of the notification is set for November 1, 2025, leaving companies with limited time to adjust their operations accordingly [6][7] Group 1: Regulatory Changes - The notification mandates strict adherence to approved insurance terms and rates, prohibiting any substantial changes through informal agreements or modifications [3][5] - Property insurance companies are required to establish a mechanism for periodic rate review and dynamic adjustment, ensuring that pricing aligns with actual operational conditions [3][6] Group 2: Industry Response - Companies are actively preparing for the new regulations by focusing on assessment mechanisms, product management, compliance in distribution channels, and consumer rights protection [7] - The non-auto insurance sector has shown growth, with premium income reaching 514 billion yuan in the first half of 2025, marking a 5.65% increase year-on-year [4]

业内人士认为，短期内，《通知》将给财险公司带来一定冲击，但中长期而言，相关措施落地有助于提 升行业发展质量。随着费率厘定、费用核算、条款执行的全面规范，非车险经营将从"重规模"向"重质 量"转型，行业利润结构有望逐步改善。 "说一套，做一套"被严查 杜绝"阴阳费率" 所谓的"报行合一"，即保险公司在产品设计时的假设费用率，必须与实际销售过程中产生的费用率相 符。简单理解，就是"上报什么，就执行什么"，不能"说一套，做一套"，不能出现备案与实际销售行为 不一致的情况。 继车险及人身险的银保、个险渠道后，"报行合一"的规范也延伸到了非车险业务（即车险以外的其他财 产保险业务）。 这一方面与近年来非车险业务占比逐年提升有关。2024年，行业非车险保费收入为7770亿元，近5年的 年均复合增速超10%，保费占比也由2020年的39%提升至46%，几乎占了财险业务的半壁江山；另一方 面，为了抢占市场份额，非车险领域也出现了经营不规范、非理性竞争等问题。 此次《通知》共有12条内容，包含优化考核机制、加强费率管理、严格条款费率使用、强化保险中介管 理、规范经营管理费用等多项要求。 《通知》明确提出，财产保险公司应持续加强 ...

Core Viewpoint - The National Financial Regulatory Administration has issued a notification to extend the "reporting and implementation" regulatory system from the auto insurance sector to the non-auto insurance market, effective November 1, 2025, while abolishing the old regulations from 2007 [2][3]. Industry Background - Non-auto insurance has seen rapid growth, with its premium share increasing from 37.1% in 2019 to 47.4% in 2024, according to Guosen Securities [2][3]. - Major insurance products like liability and corporate property insurance are facing underwriting losses, prompting the need for regulatory changes to curb irrational competition and shift focus towards product innovation and service enhancement [2][3]. Regulatory Changes - The notification defines non-auto insurance as all property insurance excluding vehicle insurance, with specific provisions for agricultural and export credit insurance [3]. - The notification mandates property insurance companies to strengthen premium rate management and adhere to approved insurance products, establishing a "reporting and implementation" requirement for non-auto insurance [3][4]. Financial Management Improvements - The notification addresses the issue of non-standard premium receivable management, emphasizing that insurance companies must issue policies and invoices only after receiving premiums [6]. - It aims to reduce financial risks and bad debt pressure on property insurance companies, promoting a shift from extensive competition to a focus on service and quality [6]. Collaborative Efforts - The notification emphasizes the need for regulatory bodies to monitor operational indicators of property insurance institutions and conduct timely regulatory interviews and inspections for those exceeding approved fee levels [7]. - Industry organizations are required to assist in enhancing non-auto insurance regulation, including developing industry standard clauses and self-regulatory guidelines [8][9].

Core Viewpoint - The non-auto insurance sector is facing stricter regulatory policies due to issues of irregular operations and irrational competition, as highlighted in the recent notification from the National Financial Supervision Administration [2][3][8]. Summary by Relevant Sections Regulatory Changes - The notification emphasizes the need for "reporting and operation integration," requiring insurance companies to align their product pricing assumptions with actual operational behaviors to prevent discrepancies [3][8]. Non-Auto Insurance Business Overview - Non-auto insurance refers to all property insurance business outside of vehicle insurance within property insurance companies. The growth of non-auto insurance has been significant, with premium income share increasing from 37.1% in 2019 to 47.4% in 2024 [4][5]. Market Challenges - Despite rapid growth, the non-auto insurance sector is experiencing severe competition, leading to practices such as splitting coverage and altering the nature of insured items to reduce costs. This has resulted in distorted expense structures and pressure on underwriting profits [5][7]. Losses in Non-Auto Insurance - The sector is currently in a state of underwriting losses, exacerbated by high claims rates from certain insurance products and a lack of historical pricing and claims experience. For instance, by the end of 2024, the comprehensive cost ratio for liability and guarantee insurance at China Ping An exceeded 100% [7][9]. Implementation of New Regulations - The notification outlines specific requirements for insurance companies, including the need to establish fair and reasonable pricing, adhere strictly to approved insurance products, and avoid any form of disguised fee adjustments [9][10]. Impact on Industry Practices - The new regulations will enforce stricter requirements on the pricing and issuance of insurance policies, mandating that companies issue policies only after receiving full premium payments. This aims to improve financial management and reduce market disruptions [11][12]. Long-term Industry Outlook - The regulatory changes are expected to guide the non-auto insurance sector towards more rational competition, enhance underwriting capabilities, and ultimately provide better risk management services while reducing the risk of premium receivables [12].