2025-07-11 01:13Summary of Insurance Industry Mid-Year Investment Strategy 2025 Industry Overview - The insurance industry achieved excess returns in the first half of 2024, despite a slowdown in new business growth, indicating strong overall profitability [1][3] - The current valuation levels in A-shares and Hong Kong stocks reflect relatively pessimistic investment return assumptions, with valuation percentiles at historically low levels [1][4] Core Insights and Arguments - Short-term earnings in the insurance sector are primarily driven by valuation increases, while intrinsic value will contribute more significantly in the long term [1][4] - The risk of interest spread loss is low, with a continuous decline in new business liability costs and improved expenses, limiting the impact of long-term interest rate declines on leading listed insurance companies [1][5] - Effective business value can be used to assess the reasonable valuation level of existing businesses, as it has clear sensitivity calculations and conservative estimates [1][6] - The fundamental aspects will not drag down the current insurance industry's valuation, with trends favoring leading companies in product and service competitiveness [1][7] Investment Recommendations - The current insurance sector has room for valuation recovery, with a stable outlook on the liability side [2][8] - Recommended stocks include flexible options like Xinhua Insurance or Hong Kong stocks, as well as dividend-yielding stocks like China Ping An and China Pacific Insurance [2][9] Additional Important Points - As of June 20, 2025, the insurance index rose by 3.5 percentage points, outperforming the market by nearly 6 percentage points, with significant excess returns from companies like Ping An, Taiping, and Xinhua [3] - The trend of integrating insurance and banking is beneficial for leading companies, enhancing their market share and competitive position [1][7]