Zhong Guo Yin Hang·2024-05-06 15:48Summary of Conference Call on China Pacific Insurance and China Life Insurance Industry Overview - The conference call focused on the performance of two major insurance companies in China: China Pacific Insurance (CPIC) and China Life Insurance (CLI) during the first quarter of 2024. Key Points on China Pacific Insurance (CPIC) 1. Q1 Performance: CPIC reported a current value of 5.2 billion yuan, a year-on-year increase of 30%. The scale net profit reached 11.8 billion yuan, reflecting a 1% growth year-on-year [2][3]. 2. New Business Value: The new business value continued to grow significantly, indicating resilience in the liability side. The increase was attributed to product structure optimization and improved expense ratios, leading to enhanced investment yield [3][4]. 3. Agent Channel Performance: The agent channel achieved a premium income of 16.1 billion yuan, up 31% year-on-year. The new premium for regular payments was 10.6 billion yuan, with a growth rate of 25.4% [4][5]. 4. Agent Productivity: The average first-year premium and first-year commission for agents increased by 34% and 10.14% respectively, indicating continuous improvement in agent productivity [5][6]. 5. Bank Insurance Channel: The bank insurance channel saw a decline in new premiums to 8.7 billion yuan, down 22% year-on-year, primarily due to a high base from the previous year and reduced sales personnel motivation [6][7]. 6. Property and Casualty Insurance: CPIC's property and casualty insurance segment reported a premium income of 62.5 billion yuan, an 8.6% increase year-on-year, with non-auto insurance being the main growth driver [7][8]. 7. Combined Ratio: The overall combined ratio for CPIC was 98%, showing a 0.4 percentage point improvement year-on-year, despite significant disaster impacts [8][9]. 8. Investment Performance: The annualized net investment yield was 3.2%, stable year-on-year, while the total investment yield was 5.2%, down 0.4 percentage points [10][11]. 9. Future Outlook: CPIC is expected to see a 14% year-on-year growth in scale net profit for 2024, with a target price maintained at 40 yuan, reflecting confidence in the company's fundamentals [12][13]. Key Points on China Life Insurance (CLI) 1. Transition to New Standards: CLI has fully transitioned to new accounting standards in 2024, ceasing to disclose data under old standards [14][15]. 2. Credit Value Growth: The credit value increased by 26.3% year-on-year, while net profit under the new standards was 20.6 billion yuan, down 25% year-on-year [15][16]. 3. Premium Income: CLI's total premium income was 74.8 billion yuan, a 4.7% increase year-on-year, with long-term policies (10 years and above) growing by 25.4% [16][17]. 4. Agent Workforce: The individual insurance agent workforce decreased by 12,000 to 622,000, but the decline is narrowing, indicating potential stabilization [18][19]. 5. Investment Returns: CLI's annualized net investment yield was 2.82%, with total investment yield at 3.23%, both showing slight year-on-year declines due to lower interest rates [20][21]. 6. Investment Asset Growth: The investment asset scale reached 5.93 trillion yuan, a 4.8% increase from the beginning of the year, contributing to a 7.2% year-on-year growth in total investment income [22][23]. 7. Profit Outlook: CLI's net profit is expected to improve as the capital market recovers, with a positive growth forecast for 2024 [26]. Comparative Insights - Both CPIC and CLI are positioned favorably within the industry, with CPIC showing stronger performance in both liability and profit metrics. The overall sentiment for the insurance sector remains optimistic, with expectations of valuation recovery driven by improvements in the asset environment [27][28].