Although the insurance industry is facing pressure, the overall trend is positive
The operations in the first three quarters of the top five A-share listed insurers in China were all revealed by 3 November 2022, which are China Life Insurance Company Limited (Chinese: 中国人寿, China Life, 601628:SH), Ping An Insurance (Group) Company of China, Ltd. (Chinese: 中国平安, PingAn, 601318: SH), The People's Insurance Company (Group) of China Limited (Chinese: 中国人保, PICC, 601319:SH), China Pacific Insurance (Group) Co., Ltd. (Chinese: 中国太保, CPIC, 601601:SH), and New China Life Insurance Company Ltd.(Chinese:新华保险, NCI, 601336:SH)。
In terms of net profit, in the first three quarters of 2022, PICC's net profit increased by 13.1% year-on-year, while the remaining four insurers all experienced different degrees of decline, especially NCI, which decreased by a large margin of 56.6%, China Life's net profit dropped by 35.8%, PingAn declined by 6.3%, and CPIC fell by 10.6%.
NCI stated that the decrease in profit was mainly due to the decrease in investment income in the current period due to the impact of the capital market downturn, which led to the reduction in net profit in the current period year-on-year, despite the high base of net profit in the same period last year.
In terms of different businesses, general insurance performed significantly better than life insurance. In the first three quarters of 2022, PICC's property and casualty insurance, CPIC's general insurance and PingAn's general insurance saw premium income increase by 10.2%, 12.5% and 11.4% year-on-year, respectively. On the other hand, some companies still saw significant declines in the value of their life insurance business. However, CPIC's life insurance has turned negative to positive business value growth in the third quarter.
Junsheng Zhu, an industry expert, said that although the life insurance business is under pressure, the industry is generally optimistic. In an increasingly uncertain situation, people have a demand to increase the allocation of defensive assets. Therefore, the competitive advantage of a more certain product like insurance will also be more obvious.