Although premium growth slowed in the fourth quarter of last year, the insurance industry still maintained a strong growth momentum in 2023.
Recently, the State Administration of Financial Supervision and Administration disclosed the operation of the insurance industry in 2023. According to the data, in 2023, the insurance industry will achieve 5.12 trillion yuan in original insurance premium income, a year-on-year increase of 9.14%, an increase of 4.56 percentage points from 2022, which is also the second consecutive year of growth in original insurance premium income since the deep transformation of the insurance industry.
By the end of 2023, the total assets of the insurance industry reached 29.96 trillion yuan, a year-on-year increase of 10.35%, and the balance of capital utilization reached 27.67 trillion yuan, a year-on-year increase of 10.47%.
Life insurance company premiums increased by more than 10%
The increase in premiums in the insurance industry is due to the simultaneous efforts of life insurance and property insurance, among which the performance of life insurance business is particularly prominent.
According to the data, in 2023, life insurance companies will achieve 3.54 trillion yuan in original insurance premium income, a year-on-year increase of 10.25%, of which the fastest growth rate is in life insurance business, with original insurance premium income reaching 2.76 trillion yuan, a year-on-year increase of 12.75%. In addition, health insurance increased by 2.97% year-on-year.
From the perspective of premium trends, the life insurance business in 2023 has generally experienced a development path of bottoming out, rapid growth, and phased decline.
Taking Chinese Life, the largest life insurance company in terms of premiums, as an example, the company's premium income in the first three months, the first six months, the first nine months and the first 12 months of 2023 increased by 3.9%, 6.9%, 4.5% and 4.3% year-on-year.
In the second quarter of 2023, catalyzed by the withdrawal of insurance products with a predetermined interest rate of 3.5%, the gradual implementation of agent transformation and reform, the improvement of the sales environment, and the continuous development of integrated channels such as bancassurance, the life insurance business ushered in a wave of small growth peaks. However, after August, with the implementation of the scheduled interest rate switch and the implementation of the integration of bancassurance channels and banks in September, the growth rate of life insurance premiums has dropped in stages.
From the perspective of business quality, the structural optimization and transformation of life insurance companies are more resolute. Taking PICC Life Insurance as an example, the company's first-year premium for long-term insurance in 2023 increased by 11.1% year-on-year, the term renewal increased by 6.6% year-on-year, and the growth of short-term insurance increased by only 2.1% year-on-year.
According to the analysis of Founder Securities, in terms of savings products, residents have a strong demand for savings. In terms of protection products, medical resources are tight for the high incidence of influenza in the short term, and health insurance sales will continue to pick up, and the industry's NBV (new business value) is expected to maintain double-digit growth in the first quarter of 2024.
The growth rate of property and casualty insurers' premiums has slowed
P&C insurer premium growth remained solid in 2023, albeit at a slower pace than the same period in 2022.
According to the data, in 2023, property insurance will achieve 1.59 trillion yuan in original insurance premium income, a year-on-year increase of 6.73%, which is slower than the growth rate of 8.71% in 2022.
In 2023, property and casualty insurers will achieve significant growth in most of their major insurance types. Among them, the original insurance premium income of motor insurance reached 867.3 billion yuan, a year-on-year increase of 5.64%, agricultural insurance grew the fastest, with a year-on-year increase of 17.31%, and health insurance and liability insurance increased by 10.89% and 10.45% year-on-year respectively.
Taking PICC property insurance as an example, in terms of insurance types, PICC property insurance will achieve auto insurance premiums of 285.626 billion yuan in 2023, a year-on-year increase of 5.3%, and a growth rate of 6.2% in the same period in 2022. Non-motor insurance business increased by 7.4% year-on-year, while agriculture, freight and other insurance types performed well, with year-on-year growth of 11.9%, 11.4% and 30.2%, respectively.
According to the previous analysis of Pacific Securities, looking forward to 2024, the Passenger Association expects that the penetration rate of new energy vehicles will increase from 35% to 40%, driving the overall sales of passenger cars to increase by 5%, and car insurance may grow simultaneously. Non-auto insurance benefited from a low base and policy support in subdivided areas in 2023 to achieve double-digit growth. It is expected that the overall property and casualty insurance will achieve high-single-digit growth, and the combined ratio is also expected to be optimized under the high base and disaster clearance.
It is worth mentioning that while the premiums are growing rapidly, the insurance industry's compensation expenditure will also increase rapidly in 2023, with the original insurance compensation expenditure reaching 1.89 trillion yuan, a year-on-year increase of 21.94%. Among them, the property insurance compensation expenditure was 917.1 billion yuan, a year-on-year increase of 18.22%, and the life insurance compensation expenditure was 971.2 billion yuan, a year-on-year increase of 25.67%.
This is also evident in the combined ratio performance of insurers. Judging from the third quarterly report of listed insurance companies, the loss ratio of listed insurance companies has increased to varying degrees due to the low base in the same period of 2022 and the impact of natural disasters. In the first three quarters of 2023, PICC P&C's underwriting combined ratio increased by 1.7% year-on-year to 97.9%, Ping An P&C's underwriting combined ratio increased by 1.6 percentage points year-on-year to 99.3%, and CPIC's P&C underwriting combined ratio increased by 1.0 percentage points year-on-year to 98.7%.