"No matter what knowledge or habit is formed, it will be deeply rooted in the heart, just like the railroad tracks are firmly embedded in the earth, and it does not need to be renovated or deliberately rebuilt, but it sinks into the depths of the subconscious. ”
The words of Joseph Schumpeter, the "father of innovation theory", could not be more apt to describe the insurance industry. From the public's point of view, insurance awareness has long been "deeply rooted in the heart", which is the underlying logic and strong driving force for the sustained growth of the mainland insurance industry.
The same is true for the data. According to the latest data released by the State Administration of Financial Supervision and Administration, in 2023, the insurance industry will achieve 5.12 trillion yuan in original insurance premium income, a year-on-year increase of 9.13% on a comparable basis, and the insurance industry's original insurance compensation expenditure will be 1.89 trillion yuan, a year-on-year increase of 21.94%.
According to the "14th Five-Year Plan", by 2035, the per capita GDP of the mainland will reach the level of moderately developed countries, which will double that of 2020, which also means that the insurance industry is in the most elastic growth range, and there is a lot to be done.
However, the vast market space does not mean that insurance companies can easily tap into it. As the public and the industry have felt, in recent years, the external financial and investment environment has changed, and the insurance industry is still in the "throes" of continuous reform.
Looking at domestic insurance companies, we find that the five major A-share listed insurance companies (including Ping An of China, Chinese People's Insurance, Chinese Life, China Pacific Insurance, and Xinhua Insurance) each have "diamond diamonds", handing over a weighty report card.
According to statistics, in 2023, the net profit attributable to the parent company of the five insurance companies will reach 165.517 billion yuan, with an average daily income of 453 million yuan, and the total premium income will be 2.69 trillion yuan, a year-on-year increase of 5.21%.
Among them, Ping An of China is particularly eye-catching. According to the annual report, in 2023, Ping An achieved a total revenue of 1,031.863 billion yuan, a year-on-year increase of 4.74%, and an operating profit attributable to the parent company of 117.989 billion yuan, of which the revenue of property insurance services under comparable caliber increased by 6.5% year-on-year, and the new business value of life and health insurance business increased by 36.2%.
Ping An's performance has attracted the attention and discussion of the industry, and the focus of this is how can insurers achieve high-quality growth and maximize long-term value in the face of the resilient growth of the insurance industry.
Focusing on these problems actually reflects the determination and determination of leading insurance companies to go through the cycle and achieve steady and long-term development, and being able to directly attack and solve these problems can not only set a benchmark in the industry, but also usher in high-quality development in the true sense.
High-quality growth: "Combination punch" consolidates growth certainty
In the face of the elastic growth of the industry, in order to tap as much market space as possible, insurers first need to implement high-quality growth, and this cannot rely on a single approach, but needs to "clench their fingers into a fist".
In fact, that's exactly what the major insurance companies are doing. According to an economist, despite the impact of the epidemic and other factors, insurance companies have made positive efforts in various aspects such as business transformation, innovation and development, and cost control, resulting in relatively stable performance.
The reality of the industry and the observations of economists show that in order to achieve high-quality growth and relatively steady development, insurance companies must play a good "combination punch".
From the perspective of dismantling, in this set of "combination punches", major insurance companies have their own focus. For example, on the product side, life insurance is the "basic disk", and in 2023, Ping An Life, Chinese Life, Taibao Life Insurance, Xinhua Insurance, and PICC Life Insurance will achieve a total original premium income of 1.61 trillion yuan, a year-on-year increase of 4.9%, but at the level of new business value that shows embedded value, there are different development momentum.
Among them, the one-year new business value of Chinese Life increased by 11.9% compared to the results of the same period in 2022 using the new economic assumptions, which Chinese Life said was "an indicator of the company's business potential", while the new business value of PICC Life increased by 69.6% year-on-year, which its management believes is mainly due to premium growth and structural optimization.
On the basis of premium growth and continuous optimization of the product system, Ping An has further unleashed the potential energy at the channel level.
According to Ping An, in 2023, the value of new business of life and health insurance business on a comparable basis increased by 36.2%, achieving double-digit growth for four consecutive quarters, mainly due to an 89.5% increase in the value of new business per agent, a 40.3% increase in the value of new business in the agent channel, and a 77.7% increase in the value of new business in the bancassurance channel after the reform.
The reason why Ping An was able to unleash the potential energy of the channel is that it has implemented channel reform since 2019 and has focused on improving the quality and professionalism of the agent team.
According to the data, as of 2023, the number of Ping An agents in China is less than one-third of its peak, but the degree of professionalism has jumped and the combat effectiveness is stronger, as evidenced by the significant increase in the per capita new business value of the above-mentioned agents. At the same time, the average monthly income of agents increased by 39.2% to 9,813 yuan during the same period.
It is not difficult to see that Ping An has abandoned the earlier "crowd tactics", improved human efficiency with professionalism, and won business increments with human efficiency.
In addition to products and channels, as a comprehensive financial group, another test for major leading insurance companies is that they need to face the complexity and changeability of the capital market. In 2023, the total investment income of the five major listed insurance companies will be 365.584 billion yuan, a year-on-year decrease of 17.31%, which shows the severity of the situation.
Specifically, there are also different development momentums. In 2023, the total investment income of Chinese People's Insurance Company, Chinese Life Insurance, China Pacific Insurance and Xinhua Insurance will all decline compared with the same period of the previous year, some of which will decline by more than 50%, while Ping An of China will achieve a total investment income of 123.899 billion yuan in the same period, an increase of 32.8% over the same period of the previous year.
When exploring the reasons for the decline in total investment income, some insurance companies said that it was mainly due to the implementation of new accounting standards and the overall decline in the stock market, which led to a decrease in related profits and losses. In fact, this is a situation that every listed insurance company will encounter, but their development momentum is different, and even Ping An is the only one that stands alone, in addition to the external environment, it is also closely related to its own investment philosophy and execution.
In short, in terms of investment philosophy, Ping An adheres to a stable value investment, with solvency as the core indicator and anchoring the stability of long-term investment returns. It is worth noting that this strategy not only enables it to maintain investment returns much higher than the industry average in the severe external environment, but also greatly reduces the pressure on the optimization and in-depth expansion of products and channels, and promotes the stable and long-term development of the core business.
Obviously, whether it is products, channels, or investment, it cannot be developed in isolation. Ping An's practice and achievements also show that high-quality growth is to play a good "combination of punches", improve in all aspects, and continue to consolidate the certainty of growth.
Maximizing long-term value: using technology to plug in the "new wings" of take-off
One of the "requirements" of high-quality growth is that insurance companies should not only achieve high growth for a while, but also pursue long-term value maximization.
The consensus in the industry is that in addition to playing a good "combination punch", it is also necessary to use the power of science and technology. As in an internal email to Ping An employees, founder Ma Mingzhe said, "As long as we keep up with the pace of technological innovation, technology will give us new wings to take off." ”
Judging from the actions and performance of the five major listed insurance companies, "financial technology" is a high-frequency word for each insurance company in the annual report, and in specific business, "financial technology" has also been increased to varying degrees.
Taking Chinese Life as an example, in 2023, it will fully launch the construction of financial technology digital engineering, optimize scientific and technological capabilities, strengthen scientific and technological empowerment, and emphasize "deep integration of technology and business and empower the company's operation and management in all fields".
Chinese has strengthened cutting-edge technology research and innovative applications, and continuously improved the digital intelligence level of business processes such as product development, product sales, investment management, and risk management. Among them, the PICC model was released, hoping to strengthen the empowerment of science and technology with the help of AI.
CPIC hopes to build a digital CPIC professional force, release digital employees based on large-scale model technology, and deepen the application of RPA technology to improve intensive operation efficiency.
In contrast, in the field of financial technology, Ping An is quite forward-looking and has also achieved long-term deep cultivation. Not to mention that in the early 90s of the last century, Ping An attached great importance to the use of IT technology, and in recent years, based on digital-related theories, Ping An has promoted a comprehensive digital strategy and operation, becoming the first leading financial enterprise in China to carry out digital transformation and achieve fruitful results, just looking at 2023, Ping An has consolidated its industry position with a series of "firsts", which has attracted the attention of the industry.
According to the White Paper on Patent Analysis in the Fintech Industry in 2023 and the White Paper on Patent Analysis in the Healthcare Industry in 2023 released by China Intellectual Property Publishing House in December 2023, Ping An ranks first in the total number of patent applications in the fintech industry, and ranks first in the number of patent applications for the use of artificial intelligence and big data technology in the fintech industry. Ping An also ranked first in the number of patent applications in digital business application scenarios, ranked first in the total number of patent applications in the medical and health industry, ranked first in the number of patent applications using artificial intelligence, blockchain and big data technologies in the medical and health industry, and ranked first in the number of patent applications in medical image processing, elderly care and intelligent consultation application scenarios in the medical and health industry.
Behind this is a "team battle" of a large number of scientific and technological talents. According to the annual report, Ping An has a first-class scientific and technological talent team of more than 20,000 scientific and technological developers and more than 3,000 scientists.
As a result, Ping An's hard technology has been applied to all aspects of its financial business, which has achieved good results in improving quality, increasing efficiency, and improving the level of risk control.
According to the data, in 2023, Ping An will intelligently guide customers to self-service renewal of 300.3 billion yuan, a year-on-year increase of 13%. Ping An also relied on the world's leading and Asia's largest backup service platform, with about 2.22 billion AI agent services and 10.82 billion yuan of intelligent claims interception and loss reduction, a year-on-year increase of 16.0%.
In terms of effect, technology empowerment not only improves the quality and efficiency of operations, but also raises Ping An's service barriers, and more importantly, injects strong momentum into Ping An's unique "integrated finance + medical pension" model, and continuously deepens user value, enterprise value and social value.
For example, the home-based elderly care service platform built by Ping An has created a "three-in-one" butler service model of intelligent housekeeper, doctor housekeeper and family housekeeper, which has obviously been empowered by science and technology, and thus comprehensively covers the needs of medical and elderly care.
According to the data, Ping An's home care services have covered 54 cities across the country, with a total of more than 80,000 customers qualified for home care services, and a complete home care service system has been established, which can provide more than 600 home rehabilitation and live-in care services such as "worry-free care".
It is under the "integrated finance + medical pension" model that Ping An provides abundant, efficient and professional services, including home-based elderly care, so that users can obtain a "worry-free, time-saving, and money-saving" consumption experience, and further explore user value and release the overall value of the medical and elderly care ecosystem.
By the end of 2023, the number of individual customers of Ping An Group was 232 million, an increase of 2.2% from the beginning of the year, and among the 232 million individual customers, nearly 64% of the customers used the services provided by the medical and elderly care ecosystem at the same time, with an average of about 3.37 contracts and an average AUM of 55,900 yuan, which were 1.6 times and 3.5 times that of individual customers who did not use the services of the medical and elderly care ecosystem, respectively.
In the Ping An ecosystem, user value, enterprise value and social value complement each other and work synergistically. It is foreseeable that with the combination of "combination punch" and technological advantages, Ping An will maximize its long-term value with continuous advancement.
For investors, both high-quality growth and long-term value maximization will enable Ping An to have greater room for value growth.
For Ping An, "greater room for value growth" is a certain inevitability. At the results conference, Guo Xiaotao, co-CEO of Ping An Group, said bluntly: "Ping An's comprehensive financial + medical pension strategy is consistent and clear, with stable main business and strong execution, Ping An will bring value returns to the capital market in the future." ”
Looking back on the past, in the past 10 years, Ping An's average comprehensive investment return rate was 5.4%, exceeding the assumption of long-term return on investment of embedded value, demonstrating its investment strength through the cycle.