At present, 10 bank-affiliated insurance companies have fully disclosed the "Solvency Report for the Fourth Quarter of 2023". From the perspective of the scale of premium income, 7 rose and 3 declined, and China Post Life Insurance (hereinafter referred to as "China Post Life") became the "first brother" of bank-based insurance companies with a premium income of 109.866 billion yuan, which is also the first time that its premium income exceeded 100 billion.
From the perspective of net profit scale, 4 of the 10 bank-based insurance companies rose and 6 declined, and China Post Life Insurance had a net profit loss of 11.468 billion yuan last year, becoming the "loss king" among bank-based insurance companies. From the perspective of net profit changes, China Post Life Insurance fell by 2987.67% year-on-year, which was 12 times the average net profit decline of 10 bank-based insurance companies of 237%.
It is worth mentioning that BOC Samsung's net profit increased by 929.6% last year, ranking first among 10 insurance companies, mainly due to its net profit in 2022 falling by 94% to 0.08 billion yuan. In 2023, BOC Samsung's net profit will be 80 million yuan, a significant increase from 2022, while there is still a 68% gap from its 2021 net profit of 134 million yuan.
If China Post Life Insurance and Bank of China Samsung are excluded, the average net profit decline of the remaining 8 insurance companies is 38.68%. The net profit of China Post Life Insurance fell by 2987.67%, which was 77 times the average decline of the eight insurance companies.
It lost money for the first time in nearly a decade, with a loss of more than 11.4 billion yuan a year
Founded in August 2009, China Post Life Insurance is mainly engaged in life insurance, health insurance, accident insurance and other life insurance businesses.
Phoenix Finance combed Wind data and found that China Post Life failed to achieve profitability in the first five years after its establishment, and from 2014 to 2019, China Post Life's net profit gradually climbed from 23 million yuan to 1.688 billion yuan, and 2019 was also its first performance inflection point. In the following year, China Post Life's net profit fell 22% to 1.316 billion yuan, while in 2021, net profit increased by 6.6% year-on-year to 1.403 billion yuan, and the net profit has always maintained a scale of more than 1 billion yuan in the three years from 2019 to 2021.
The second performance inflection point came in 2022. In that year, China Post Life's net profit was 397 million yuan, which was not an order of magnitude compared with 1.403 billion yuan in 2021. In this regard, China Post Life's explanation is that "it is affected by the comprehensive impact of the capital market and the decline in the discount rate of traditional insurance reserves".
The third performance inflection point is that in 2023, China Post Life will have a net profit loss of 11.468 billion yuan, which is the first loss since its profit in 2014.
On March 29, 2024, United Credit issued the "Credit Rating Announcement" on China Post Life, showing that there are two main reasons for China Post Life's huge losses in 2023, one is due to the increase in reserves due to the downward trend of the 750-day treasury bond yield curve, and the other is that the investment income is less than expected.
From the perspective of the increase in reserves, China Post Life responded to the media and said, "In 2023, the discount rate of reserves will directly reduce the profit of China Post Life by 11.21 billion yuan." ”
In other words, excluding the impact of the increase in reserves, China Post Life Insurance still has a loss of 258 million yuan, compared with a profit of 400 million yuan in 2022, and its profit in 2023 will still fluctuate significantly. According to the Credit Rating Announcement of United Credit, "investment income is less than expected" or the main reason.
According to the "Solvency Report for the Fourth Quarter of 2023" of China Post Life, in 2023, the comprehensive investment return rate of China Post Life Insurance Company will be 3.01%, ranking second to last among bank-based insurance companies, 1.75 percentage points behind the average comprehensive investment return rate of 10 insurance companies of 4.76%, and the investment return rate will be 2.7%, ranking third from the bottom among bank-based insurance companies, 0.93 percentage points behind the average investment return rate of 10 insurance companies of 3.63%.
Surrender payments increased by 12.6% year-on-year in the first three quarters of last year
Judging from the information disclosure reports over the years, almost all of China Post Life's premium income comes from bancassurance channels.
In 2022, China Post Life's bancassurance channel revenue was RMB90.803 billion, accounting for 99.3% of the total premium income. It is worth mentioning that the short-term insurance business income for the year was -2 million. In this regard, China Post Life explained that "the negative premium income of short-term insurance business is mainly due to the impact of surrender. ”
Phoenix Finance combed Wind data and found that in the first three quarters of last year, the surrender amount of China Post Life Insurance further increased. In the first three quarters of 2023, the surrender benefits of China Post Life Insurance were 2.559 billion yuan, 1.764 billion yuan, and 1.708 billion yuan respectively, totaling 6.031 billion yuan, an increase of 12.6% year-on-year compared with the total surrender benefits of 5.356 billion yuan in the first three quarters of 2022, and 88.6% of the annual surrender benefits of 6.806 billion yuan in 2022.
Specifically, the top three products in the surrender amount and surrender rate of China Post Life are all products sold through the Silver Post channel. Among them, the cumulative surrender scale of China Post Fortune Plus C Dual Insurance (Participating Type) in 2023 will be as high as 3.082 billion yuan, and the annual cumulative surrender rate will be 1.98%. In 2023, China Post Good Cai Shoujia Pension Insurance will have a total surrender of 39.9645 million yuan, with an annual cumulative surrender rate of 19.52%.
In addition, China Post Life's latest comprehensive risk rating is BB, and although its solvency is in a state of compliance, it is far behind the industry average.
As of the end of 2023, the comprehensive solvency adequacy ratio of China Post Life was 160.38%, 36.72 percentage points behind the average comprehensive solvency adequacy ratio of the insurance industry of 197.1% in the same period, and the core solvency adequacy ratio was 86.18%, 42.02 percentage points behind the average core solvency adequacy ratio of the insurance industry of 128.2% in the same period.
In January this year, China Post Life Insurance held the 2024 work conference. The meeting emphasized that in 2024, China Post Life Insurance Sector should accelerate transformation and upgrading, strengthen the linkage of assets and liabilities, achieve double improvement in market leading position and operating efficiency, and continue to improve investment capacity and investment income in the investment sector.
In the future, whether China Post Life can boost its performance and turn losses into profits, and whether its solvency can catch up with the average level of the insurance industry as soon as possible, Phoenix Finance will continue to pay attention.