Semi-annual performance assessment of bank-based insurance companies: premium growth accelerated by more than 280 billion, and CITIC Prudential Life Insurance lost more than 3 billion

(Image source: Visual China)

Blue Whale News, August 2 (Reporter Shi Yu) The solvency reports of non-listed insurance companies in the second quarter have been disclosed one after another, and the half-year performance has surfaced. Blue Whale News noticed that the performance of bank-based insurance companies showed signs of overall recovery. In terms of premium income, the 10 companies collected a total of 284.8 billion yuan in premiums, a year-on-year increase of 16%, and China Post Life continued to lead the way, with premiums exceeding 100 billion yuan, but the premium income of CCB Life, Sun Life Everbright and CITIC Prudential Life Insurance shrank year-on-year in the same period.

In terms of profits, China Post Life Insurance, which suffered a large loss last year, achieved a net profit of 5.69 billion yuan in the first half of the year, mainly due to the "step-by-step implementation of new accounting standards, forward-looking optimization of capital and liability matching and asset structure", while ABC Life Insurance achieved a large increase in net profit, with a net profit of 1.121 billion yuan, a year-on-year increase of 883.33%. CITIC-Prudential Life Insurance and Everbright Life Insurance were in a loss predicament in the first half of the year, of which CITIC Prudential Life Insurance suffered a loss of 3.44 billion yuan, mainly related to factors such as the increase in insurance liability reserves due to the continuous decline in market interest rates and the high volatility of the equity market.

Bank-based insurance companies collected 284.8 billion premiums in the first half of the year, an increase of 16% year-on-year

From the perspective of premium data performance, in the first half of the year, the 10 bank-affiliated insurance companies achieved a total premium income of 284.8 billion yuan, a year-on-year increase of about 16 percentage points, compared with the overall growth rate of about 5% in the life insurance industry, the performance is better. China Post Life Insurance continued to lead, with premium income exceeding 100 billion yuan in the first half of the year, reaching 105.354 billion yuan, a year-on-year increase of 20.3%. ICBC AXA Life Insurance then collected premiums of 30.75 billion yuan, a year-on-year increase of 17%.

CCB Life Insurance, China Merchants Cigna Life Insurance and ABC Life Insurance all had premiums of more than 20 billion yuan in the first half of the year, but their year-on-year performance was different. CCB Life's premium income was 27.5 billion yuan, ranking third among bank-based insurance companies, but it fell by 4.29 percentage points year-on-year. China Merchants Cigna Life Insurance and ABC Life Insurance both increased significantly, with year-on-year increases of 26.79% and 39.9% respectively, corresponding to 26.682 billion yuan and 26.257 billion yuan in premiums.

The premiums of BOC Samsung Life Insurance, CITIC Prudential Life Insurance, BOCOM Life Insurance and Sun Life Everbright Life Insurance all exceeded 10 billion yuan in the first half of the year. Among them, the premium income of CITIC Prudential Life Insurance and Sun Life Everbright Life Insurance contracted by 0.6% and 4.86% respectively. Although the premium of Sino-Dutch Life Insurance failed to cross the threshold of 10 billion yuan in the first half of the year, at 9.318 billion yuan, it increased by about 37% year-on-year, which was higher than the industry average.

Since the second half of 2023, the bancassurance channel has been promoted by the "integration of newspapers and banks", and the relevant commissions have dropped by about 30%. Industry insiders pointed out to Blue Whale News that "under the rules of integration of newspapers and banks, the impact of equity relations on the cooperation between banks and insurance companies is obviously more prominent, and the cost of sales of bank-based insurance companies is expected to be further strengthened under the condition that commissions are subject to stronger rules." “

In April this year, the regulator lifted the "1+3" limit on the number of cooperation between bank branches and insurance companies, which challenged bank-based insurance companies to get rid of their dependence on shareholders as soon as possible, diversify their development channels and enrich their product supply capacity.

On the one hand, it is the main path for bank-based insurance companies to upgrade their product structure and carry out value transformation with the help of the advantages of bancassurance channels, and on the other hand, to accelerate the layout of diversified channels. China Post Life Insurance, whose premiums exceeded 100 billion yuan in the first half of the year, concluded at the semi-annual work symposium that the main channel of the postal bank has realized the transformation from passive dependence and administrative promotion to active empowerment and leading leadership, and the three-dimensional empowerment system has been accelerated; The construction of multiple channels has blossomed, and the proportion of new channels has continued to increase.

Under the implementation of the new accounting standards, the profit performance of some insurance companies has picked up, with a total net profit of more than 5 billion

In terms of profits, judging from the data, the 10 bank-based insurance companies achieved a total net profit of 5.05 billion, which was better than the loss in the same period last year. Among them, 6 achieved a year-on-year increase in net profit, 2 turned into a profit, and 2 suffered losses in the previous year.

China Post Life achieved a net profit of 5.69 billion yuan in the first half of the year, ranking first among bank-based insurance companies, and second compared with non-listed life insurance companies as a whole, after Taikang Life. Compared with the net loss of 2.881 billion yuan in the first half of last year, the change is obvious.

From a huge loss in 2023 to a profit this year, it is related to the implementation of new accounting standards by China Post Life. Since the first quarter of this year, China Post Life Insurance has disclosed net profit and other data in accordance with the new accounting standards, and said at the time, "As the first non-listed insurance company to implement the new accounting standards step by step, it has forward-looking optimized the matching of assets and liabilities and asset structure, so that the profit indicators and solvency in the first quarter of this year have improved, and the sustainable operation ability has been further enhanced." "From the perspective of new business value, in the first half of the year, under the business transformation, the new business value of China Post Life Insurance was 8.02 billion yuan, a year-on-year increase of 16% on a comparable basis.

CCB Life Insurance also came out of the loss, achieving a net profit of 599 million yuan in the first half of the year. ABC Life's net profit in the first half of the year increased by 883% year-on-year, with a net profit of 1.121 billion yuan. The net profit of Sino-Dutch Life Insurance and BOCOM Life Insurance increased by more than 100%, and the net profit of 16 million yuan and 777 million yuan respectively in the first half of the year was achieved.

CITIC Prudential Life Insurance and Sun Life Everbright Life fell into the red. In the first half of the year, CITIC Prudential Life had a net loss of 3.44 billion yuan, ranking first in the industry.

Under the current accounting standards, the insurance liability reserve is calculated based on the 750-day moving average Treasury yield curve; The 750-day moving average Treasury yield curve will accelerate in 2024, increasing pressure on life insurers to raise reserves. It is reported that the loss of CITIC Prudential Life in the first half of the year is related to the increase in insurance liability reserves due to the continuous decline in the aforementioned market interest rates and the high volatility of the equity market. At present, CITIC Prudential Life adopts the old accounting standards, and after the implementation of the new accounting standards, it is expected that the performance of net profit will improve.

Sun Life Everbright posted a net loss of RMB867 million in the first half of the year. In 2022 and 2023, Sun Life Everbright will have a total loss of about RMB2 billion, and at the end of March this year, Sun Life Everbright announced that Liu Fengquan will no longer serve as the general manager of the company, and Sun Qiang, chairman of the board, will serve as the interim head of the company.

In response to the downward pressure on solvency amid continuous losses, Sun Life Everbright said that in the second quarter of 2024, it will further strengthen the forward-looking and timely management of solvency, formulate a capital replenishment plan, promote the implementation of the capital increase plan in an orderly manner, and actively seek exogenous capital replenishment to consolidate its capital strength. Under the current situation of high capital pressure, the solvency contingency plan has been studied and formulated to meet the solvency requirements under extreme stress scenarios and buy time for capital increase.

The relevant person in charge of a bank-based insurance company told Blue Whale News that there is no such a big gap in the fundamentals of the industry, and the profit performance is related to the pace of the implementation of the new accounting standards by insurance companies. Insurance companies need to focus on reform and transformation, steadily promote the optimization of product structure and channel layout, and achieve high-quality development.

"With the further acceleration of the downward trend of interest rates and the implementation of policies such as the opening of banks' 1+3 outlets, the internal and external environment for development will be more complex, and the competition in the industry will become more and more fierce." Recently, a number of bank-affiliated insurance companies held a mid-year work conference to plan and layout their business in the second half of the year.

As proposed at the semi-annual work conference of ABC Life, in the second half of 2024, the company should focus on value and efficiency, adhere to connotative development, characteristic operation and refined management, focus on the achievement of various key business indicators, adhere to the source of protection, continuously increase the proportion of protection business, and increase the development of pension finance and services for the "three rural" areas. ICBC AXA Life Insurance proposes to actively do a good job in the integration of bancassurance, group insurance, asset management and bank-related lines, and focus on building and implementing the bank-to-company integration plan. (Blue Whale News, Shi Yu, [email protected])