National Life VS Ping An Third Quarterly Report: Manpower decreased by 30%, and the value of new business decreased by 20%.

On October 27 and 28, Ping An and China Life released the third quarter report of 2021 after the stock market closed on the same day, basically setting the tone of the annual business trend. From the performance of the two, in some core indicators to maintain the pace of basic consistency, personal agent manpower fell by about 30% year-on-year; the value of new business also fell by about 20%; in terms of net profit attributable to the mother, China Life performed slightly better, an increase of 3% year-on-year, and Ping An fell by more than 20%.

Although from the perspective of business performance, the transformation situation is still grim, but from the reflection of the capital market, the bearishness of the life insurance industry may have been exhausted, because just the day after Ping An released the third quarter report, many securities companies still gave buy, overweight and even highly recommended ratings.

The third quarterly report was released, and the value of new business in the life insurance business of China Life and Ping An fell by 20% and 18% year-on-year.

On October 27 and 28, Ping An of China and Chinese Shou successively disclosed three quarterly reports.

In terms of operating income, Chinese Life and Ping An of China performed "one rise and one drop". In the first three quarters, Chinese Life achieved operating income of 727.711 billion yuan, an increase of 5.2% year-on-year, of which the operating income in the third quarter was 175.110 billion yuan, down 1.5% year-on-year;

Ping An's operating income in the first three quarters was 904.629 billion yuan, a year-on-year decrease of 1.36%, of which the operating income in the third quarter was 268.98 billion yuan, down 6.3% year-on-year.

In terms of profits, Chinese Life and Ping An of China's performance is also "one rise and one fall". According to the data, in the first three quarters of this year, Chinese Life achieved a net profit attributable to the mother of 48.502 billion yuan, an increase of 3% year-on-year; while the net profit attributable to Ping An of China was 81.638 billion yuan, down 20.8% year-on-year, mainly affected by adjustments such as the impairment of Huaxia Happiness-related investment assets.

It is worth noting that in the single quarter, the net profit of Chinese Life in the third quarter has also decreased, affected by the update of the discount rate assumption of traditional insurance reserves, its net profit attributable to the mother is 7.527 billion yuan, down 54.5% year-on-year; in the same period, affected by the fluctuations in the capital market, in the third quarter, Ping An of China achieved a net profit attributable to the mother of 23.633 billion yuan, down 31.2% year-on-year.

Although the net profit attributable to the mother declined, Ping An of China achieved a parent-attributable operating profit of 118.737 billion yuan, an increase of 9.2% year-on-year. It is worth noting that due to the decline in the growth rate of new business, the fluctuation of the policy continuation rate, and the higher compensation difference caused by the reduction of customer claims under the new crown pneumonia epidemic in the same period last year, Ping An Life insurance and health insurance business achieved an operating profit of 73.684 billion yuan, down 2.3% year-on-year.

From the perspective of total premium income, Chinese life premium growth is weak, and Ping An of China is in a negative growth dilemma.

Specifically, in the first three quarters, Chinese Life achieved a premium income of 553.437 billion yuan, a slight increase of 1.8%. Among them, the renewal premium reached 392.201 billion yuan, an increase of 6.4% year-on-year. Short-term insurance premiums reached MOP67.945 billion, an increase of 1.6% year-on-year, and the details of new policy premiums have not yet been disclosed.

Judging from the recent premium announcement disclosed by Ping An of China, in the first three quarters, its original insurance premium income was 591.34 billion yuan, down 5.58% year-on-year.

Among them, ping an life insurance premium income of 364.535 billion yuan, down 3.46% year-on-year; Ping An Property & Casualty original insurance premium income of 199.343 billion yuan, down 9.18% year-on-year; Ping An pension original insurance premium income of 18.206 billion yuan, down 16.38% year-on-year; and Ping An Health original insurance premium income of 9.256 billion yuan, an increase of 24.09% year-on-year.

From the perspective of manpower, Chinese Life and Ping An of China personal insurance sales manpower have both been frustrated. As of September 30, Chinese Life's total sales force was 1.052 million, down 36.7% from 1.662 million in the same period of 2020. Among them, the sales manpower of personal insurance was 980,000, a decrease of 38% from 1.581 million in the same period of 2020.

As of September 30, the number of sales agents of Ping An Personal Life Insurance of China was 706,200, down 31% from 1,048,500 in the same period of 2020.

The sharp decline in the number of agents has seriously dragged down the value of the company's new business in the same period. In the first three quarters, the value of new business in Chinese Life decreased by 19.6% year-on-year, and the value of new business of Ping An Life insurance and health insurance of China was 35.237 billion yuan, down 17.8% year-on-year.

On the investment side, in the first three quarters, Chinese Life achieved a total investment income of 165.695 billion yuan, an increase of 12.8% year-on-year, and a total investment yield of 5.25%; the net investment income reached 139.203 billion yuan, an increase of 13.4% year-on-year, and the net investment yield was 4.40%. As of the end of the third quarter, the total assets of Chinese Life were 4.73 trillion yuan, an increase of 11.3% over the end of the previous year.

As of September 30, Ping An Group's total assets exceeded the 10 trillion yuan mark for the first time, reaching 10.08 trillion yuan, and the scale of the insurance capital portfolio was nearly 3.9 trillion yuan, an increase of about 3% over the beginning of the year. In the first three quarters, the annualized net investment yield of the insurance fund portfolio was 4.2%, down 0.3 percentage points year-on-year; the annualized total investment return was 3.7%, down 1.5 percentage points year-on-year.

A number of brokers have given positive ratings, and the life insurance industry has exhausted its profits?

According to a news from the National Climate Center, since July this year, the equatorial Middle East Pacific SST has continued to decline, and it is expected to enter the La Niña state in October, and form a weak to moderate intensity La Niña event in the winter, coupled with the La Niña event that last winter last year to this spring, 2021 will most likely become a rare "double La Niña year". This means that this year's winter will still be a cold winter.

This resonates to some extent with the current situation of the domestic life insurance industry, which is already obvious in terms of the performance of giant insurance companies China Life and Ping An in the first three quarters. The performance of the two major life insurance giants has become the most true portrayal of this cold winter in the insurance industry. But for capital markets, the toughest moments may be over.

Ping An of China released its third quarterly report on the 27th, on October 28, its Hong Kong stocks fell by more than 3% at one point, and finally closed at 58.35 Hong Kong dollars, down 2.42%; A shares finally closed at 51.3 yuan, down 0.68%.

In fact, due to weak performance, Ping An's stock price has been sluggish this year, of which the A-share stock price once fell below the 50 yuan mark. As of the close of trading on the 28th, ping an A-share shares of China have fallen by about 40%, and the situation of H-shares is similar.

This has been accompanied by a sharp decline in market value, compared with the market value of 16,000 yuan of A shares at a higher point, and now it is only more than 900 billion yuan.

However, perhaps for the current capital market, Ping An's bearishness has been exhausted, and statistics show that in the past 90 days, a total of 23 institutions have given ratings, 20 buy ratings, and 3 overweight ratings; the average target price of institutions in the past 90 days has been 73.67.

Just after the release of the third quarterly report, many institutions still give buy, overweight and even strongly recommended ratings. Among them, Everbright Securities predicts that Ping An of China's net profit attributable to the mother in 2021 will be 143.5 billion yuan, an increase of 0.28% year-on-year.

The situation of Chinese life is also similar, and it is also worth paying attention to how the capital market will reflect on its three quarterly reports on the 29th. The stock price of Chinese Life A shares has also fallen by 18% compared with the end of last year, and the cumulative decline of H shares has exceeded 14%.

It can be seen that both companies are continuing to work hard to promote transformation, in the third quarterly report, Chinese Shou said that with the continuous deepening of the customer-centric "one-piece diversified" sales layout, the company adheres to the road of effective team-driven business development, compacts the size of the team, strengthens the basic management, and consolidates the foundation for the high-quality development of the team.

Ping An Life Insurance said that it will deepen the transformation of agent channels, and at the same time promote the coordinated development of multiple channels such as bancassurance and power grid sales. Among them, in terms of agent channels, we will further promote the hierarchical operation of the agent team. The first is to continue to improve the performance system, consolidate the basic management, and integrate the company's resources to empower the diamond team; the second is to strengthen the operation level of the sales department through digitalization and standardized management, improve the income of the team, and stabilize the potential team; the third is to gradually increase the proportion of high-quality newcomers through the implementation of the "excellent +" recruitment and cultivation plan.

Ping An believes that under the background of profound changes in the economic environment at home and abroad, the company's business development contains new long-term opportunities. On the one hand, the demand for residents' health awareness, medical management and old-age services has gradually strengthened, the consumer demand for insurance, health management and other aspects has been continuously released, and the company's financial and insurance business has a broad space for development; On the other hand, driven by policies and technologies, the demand for digital transformation is increasingly strong, and the company has accelerated model innovation in the fields of finance and medical care to empower business growth.

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