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The shareholding of foreign-funded PICC increased by 125% compared with the end of last year

Date: 2022-05-17
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Recently, the intensive repurchase of Ping An in China has attracted the attention of the market.

In fact, since the beginning of this year, foreign capital has also intensively increased some insurance stocks. According to the 'Securities Daily' reporter, as of May 15th this year, foreign capital (northbound capital) has added positions to PICC, China Pacific Insurance and New China Life Insurance. Among them, the shareholding of PICC increased by 125% compared with the end of last year.

The insurance sector plunged 39% last year. Since this year, the insurance sector has not stopped falling, falling by 14.49% during the year. Among them, New China Life Insurance dropped by as much as 27.29%. Comparatively speaking, among the top five insurance stocks, PICC's share price is relatively resilient, falling by only 1.7% throughout the year, making it the smallest decline in the A-share insurance sector.

Life insurance industry is depressed, property insurance industry is recovering.

Different from the general increase of insurance stocks last year, since this year, foreign capital's holding strategies for insurance stocks with different business types have changed: increasing the positions of stocks with emphasis on property insurance business and reducing the positions of stocks with emphasis on personal insurance business.

The change of foreign ownership reflects this feature. According to the data of Chioce, as of May 15th this year, the holdings of foreign capital in PICC, New China Life Insurance, China Pacific Insurance, Ping An and China Life Insurance increased by 125%, 16.5%, 0.1%, -10.9% and -19.3% respectively compared with December 31st last year. Among them, the main business of PICC, which has the highest increase ratio of foreign shareholding, focuses on property insurance business, while China Life only deals in personal insurance business.

This position adjustment feature of foreign capital is also consistent with the current development situation of domestic insurance industry, that is, the insurance premium growth rate of life insurance industry has not yet bottomed out and rebounded, while the property insurance industry shows signs of recovery.

In the first quarter, the total original premiums of China Life Insurance, Ping An Life Insurance Company of China Insurance, New China Life Insurance Insurance and PICC Life Insurance reached 701.704 billion yuan, a slight increase of 0.28% year-on-year; The total premiums of PICC P&C Insurance, Ping An P&C Insurance and Taibao P&C Insurance reached 274.439 billion yuan, a year-on-year increase of 12.01%, which was much higher than that of life insurance.

From the perspective of operating profit, in the first quarter, the net profit attributable to shareholders of the parent company of listed insurance companies generally declined sharply year-on-year, but PICC, which has the highest proportion of property insurance business, experienced the lowest decline. Specifically, New China Life Insurance dropped by 78.7%, China Life by 46.9%, China Pacific Insurance by 36.4%, Ping An by 24.1% and PICC by 12.9%.

According to the latest premium data, as of May 15th, four of the top five listed A-share insurance companies have disclosed their premium income in the first four months. Among them, PICC's premium growth rate is still the fastest. Specifically, the year-on-year premium growth rate of Ping An from January to April was 0.68%, that of China Life Insurance was -2.69%, that of New China Life Insurance was 3.8% and that of PICC was 13.88%. In terms of business types, the growth rate of property insurance business of listed insurance companies is still relatively fast. Among them, the premium of PICC P&C Insurance increased by 10.3% year-on-year, and that of Ping An Property Insurance by 8.35%.

Xu Wei, a founding member of China Actuaries Association and a senior actuary, said in an interview with Securities Daily that since the beginning of this year, the low growth rate of life insurance premiums has been affected by many factors: First, the epidemic repeatedly reduced residents' income expectations and suppressed the demand for premiums; Second, in the first quarter of last year, the old and new critical illness insurance was switched, and insurance companies increased their promotion efforts and overdrafted their insurance demand; Third, macroeconomic downturn and other factors have a negative impact on the development of life insurance industry. In addition, some people in the industry told reporters that the loss of marketers has greatly impacted the growth rate of premiums.

Looking at the growth trend of life insurance industry, orient securities predicted that the demand and supply of life insurance industry are weak at present, and it will take time to fully recover.

Contrary to the fact that the life insurance industry has not yet experienced the inflection point of growth rate, although the property insurance industry is also affected by macro fundamentals, its growth rate remains at a high level. Zhou Jin, PwC China's financial industry management consulting partner, told reporters that after the comprehensive reform of auto insurance, the auto insurance business of Head Property Insurance Company has fully adapted to the market after the fee reform, and with the help of its channel advantage, risk control ability and operational efficiency, it has expanded its competitive advantage and laid a foundation for the stabilization of the whole industry.

Ping An increased repurchase efforts in China.

Affected by the downturn of life insurance industry and macro fundamentals, insurance stocks continued to fall during the year, with the insurance sector falling by 14.49%. Among them, two insurance stocks fell by more than 20%.

In this context, in addition to foreign capital's counter-trend of some insurance stocks, listed insurance companies have also increased their repurchase efforts. On May 12th, Ping An announced that it had repurchased 3,307,200 A shares on May 12th, with a total repurchase amount of about RMB 146 million. Up to now, Ping An has spent 5 billion yuan on repurchase. The completion of this repurchase means that Ping An has reached the lower limit target of the previous A-share repurchase plan.

According to the research report released by Great Wall Securities and other institutions, the current insurance industry is facing many development challenges, and life insurance is in a deep transition period, which is continuously affected by the epidemic situation and the pressure of new sales. However, it is expected that the worst time has passed, and the marginal improvement trend is reflected in the data.

Although the 'worst time point' may have passed, investors still need to keep watching and waiting when the dilemma reverses. At present, listed insurance companies are trying to get out of the predicament by reforming life insurance and strengthening non-auto insurance business. However, a number of management personnel of listed insurance companies have also publicly stated that it may take several years for the reform to be effective.

 


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