The net profit of 72 non-listed property insurance companies will increase by about 90% in 2022
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As of February 6, 72 non-listed property and casualty insurance companies that have disclosed their solvency reports for the fourth quarter of last year achieved a total net profit of about 7.8 billion yuan last year, a substantial increase of about 90% year-on-year.
Industry insiders believe that there are two core reasons for the sharp increase in net profit of non-listed property insurance companies last year: one is the rapid growth of premium income, and the other is the significant decrease in vehicle travel last year. This year, the premiums of property insurance companies are expected to continue to maintain high growth, but the loss ratio may increase compared with last year.
Data show that 72 non-listed property insurance companies received a total of 375.3 billion yuan in premiums last year, a year-on-year increase of 7.6%. The fastest year-on-year growth in premium income was Zhongyuan Agricultural Insurance, whose premium income was 4.235 billion yuan, a year-on-year increase of 43.2%; followed by Taikang Online, whose premium income was 10.013 billion yuan, a year-on-year increase of 40.2%.
From the perspective of net profit, 54 of the 72 non-listed property insurance companies achieved profitability, accounting for 75%; the top three net profits were Yingda Property Insurance (1.41 billion yuan), China Property Insurance (1.10 billion yuan) , Dinghe Insurance (1.08 billion yuan).
According to industry insiders, the rapid growth of premium income while the slow growth of compensation payments was the most important reason for the substantial increase in net profit of property insurance companies last year. According to data from the China Banking and Insurance Regulatory Commission, property insurance companies (including listed companies) received a total of 1,486.7 billion yuan in premium income last year, a year-on-year increase of 8.7% on a comparable basis; compensation payments were 907.8 billion yuan, a year-on-year increase of 2.6% on a comparable basis.
Regarding the steady growth of property insurance company premiums last year, Xie Yuantao, dean of the School of Insurance at the University of International Business and Economics, told a reporter from the Securities Daily that the short-term impact of the comprehensive reform of auto insurance on auto insurance premiums has gradually weakened. At the same time, property insurance business, especially auto insurance, etc. A certain rigid demand attribute is less affected by external factors; in addition, property insurance companies continue to make efforts in short-term health insurance, home property insurance, etc., which also drives premium growth.
Shi Hui, the former general manager of Dajia Property & Casualty Insurance, told the “Securities Daily” reporter that from the perspective of investment, the overall rate of return on insurance funds was under pressure last year. Therefore, this is not the main reason for the substantial increase in the net profit of property insurance companies. From the perspective of underwriting, vehicle travel decreased significantly last year, resulting in a significant decrease in the accident rate and compensation rate of auto insurance compared with the past. Therefore, the net profit of property and casualty insurance companies increased significantly last year, mainly due to the reduction in the loss ratio of the underwriting side.
With regard to the development of the property insurance industry this year, industry insiders believe that overall, the comprehensive cost ratio on the underwriting side is expected to rise compared with last year; on the investment side, this year’s investment yield is expected to improve.
Xia Changsheng, an analyst at Caitong Securities, predicts that “auto insurance will achieve a steady growth of about 7% this year, and non-auto insurance may achieve a relatively rapid growth of over 10%.”
From the perspective of the accident rate, “it is expected that the accident rate of property insurance companies will return to normal levels, which has increased compared with last year.” Shi Hui believes.
People in the industry believe that property insurance companies are still expected to achieve better profitability on the underwriting side this year, despite rapid growth in premiums, but an increase in the comprehensive loss ratio and comprehensive cost ratio.
A number of people in the insurance industry said that this year’s macroeconomic trend will be better than last year. At the same time, people’s expectations have improved, confidence has increased, the equity market has become more optimistic, and the investment income of insurance funds is expected to improve.
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