INSURANCE | Staff Reporter, China

Feeble premiums growth cap Chinese insurers' valuations

Average premium income for the big six insurers shrank 1.3% YoY.

Chinese insurers’ disappointing premiums growth will hinder the sector’s valuations, with analysts worried that the subdued performance will extend until the “kai men hong”, according to a UOB Kay Hian report.

The average premium income for the big six insurers shrank 1.3% YoY in October, with 10M 2020 premiums growth slowing down to 5.6% YoY. Amongst the large insurers, only New China Insurance (NCI) achieved double-digit YoY growth in 10M 2020, whilst others reported muted premium growth in both life and P&C segments.

Also in October, the premium incomes of the top four insurers, namely Ping An Insurance (Ping An), People’s Insurance Company of China (PICC), China Pacific Insurance Company (CPIC) and China Life Insurance (China Life), all contracted on a YoY basis.

In terms of the life segment, China Life, Ping An and CPIC all registered YoY contractions in life insurance premiums. Analysts remain concerned over their “kai men hong”, or annual sales promotional campaign, performances as the economic recovery has shown signs of slowing down.

For the P&C segment, premiums income tumbled in October and are expected to remain weak in Q1 2021. CPIC was the only large P&C insurer which achieved positive premiums growth.

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