, China
/Pixabay

PICC’s 4Q’23 earnings to rebound: UOBKayHian

Improvements in underwriting and reduced natural catastrophe losses contribute to the outlook.

PICC (People's Insurance Company of China) is poised for a positive turn in earnings during the fourth quarter of 2023, supported by enhanced underwriting profit and investment income, according to a research note by UOBKayHian.

Despite a modest 1.7% year-on-year (YoY) growth in premiums, improvements in underwriting and reduced natural catastrophe losses contribute to this positive outlook.

Premium growth was 0.8% YoY on 23 December, with a 6.4% YoY decline in the non-auto segment, reflecting PICC's proactive restructuring. 

Auto premium growth slowed to 3.8% in December, primarily due to a slowdown in passenger vehicle retail sales growth to 8.5% YoY.

CoR targets of 97%/<100% for auto/non-auto are deemed achievable in 2023. Auto CoR is expected to remain stable in 4Q23 due to stricter expense control, offsetting the rising claim ratio following a recovery in travel demand.

ALSO READ: Chinese insurer PICC P&C shrugs off sanctions on Russia

Non-auto is anticipated to achieve an underwriting profit in 4Q23, driven by reduced losses from natural disasters.

Improvement in investment yield is expected despite a gloomy stock market, supported by better bond market performance in 4Q23 and stable dividend income from stock investments.

A new dividend policy is under discussion, considering investor concerns about a potential decline in 2023 net profit impacting upcoming dividend payouts. 

Discussions with the Ministry of Finance aim to make adjustments to the dividend policy, with a possible temporary increase in the payout ratio to maintain the current dividend per share (DPS) level.

 

Join Insurance Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

Income-Allianz failed merger shows popular opinion is king
The deal faced backlash from Singaporeans who thought it betrayed Income’s social mission.
Filipino gamers hold promise for FWD
The insurer plans to support other games and aspects of the gaming ecosystem beyond esports.