Ping An Life to see 15% YoY NBV growth in Q1’24 – Nomura

A catalyst could be the low base effect in the first two months of COVID restrictions.

In the first quarter of 2024, Ping An's operating profit after tax is likely to experience a year-on-year (YoY) decrease, despite strong NBV growth, according to Nomura’s research note. Despite these challenges, Nomura highlights strong NBV growth of approximately 15% YoY in the life insurance business during the first quarter of 2024. 

This growth is attributed to several factors, including the low base effect in the first two months due to COVID-19 restrictions, the appeal of saving-type insurance products amid bank deposit rate cuts, and continuous improvements in agent productivity despite weak bancassurance momentum.

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Furthermore, Nomura estimates that life OPAT remained largely flat, experiencing only a marginal 1% year-on-year decrease in the first quarter of 2024.

Estimates showed the group’s OPAT is expected to decrease by 8% YoY to CNY36.8b, whilst its net profit is anticipated to decline by 17% YoY to CNY32.0b. This decline is attributed primarily to the relatively high base in equity investment returns, with the CSI300 registering a 3.1% increase in the first quarter of 2024 compared to 4.6% in the same period last year. 

Additionally, weakened bank earnings, down by 6% in the first quarter of 2024 compared to a 14% increase in the first quarter of 2023, have contributed to the decline in both OPAT and net profit.