GF SEC: Life insurance premium growth turns positive while non-life insurance growth continues to accelerate.

GF SEC released a research report stating that from January to August, the original insurance premium growth rates of Ping An/Life Insurance Company of China/New China Life Insurance/China Taiping Life Insurance were 8.9%/5.9%/1.9%/1.5%, compared to -6.4%/-2.6% in the previous period from January to July. In the same period, the year-on-year growth rates of Property and Casualty Insurance of PICC/ Ping An/ China Taiping were 4.3%/5.3%/7.7%, compared to 4%/4.4%/7.5% from January to July. Looking ahead, benefiting from the release of savings demand brought about by the reduction in interest rates, the gradual decrease in the base number, and the increase in the number of banking and insurance channel cooperation outlets, the decline in new single premium is expected to gradually converge. As the average premium per vehicle has shown an improvement trend, and with a relatively low base, the growth rate of car insurance premium is expected to gradually expand, and the gradual advancement of policy-based insurance tenders will also drive the growth acceleration of non-auto insurance. GF SEC's main points are as follows: Traditional life insurance premiums of listed insurance companies all turned positive due to factors such as the reduction in traditional insurance interest rates and increased household savings willingness. According to monthly premium announcement data, from January to August, Ping An/Life Insurance Company of China/New China Life Insurance/China Taiping Life Insurance's original insurance premium growth rates were 8.9%/5.9%/1.9%/1.5%, compared to -6.4%/-2.6% from January to July, all turning positive. In August alone, premiums increased significantly by 36%/29%/122%/53%, mainly benefiting from the further release of household savings demand brought about by the reduction in traditional insurance interest rates and low year-on-year base numbers, as well as the improvement in agent capacity. Among them, Ping An's cumulative premium growth rate continues to lead the industry, primarily due to the sustained growth in new business, while New China Life's cumulative premium growth rate turned positive for the first time, with monthly premium growth rates far exceeding the industry average, expected to be mainly due to the company's strong promotion of traditional insurance product sales. Looking ahead, the reduction in new single premium decline is expected to gradually converge, benefiting from the release of savings demand caused by the further reduction in interest rates, the gradual decrease in the base number, and the opening up of the number of banking and insurance channel cooperation outlets. Additionally, the reduction in interest rates will drive the improvement in the margin, and the value rate is expected to continue to rise; therefore, the possibility of some demand being overdrafted in the fourth quarter will not affect the rapid growth of New Business Value (NBV) for the whole year. Acceleration in the growth of Property and Casualty Insurance premiums According to premium announcements, from January to August, China PICC/ Ping An Property and Casualty/ China Taiping Property and Casualty Insurance premium growth rates were 4.3%/5.3%/7.7%, compared to 4%/4.4%/7.5% from January to July. China PICC's auto insurance/non-auto insurance year-on-year growth rates from January to August were 3%/5.7%, compared to 2.7%/4.7% from January to July, continuing to expand, with the monthly growth rate of auto insurance increasing from 3.9% last month to 4.4%. It is expected that this is mainly due to the slight increase in the average per vehicle premium month-on-month, with the year-on-year decrease in monthly car sales narrowing from -2.8% to -1%, while the year-on-year growth rate of non-auto insurance increased significantly from 6% last month to 21.4%, mainly due to the positive turnaround of the medical insurance monthly growth rate from -17.4% to 73.5%, expected to be mainly due to the gradual advancement of the tender process. Looking ahead, with the trend of the average per vehicle premium already showing improvement, and with a relatively low base number, it is expected that the growth rate of car insurance premiums will gradually expand. The gradual advancement of policy-based insurance tenders will also accelerate the growth of non-auto insurance. The claims ratio is expected to be under pressure due to the impact of the "Capricorn" typhoon landing; however, benefiting from the continuous reduction in risk exposure and the decrease in expense ratio due to the competitive slowdown brought about by regulatory pressure, profitability is expected to exceed expectations. Furthermore, the political bureau meeting proposed to "timely introduce a batch of policy measures to increase economic growth", which is expected to drive nominal economic growth, thereby boosting the rebound of long-end interest rates and asset prices such as equity markets. Insurance assets are expected to continue to warm up following this trend, favoring profit growth. Investment recommendation: The growth rate of liabilities as a whole is expanding, while the improvement in assets is expected to improve. Considering the subsequent decline in profit base and the favorable policies that will be successively introduced, along with the insurance stock valuation currently at historically low levels, the industry remains a "buy" rating. It is recommended to continue to focus on insurance stocks, with specific stock recommendations including China Pacific Insurance, PICC P&C, China Life Insurance, CHINA TAIPING, New China Life Insurance, Ping An Insurance, and AIA. Risk warning: Long-term bond yields decline, agent oversizing declines, and significant increase in major catastrophe losses.