Soochow: The growth rate of property and casualty insurance premiums in November fell, focusing on the performance of life insurance in 2025.

Soochow released a research report stating that the premium income of property insurance companies reached 1.553 trillion yuan in January-November 2024, an increase of 6.8% year-on-year. In November, the monthly premium income of property insurance companies reached 122 billion yuan, an increase of 7.8% year-on-year, with a growth rate 12.9 percentage points lower than in October. The growth rate of monthly car insurance premiums declined, while the growth rate of non-car insurance premiums slowed significantly. Various insurance companies have successfully made a good start in 2025, and have generally increased their efforts in selling dividend insurance. The demand for savings in the market is still strong, and the growth of new policies and the sales of dividend insurance may surpass expectations. It is expected that the actual income level of some companies will be better than in 2023. Dividend insurance products with low guaranteed returns help reduce the liability costs of insurance companies, which has a positive effect on the long-term stable operation of the life insurance industry. Soochow's main points are as follows: The decrease in monthly premium income of life insurance companies narrowed slightly in November, focusing on the performance of various insurance companies at the beginning of the year. In January-November 2024, the original premium income of life insurance reached 4.041 trillion yuan, an increase of 14.0% year-on-year, and the scale premium was 4.6081 trillion yuan, an increase of 11.9% year-on-year; the original premium income of life insurance companies increased by 14.0% year-on-year (comparable caliber +7%). In November, the scale of original premium income of life insurance companies reached 158.6 billion yuan, a decrease of 1.6% year-on-year, narrowing by 0.3 percentage points compared to October. The increase in new premiums from policyholders (mainly universal insurance) decreased by 2% year-on-year in January-November, while investment-linked insurance increased by 25% year-on-year. In November, the increase in new premiums from policyholders decreased by 14% year-on-year, expanding by 10 percentage points compared to October; investment-linked insurance increased by 2% year-on-year, turning from negative to positive growth (in October, it was -73% year-on-year). Various insurance companies have successfully made a good start in 2025 and have generally increased their efforts in selling dividend insurance. The demand for savings in the market is still strong, and the growth of new policies and the sales of dividend insurance may surpass expectations. It is expected that the actual income level of some companies will be better than in 2023. Dividend insurance products with low guaranteed returns help reduce the liability costs of insurance companies, which has a positive effect on the long-term stable operation of the life insurance industry. The growth rate of health insurance premiums increased in the month, with a year-on-year increase of 9.0% in November. In January-November 2024, health insurance premiums increased by 8.5% year-on-year, and health insurance premiums in November increased by 9.0% year-on-year, with a 2.2 percentage point increase compared to October. The proportion of health insurance at the end of November was 23%, an increase of 0.2 percentage points compared to the end of October. On November 7, the National Medical Insurance Administration held a symposium on empowering commercial health insurance development with medical insurance platform data capabilities, proposing to effectively utilize the advantages of the large scale, good structure, and fast update of medical insurance big data to actively empower commercial insurance for accelerated development. We believe that the continued deepening cooperation between the medical insurance platform and insurance institutions will promote long-term development of commercial insurance business in various aspects such as product design, service optimization, and fee reduction. The growth rate of property insurance premiums was +7.8% year-on-year in November, with both car insurance and non-car insurance premiums falling compared to the previous month. In January-November 2024, property insurance companies' premiums reached 1.553 trillion yuan, an increase of 6.8% year-on-year. In November, property insurance companies' premiums reached 122 billion yuan, an increase of 7.8% year-on-year, with a growth rate 12.9 percentage points lower than in October. The growth rate of car insurance premiums fell in the month. Car insurance premiums increased by 5.2% year-on-year in January-November, with a year-on-year increase of 8.3% in November, a decline of 10.3 percentage points compared to October. According to data from the Automobile Industry Association, car production and sales increased by 11.1% and 11.7% year-on-year in November, respectively, with new energy car production and sales increasing by 45.8% and 47.4% year-on-year, respectively. Soochow believes that the growth of car insurance premiums still has resilience, as the average premium for new energy cars is higher than that of traditional fuel cars, and with the increasing penetration rate of new energy vehicles, it will enhance the growth of car insurance premiums. The growth rate of non-car insurance premiums has slowed significantly. Non-car insurance premiums increased by 8.7% year-on-year in January-November, with a year-on-year increase of 6.8% in November, a decrease of 18.2 percentage points compared to October. In November, the monthly premiums of health insurance/agricultural insurance/accident insurance/liability insurance increased by +43%, +15%, +11%, +1% year-on-year, respectively, compared to October's growth rates of +10%, -1%, -10%, and -20%, respectively. We believe that the growth rate of health insurance premiums has increased significantly in the month, which is related to the lower base in the same period last year. Soochow believes that top insurance companies such as PICC Property and Casualty Insurance Company (People's Insurance Company of China) maintain faster premium growth and better business quality, with a higher proportion of low claims family auto insurance in their auto insurance business and a controllable channel fee rate. Therefore, the profit space of industry leaders far exceeds that of medium and small insurance companies, and their competitive advantages will become more prominent in the second half of the reform. Improvements were seen on both the liability side and the asset side, with low valuation and low holding positions, ensuring both offense and defense. Soochow believes that the current strong demand for savings in the market, coupled with the trend of regulators continuously guiding insurance companies to lower their liability costs, will gradually ease interest rate pressures for insurance companies. The recent slight increase in the ten-year treasury yield to around 1.74% is expected to alleviate pressure on the yield of new fixed-income investments for insurance companies as the domestic economy recovers in the future. The current valuations of insurance stocks have fully reflected negative factors. As of December 26, 2024, the valuation of the insurance sector was 0.60-0.93 times the 2024 EP/EV, at historical lows, and the industry retains a "hold" rating. Risks: Downward trend in long-term interest rates; continued sluggish stock market performance; lower-than-expected growth in new policies.