Guotai Junan: It is expected that life insurance will turn into a good start in 2025, and property insurance will show steady growth.

Guotai Junan released a research report stating that the negative growth of life insurance premiums in November does not change the annual growth expectations, with health insurance rebounding and accident insurance still under pressure; the recovery of new car sales driving an improvement in car insurance growth, while non-car insurance continues to grow in pursuit of annual targets. In terms of life insurance, with the current downward trend in bank deposit interest rates, it is expected that the demand for savings insurance products will remain strong due to customer preference for low-risk products; on the other hand, pricing rate cuts and the overall channel integration are expected to drive value rate improvement, with NBV steady growth expected for life insurance in 2025. In terms of property insurance, with the recovery of new car sales and stabilizing average vehicle premiums, the demand for non-car insurance remains strong, and it is expected that property insurance premiums will maintain a steady growth rate in 2025. Guotai Junan's main points are as follows: In November, there was negative growth in life insurance premiums, with improvements in health insurance compared to previous months and continued weak demand for accident insurance. From January to November, the insurance industry's premium income was 5.358 trillion yuan, with a comparable caliber year-on-year growth rate of 6.2% (previously 6.7%). In the first eleven months, the original premium income of the life insurance industry was 3.8027 trillion yuan, with a comparable caliber year-on-year growth rate of 6.3% (previously 7.0%), with life insurance, health insurance, and accident insurance reaching 3.0388 trillion yuan, 725.6 billion yuan, and 38.3 billion yuan respectively, with year-on-year growth rates of 16.4%, 6.4%, and -9.6%. In November, the original premium income of life insurance was 115.2 billion yuan, with a year-on-year growth rate of -3.5% (previously -3.7%), mainly due to the shift in focus of insurance companies toward the business of the 25-year opening red envelopes, with the annual goal of 2024 expected to have been basically achieved; health insurance in November was 41 billion yuan, with a year-on-year growth rate of 4.6% (previously 3.4%), with some insurance companies expected to promote the sales of health insurance products to increase customer acquisition in the new year; accident insurance in November was 2.4 billion yuan, with a year-on-year growth rate of -6.9% (previously -8.6%), with the demand for accident insurance business expected to remain low after the new regulations. From January to November, new premium payments for policyholder investment funds (mainly universal insurance) totaled 543.8 billion yuan, with a year-on-year growth rate of -1.8%, and in November, it was 24.1 billion yuan, with a year-on-year growth rate of -14.6% (previously -4.7%), mainly due to the negative impact of the minimum guaranteed interest rate cut for universal insurance; from January to November, new premium payments for investment-linked insurance separate accounts totaled 16.1 billion yuan, with a year-on-year growth rate of 24.6%, and in November, it was 1 billion yuan, with a year-on-year growth rate of -0.8% (previously -73.5%), expected weak attractiveness of investment-type insurance products due to market volatility in equity markets. The expected improvement in new car sales is the main driver of car insurance growth, with non-car insurance aiming for the annual target. From January to November, property insurance's original premium income was 1.553 trillion yuan, with a comparable caliber year-on-year growth rate of 5.8% (previously 5.7%), with car insurance and non-car insurance original premium incomes reaching 818.1 billion yuan and 737.2 billion yuan respectively, with year-on-year growth rates of 5.2% (previously 4.8%) and 8.7% (previously 8.8%). In November, property insurance's original premium income was 122 billion yuan, with a year-on-year growth rate of 7.8% (previously 20.7%), with car insurance's original premium income reaching 80.5 billion yuan, with a year-on-year growth rate of 8.4% (previously 18.6%), expected to be driven mainly by increased vehicle insurance due to subsidy policies driving a recovery in car consumption (with new car sales growing by 16.6% year-on-year); non-car insurance's original premium income was 41.6 billion yuan, with a year-on-year growth rate of 6.8% (previously 25.0%), expected to be driven mainly by insurance companies aiming for annual premium targets, with health insurance, agricultural insurance, and accident insurance being the main driving factors, with year-on-year growth rates of 42.3%, 14.7%, and 11.8% respectively. Investment recommendation: Expecting insurance companies' liabilities to remain stable, positive expectations for equity market improvement to drive investment-side profit improvement, maintaining a "hold" rating on the industry. Recommend holding shares of New China Life Insurance (601336.SH), China Life Insurance (601628.SH), China Pacific Insurance (601601.SH), Ping An Insurance (601318.SH), PICC P&C (02328), and PICC GROUP (01339). Risk factors: Market volatility; downward trend in long-term interest rates; limited sustainability of customer demand.