China Galaxy Securities: Interest rate change impact continues, property and casualty insurance business growth rate declines.

China Galaxy Securities released a research report stating that the growth rate of industry original premium income in 2024 is expected to continue to slow down, and the impact of the shift in life insurance interest rates is expected to continue. The overall asset size of the insurance industry continues to grow, with total assets and net assets increasing. On the asset side, with the push of policy measures, the marginal repair of the equity market, and significant improvement in investment yield for insurance companies. On the liability side, the lowering of deposit rates enhances the advantage of savings-type products, and although the growth rate of life insurance premiums may slow down temporarily, overall it remains positive; policies such as trade-in incentives in the automobile sales market are favorable for the continued growth of property insurance premiums. Key points from China Galaxy Securities: The growth rate of industry original premium income slows down, and the impact of the shift in life insurance interest rates continues. In the first 11 months, the insurance industry achieved original premium income of 5357.63 billion yuan, a year-on-year increase of 11.83%, narrowing down by 0.58 percentage points compared to the previous value (January-October: +12.41%). For life insurance, the insurance industry achieved life insurance premium income of 4,048.13 billion yuan from January to November, a year-on-year increase of 14.03%, narrowing down by 0.71 percentage points compared to the previous value (January-October: +14.74%). Among them, life insurance premium income reached 3,038.15 billion yuan, a year-on-year increase of 16.40%, narrowing down by 0.95 percentage points compared to the previous value (January-October: +17.35%); health insurance premium income reached 921.79 billion yuan, a year-on-year growth of 8.49%, expanding by 0.03 percentage points compared to the previous value (January-October: +8.46%); accidental insurance premium income was 873.37 billion yuan, a year-on-year decrease of 2.32%, narrowing down by 0.4 percentage points compared to the previous value (January-October: -2.72%). For property insurance, the insurance industry achieved property insurance premium income of 1,309.32 billion yuan in the first 11 months, a year-on-year growth of 5.53%, expanding by 0.04 percentage points compared to the previous value (January-October: +5.49%). Among them, motor insurance premium income reached 818.07 billion yuan, a year-on-year increase of 5.17%, expanding by 0.33 percentage points compared to the previous value (January-October: +4.84%); non-motor insurance premium income reached 491.76 billion yuan, a year-on-year increase of 6.13%, narrowing down by 0.41 percentage points compared to the previous value (January-October: +6.54%). In November 2024, the growth rate of health insurance premiums was remarkable, while motor insurance and non-motor insurance growth rates collectively narrowed. In November 2024, the insurance industry achieved original insurance premium income of 280.63 billion yuan, a year-on-year growth of 2.29%, a decrease of 4.78 percentage points compared to the previous month. For life insurance, life insurance business achieved a premium income of 169.67 billion yuan, a year-on-year growth of 0.01%. Among them, life insurance business achieved a premium income of 115.24 billion yuan, a year-on-year decrease of 3.49%, narrowing down by 0.24 percentage points compared to the previous month; health insurance business achieved a premium income of 48.17 billion yuan, a year-on-year growth of 9.03%, expanding by 2.23 percentage points compared to the previous month; accidental insurance business achieved a premium income of 6.41 billion yuan, a year-on-year growth of 3.05%, narrowing down by 5.73 percentage points compared to the previous month. For property insurance, property insurance business achieved a premium income of 110.86 billion yuan, a year-on-year growth of 6.01%, narrowing down by 13.99 percentage points compared to the previous month. Among them, motor insurance business achieved a premium income of 80.46 billion yuan, a year-on-year growth of 8.34%, narrowing down by 10.3 percentage points compared to the previous month; non-motor insurance business achieved a premium income of 30.94 billion yuan, a year-on-year growth of 0.29%, narrowing down by 23.46 percentage points compared to the previous month. The industry's asset size continues to grow, with the growth rates of total assets and net assets expanding. As of the end of November 2024, the total assets of the insurance industry reached 35.19 trillion yuan, an increase of 0.49% month-on-month, and a 17.47% increase compared to the end of the previous year; the net assets reached 3.13 trillion yuan, an increase of 0.7% compared to the end of the previous month, and a 14.38% increase compared to the end of the previous year. As of the third quarter of 2024, the balance of capital utilization in the insurance industry reached 32.15 trillion yuan, a year-on-year increase of 14.06%; among them, the balance of capital utilization in life insurance companies reached 28.94 trillion yuan, a year-on-year increase of 14.93%; the balance of capital utilization in property insurance companies reached 2.14 trillion yuan, a year-on-year increase of 6.74%. Benefiting from the marginal improvement in the equity market by the end of September, the structure of insurance fund utilization continues to adjust, with a larger allocation to equity assets. As of the third quarter of 2024, the ratio of fixed-income assets (bank deposits + bonds) was 55.47%, an increase of 0.66 percentage points month-on-month; the ratio of equity assets (stocks and funds) was 20.35%, an increase of 0.21 percentage points month-on-month; the ratio of other assets was 24.18%, a decrease of 0.87 percentage points month-on-month. Investment recommendation: Maintain a "recommended" rating for the industry Suggested targets to watch include China Life Insurance (02628, 601628.SH) / New China Life Insurance (01336, 601336.SH) / Ping An Insurance (02318, 601318.SH) / China Pacific Insurance (02601, 601601.SH) / The People's Insurance (601319.SH) Risk warning: Risks of macroeconomic performance falling short of expectations, risks of downward long-term interest rates, risks of volatility in the equity market.