China's insurance sector ready for recovery in 2021
China’s insurance sector is forecast to record double-digit new business value growth in 2021, thanks to demand recovery and moderated asset/liabilities risk.
It is estimated life insurers’ new business value will grow at around 11.8 percent this year as consumers seek more protection, insurance agents' offline activities will be less restricted and underwriters place greater focus on their jump-start campaigns, said Craig Cao, UBS China non-financials analyst.
An earlier launch of their jump-start sales and more diverse, shorter-term products will help underpin the pace of insurers' full-year product sales as well as agent retention and productivity gains. This will potentially bolster full-year premium and new business value growth.
Following an upturn in the 10-year China government bond yield, UBS believes the overhang from insurance firms reinvestment income risk has receded. Economic re-acceleration will translate to lower default rates and bad debt risk. All of this will be conducive to the sector's potential growth recovery.
In the third quarter of 2020, Chinese insurers recorded softer full-year premium year-on-year growth, shrinking agent headcounts and a deterioration in the property and casualty combined ratio.
During the week, listed insurance companies reported their unauditted premium income for the past year.
China Life Insurance Co, the country's largest life insurer, announced an accumulated premium income of about 612.9 billion yuan (US$94.5 billion) for the period from January 1, 2020 to December 31, 2020.
The number for the year of 2019 came at 567 billion yuan.
The People’s Insurance Company (Group) of China Ltd said the aggregate premiums income derived from its subsidiaries PICC P&C, PICC Life and PICC Health for the same period were 432 billion yuan, 96,184 million yuan and 32,257 million yuan, respectively.
The aggregate gross written premiums of ZhongAn Online P&C Insurance for the period were approximately 16.7 billion yuan.
Accumulated premium income of Ping An Insurance (Group) Company of China hit 797.3 billion yuan, up 0.34 percent compared with the previous year.
Ping An P&C, Ping An Life, Ping An Annuity and Ping An Health, its four subsidiaries, registered a respective 285.8 billion yuan, 476 billion yuan, 26.2 billion yuan and 9.18 billion yuan of premium income.
