Understanding the Market | Non-life Insurance Stocks Lead the Morning Rise, Regulatory Guidance to Reduce Debt Costs, Asset Side Expected to See Marginal Improvement

Intelligence Finance App learned that in the morning session, the performance of domestic insurance stocks ranked top. As of the time of publication, China Taiping (02601) rose by 4.3% to HKD 15.52, China Pacific Insurance (02328) rose by 2.5% to HKD 10.24, New China Life Insurance (01336) rose by 1.68% to HKD 13.32, and China Life Insurance (02628) rose by 1.7% to HKD 8.98.

Guosen Securities pointed out that as the first quarter of listed insurance companies comes to an end, life insurance premium income continues to be under pressure. Regulatory authorities are continuously guiding industry channel adjustments and reducing the rigid costs on the liability side. Against this backdrop, the performance of listed insurance companies in terms of premium income has basically bottomed out and rebounded. With continuous adjustments in channel quality, ongoing improvement in insurance product forms, and the positive background of industry's medium to long-term NBV restoration, the outlook is favorable. Property insurance business benefits from the festive effects in the first quarter and the continued economic recovery, leading to growth in premium income.

Huaxi Securities pointed out that from the liability side, in terms of life insurance, overall premium income maintained growth in the first quarter, mainly due to the continued recovery of supply-side individual insurance channels. Although new single premiums in bancassurance channels are under pressure, the reduction in upfront payments has improved liability quality. With strong demand for household savings and continuous reduction in deposit interest rates, the advantages of insurance products are highlighted. In terms of property insurance, the long-term outlook is optimistic about the structural adjustment of non-auto insurance business improving the COR. From the asset side, the current equity market shows signs of stabilization and recovery. It is expected that there is limited room for long-term interest rate reduction, and the asset side is expected to see marginal improvement. The insurance sector has been declining recently, with overall valuations at historically low levels, sufficient safety margins, and a "buy" rating for the industry maintained