Recently, non-listed life insurance companies have successively disclosed their solvency reports for the fourth quarter of 2023, and last year's results have surfaced. The "first brother" of the bank-based insurance company, China Post Life Insurance Co., Ltd., hereinafter referred to as "China Post Life"), was the "loss king" of the insurance company that year, with a net profit loss of more than 10 billion yuan last year.
According to the data, in 2023, China Post Life will achieve an insurance business income of 10986.6 billion yuan, the annual premium exceeded 100 billion yuan for the first time, but failed to achieve profitability, net profit loss of 1146.8 billion yuan.
China Post Life replied to an interview with a reporter from Times Weekly that the net profit loss in 2023 was mainly affected by factors such as the decline in the discount rate of reserves, the increase in reserves and the lower than expected investment returns, and the decline in the discount rate of reserves directly reduced China Post Life Insurance by 112100 million yuan profit.
Looking back on 2023, China Post Life Insurance will implement new financial accounting standards, establish an asset management company, spend 4.2 billion yuan to buy "buildings", and continue to promote the transformation and development of channels. In the future, how China Post Life will balance the development of assets and liabilities and turn losses into profits has attracted much attention in the industry.
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China Post Life Insurance suffered a loss of more than 10 billion, followed by CCB Life Insurance.
China Post Life Insurance suffered a loss of 10 billion yuan, mainly due to the increase in reserves and the decline in investment income.
The data shows that in the four quarters of 2023, China Post Life Insurance will continue to lose money, with a net profit loss of 25 in a single quarter0.4 billion yuan, 37.7 billion yuan, 749.4 billion yuan, 327.5 billion yuan, with a total net profit loss of 114 for the whole year6.8 billion yuan, this loss ranks first among non-listed life insurance companies.
China Post Life told the Times Weekly reporter that the loss was mainly affected by factors such as the decline in the discount rate of reserves, the increase in reserves, and the lower than expected investment returns. The decline in the discount rate of reserves directly reduced China Post Life Insurance by 112100 million yuan profit. At the same time, affected by various factors such as the capital market being less than expected, the company has seen a large net value fluctuation in investment income in the process of continuous optimization of asset allocation, which is lower than the expected target in stages, and it is necessary to further balance short-term fluctuations and long-term layout.
The yield curve of the Treasury bond affects the discount rate assumption of insurance companies, and in recent years, the decline in the yield of Treasury bonds has caused the discount rate to fall, and insurance companies need to increase the reserve of insurance contracts, which will reduce the pre-tax profit of the current period. The change in the discount rate has a greater impact on insurance companies with longer liability maturities and a higher proportion of traditional life insurance business. The chief actuary of a well-known insurance company told a reporter from the Times Weekly.
In terms of investment income, China Post Life's investment return in 2023 is lower than the average in recent years. According to the data, in 2023, China Post Life will achieve a return on net assets of -6931%, return on investment 27%, comprehensive investment return 301%。The average investment return of China Post Life Insurance in the past three years is 499%, the average comprehensive investment return is 337%。
It should be noted that on September 30, 2023, China Post Life completed the switch to the "New Financial Instruments Accounting Standards", becoming the first non-listed insurance company in the industry to implement the new accounting standards step by step. After the adjustment of accounting standards, the "three classifications" of financial assets have led to an increase in the proportion of financial assets included in the "financial assets measured at fair value through profit or loss" of insurance companies, and the impact of changes in fair value of investment assets on the income statement has been magnified.
At present, there is no public channel to see China Post Life's financial report for the fourth quarter of 2023, but only from the financial data of the first three quarters of 2023, China Post Life's net profit loss has actually narrowed year-on-year. According to the data, in the first three quarters of 2023, China Post Life Insurance achieved a net profit loss of 819.2 billion yuan, a decrease of 505.6 billion yuan, the loss narrowed by 3816%。
According to the joint credit rating announcement, in the first three quarters of 2023, China Post's life insurance business income will maintain a growth trend, and the proportion of traditional life insurance premium income will further increase; Investment assets maintained growth, and the quality of investment assets was good. Affected by factors such as the downward trend of the 750-day treasury yield curve and the lower-than-expected investment returns, the net profit suffered a large loss.
In 2023, the amount of losses of non-listed life insurance companies will increase. The losses of four insurance companies, including CCB Life Insurance, Bohai Life Insurance, Soochow Life Insurance, and Peking University Founder Life Insurance, also exceeded 1 billion yuan, and the losses expanded year-on-year. In addition, the total losses of the top 5 insurance companies on the loss list are higher than the total losses of other insurance companies.
According to the data, the net profit loss of the above four insurance companies in 2023 will be 429.9 billion yuan, 310.1 billion yuan, 178.5 billion yuan, 14$2.9 billion. The decline in investment returns is an important reason for the large losses of insurance companies.
For example, CCB Life Insurance, which is also a bank-based insurance company, saw its premium income and net profit both decline last year. According to the data, in 2023, CCB Life will achieve an insurance business income of 3971.3 billion yuan, down 206%；The net profit loss widened by 30% year-on-year800 million yuan.
According to the announcement of China Bond Credit Bond Rating Information, the decline in the scale of CCB Life's premiums was mainly caused by the company's reduction in the scale of single payment business, and the decline in net profit was mainly caused by the year-on-year decline in investment income due to capital market fluctuations. It is reported that the cumulative investment rate of CCB Life in 2023 is 261%, while its average return on investment in the past three years is 503%。
The debt side is performing well and the future is promising.
However, the loss is only temporary, and the debt side of China Post Life will perform well in 2023, and the road to profitability can be expected in the future.
Founded in 2009 and controlled by China Post Group, China Post Life Insurance is the largest bank-based life insurance company in China. The outlets of the Postal Savings Bank that are blooming everywhere are the natural resource endowment of China Post Life. At the same time, China Post Life Insurance Co., Ltd. leveraged the advantages of AIA, the second largest shareholder, in individual insurance channel expansion, product design, risk management and other aspects to broaden its sales channels and achieve continuous growth in business scale.
In 2023, 3After the 5% predetermined interest rate product was suspended, the long-term interest rate lock-in attribute of savings insurance is still favored by consumers. China Post Life's premium income maintained rapid growth, achieving insurance business income of 10986.6 billion yuan, a year-on-year increase of 2016%, the annual premium income exceeded 100 billion yuan for the first time. At the same time, under the strict supervision of the "integration of newspapers and banks" and the control of bancassurance channel costs, the debt cost of China Post Life Insurance has decreased, and the debt cost ratio of new orders is 391%, a year-on-year decrease of 18 bps.
With the advantage of shareholders, China Post Life has built a multi-channel development pattern of "one main and multiple auxiliaries", continuously promoted business transformation, and continued to recover from liabilities. In 2023, non-postal channels will account for 10 percent of the new premium income5%, the proportion of silver and mail channels continues to decline, the value creation effect is obvious, and the quality of liabilities continues to improve.
China Post Life told the Times Weekly reporter that in 2023, the company's new business value will increase by 34% year-on-year on a comparable basis; The supply capacity of endogenous capital continued to improve, and the future surplus of insurance policies increased by RMB8.9 billion from the beginning of the year, a year-on-year increase of 77%; The marginal balance was 40 billion yuan, an increase of 11.8 billion yuan from the beginning of the year, a year-on-year increase of 42%, and it will be gradually released into profits for each period in the future; Operating profit increased by 12% year-on-year, and self-accumulation continued to strengthen.
Not long ago, China Post Life Insurance held a 2024 work conference, and General Manager Li Xuejun deployed the company's key tasks in 2024, mentioning that it is necessary to speed up the empowerment of the main channels and stand firmly in the "main position" of Bank Post; Steadily develop new channel business and expand business "gas station".
At the same time, China Post Life Insurance is improving the layout of the asset side, setting up an insurance asset management company on the one hand, and accelerating direct investment in real estate business on the other.
In the fourth quarter of 2023, China Post Life made two major investments and added two new subsidiaries. Among them, China Post Insurance Asset Management, a wholly-owned subsidiary established with an investment of 500 million yuan, was approved for operation, becoming the 34th insurance asset management company in the industry; Acquired and held 100% equity of the project company Beijing Kunting Asset Management through equity plus debt, with a total investment of 425.6 billion yuan.
On September 28, 2023, China Post Life Insurance completed the delisting of COFCO Land Plaza, achieving a direct investment in real estate business to break zero. Since then, China Post Life Insurance has continued to optimize the layout of real estate, and on November 30 of the same year, it signed a subscription agreement for Xi'an TusCenter, which is one of the landmark buildings in Xi'an High-tech Zone, with a total construction area of 670,000 square meters.