CPIC's P&C Margins Improve, but Life Insurance VONB Growth Weaker Than Peers'

We retain our fair value estimate for China Pacific Insurance at HKD 30 per H share after first-half results were in line with our expectations. Total revenue grew 1% while net profit declined 23% from the year-ago period. The results highlight a larger-than-peer improvement in the property and casualty combined ratio, at 2.1 percentage points from the year-ago period to 97.2%, on the back of the 2.4- and 2-percentage-point respective declines in auto and nonauto insurance CRs to 96.6% and 97.6%. Benefiting from reduced claim costs during COVID-19 lockdowns and growing car ownership, CPIC saw across-the-board improvement in margins of major product lines.