PICC P&C’s Auto Underwriting Margin in Line, but Nonauto Margin Slightly Missed

PICC P&C reported 7.2% growth in net earned premium and 19.4% growth in net profit for 2022. As expected, the auto insurance combined ratio, or CR, improved to 95.6% from 97.3% in 2021. Despite a challenging macro environment, PICC P&C continued to enjoy the highest underwriting margin in the industry, reflecting its scale advantage, strong cost management, and distribution strength in the auto insurance market. Nonauto insurance CR improved 2.8 percentage points to 100.6% from 2021 on lower natural-disaster-related claims and ongoing business optimization. However, nonauto margin slightly missed our expectation, hit by lower margins in liability insurance and commercial property insurance during the fourth quarter on rising claim standard for personal injuries and claim liability of historical high-risk business. With PICC P&C’s continued efforts to clean up historical high-risk business and better risk pricing, we expect the ongoing product innovation and economic recovery to support better margins of these businesses.