Company Reports

PICC P&C's interim profit growth rebounded to 32% year on year from a 0.5% contraction in the first quarter, driven by the domestic equity market recovery and an improved combined ratio, or CR.

PICC P&C's first-quarter revenue and profit contracted 0.5% and 24%, respectively, on weak premium growth and mark-to-market losses on a volatile equity market. Total combined ratio, COR, improved 0.3 percentage points to 94.2%.

PICC P&C's 2025 net profit growth decelerated to 26%. Total combined ratio, or COR, improved to 97.5%, driven by respective 1.5 and 0.3 percentage point declines in auto and nonauto CORs to 95.3% and 100.8%.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts a first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

PICC Group held an investor day on Nov. 7, highlighting its recent developments and outlook for the nonauto and health insurance business and overseas expansion plan.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

PICC P&C's first nine-month underwriting profit and net profit rose 130% and 51% year on year, respectively, supported by a 2.1-percentage-point improvement in the combined ratio to 96.1% and a 49% increase in investment income.

PICC P&C's interim underwriting profit and net profit rose 45% and 32% year on year, respectively, supported by a 1.4-point improvement in the combined ratio, or COR, and a 33% increase in investment income.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

PICC P&C's first-quarter underwriting profits and net profit rose 178% and 93%, respectively, year on year.

We increase our fair value estimate for PICC P&C to HKD 15 per share from HKD 12 after a brighter margin outlook following management’s guidance and potential regulatory tailwinds in 2025. The valuation change factors in 50-80 basis points decline to combined ratio assumptions during our forecast period. The stock is fairly valued at 1.1 times the 2025 price/book ratio versus 0.6 to 0.8 price/book ratios for peers. The shares have outperformed year-to-date in 2025 thanks to its high earnings visibility and effective management execution. Trading at an above-peer valuation level, we believe PICC will need to deliver future nonauto CR below 100% to justify further upside.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

We retain our fair value estimates for Chinese insurers after a recent regulatory announcement that establishes a dynamic adjustment mechanism for the pricing rate on life insurance products. The current pricing rate remains unchanged, as the latest published reference rate did not trigger the adjustment mechanism. While market concerns over insurers’ spread loss risks are likely to persist, the pricing adjustment mechanism, coupled with recent central bank warnings about risks in China’s overheated bond market—where long-term yields have reached record lows—should help support long-term rates and enhance insurers’ liability cost management.

We maintain our HKD 12 fair value estimate for PICC Property and Casualty following the company's in-line third-quarter results, which showed accelerated growth in year-to-date insurance revenue and net profit, rising 5.3% and 38% year on year, respectively. The stock appears fairly valued, trading at 1.0 times 2024 book value and offering a dividend yield of 4.5%, compared with peers trading at 0.6-0.9 times book value. We believe this valuation premium is justified by PICC P&C’s consistent margins through the business cycle and effective management execution.

We retain our fair value estimate for PICC P&C at HKD 12 per share following its interim results, which show 5% growth in insurance revenue, in line with expectations, but a 9% decline in net profit year on year. Despite a surge in catastrophe losses during the first half of the year, PICC P&C’s overall combined ratio, or CR, of 96.2% was slightly better than expected. This represents a 0.4-percentage-point increase year over year, or a 0.5-percentage-point decrease when excluding weather-related loss. This performance supports our long-term thesis that PICC P&C’s strong risk management, quality customer base, and leading scale should continue to deliver steady and above-peer underwriting margins.

As China’s largest nonlife insurer, majority state-owned PICC P&C boasts first-mover advantage in major P&C insurance products, thanks to its extensive rural network and strong government support.

We expect China’s life insurers under our coverage to report a double-digit increase in second-quarter net profits versus the year-on-year contraction in the first quarter. While we expect their new business value growth in the first half will slow from 20%-50% in the first quarter, growth should stay healthy at 10% to 25% thanks to margin improvement and resilient demand for savings products as the deposit rate continues to trend down. We also expect property-casualty underwriting margin to improve from the first quarter, helped by reduced catastrophe losses. Despite the earnings improvement, we expect industrywide headwinds, including falling asset yield, potential commission rate cut in the agent channel, and uncertainty in catastrophe losses, will continue to weigh on investor sentiment.

New China Life, PICC Group, and PICC P&C reported larger-than-peer contractions in first-quarter net profits of 29%, 24%, and 38% year on year, respectively. This was partly due to the high base a year ago as a result of strong investment income for NCI and a record-low combined ratio for PICC P&C. We believe the results are largely in line to achieve our 2024 net profit growth of 19%, 22%, and 20% for PICC P&C, PICC Group, and NCI.