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Original title: Real estate insurance companies expect huge losses of 2.1 billion yuan in the first three quarters, a year-on-year drop of 104.16%.
Our reporter Leng Cuihua
Industry data recently obtained by a Securities Daily reporter shows that property insurance companies suffered losses in the first three quarters, and total profit is expected to be -2.12 billion yuan, a sharp drop. 104.16% year-on-year.
Industry insiders believe that the main reason for the losses of property insurance companies in the industry in the first three quarters is that they were dragged down by credit insurance and collateral insurance, while underwriting insurance car is still profitable. However, from the perspective of future trends, it is difficult to continue the upward trend in auto insurance underwriting, and the performance of credit guarantee insurance may continue to improve.
Subscription loss exceeds 2.8 billion yuan
From the underwriting profit perspective, the underwriting profit of property insurance companies in the first three quarters was 2.804 billion yuan, a year-on-year decrease of 6.732 billion yuan, a decrease of 171.36%, and the rate Underwriting profit was -0.31%.
From the perspective of different types of insurance companies, the net profit of property insurance companies has a more obvious differentiation. According to the solvency report data released by insurers, the net earnings of PICC P&C, Ping An Property & Casualty and CPIC Property & Casualty (known in the industry as the “old three property insurance companies”) in the first three quarters were 17.408 billion yuan, 10.7 billion yuan, and 3.753 billion yuan. yuan. The total profit of the “three old property insurance companies” is about 31.861 million yuan. It can be seen that, from an industry perspective, the total losses of small and medium-sized property insurance companies in the first three quarters amounted to 33.981 billion yuan.
An industry insider told reporters that the P&C insurance industry’s scale effect is relatively obvious, and that the scale of premiums will increase, which can dilute fixed costs and increase profit margins, while smaller companies face higher fixed cost pressure. In general, it is difficult for China’s small and medium-sized property insurance companies to compete directly with large companies in their auto insurance operations. Non-automotive companies have yet to open a distinctive development path that can generate stable profits.
Furthermore, it is worth noting that in the first three quarters, premiums receivable from property insurance companies reached 266,154 million yuan, an increase of 42.79% from the beginning of the year, and the average premium rate receivable reached 16.28%. In this regard, Wang Xiangnan, deputy director of the Center for Insurance Research and Economic Development of the Chinese Academy of Social Sciences, told reporters that in recent years, due to fierce market competition, the market position of insurance companies Property insurance has declined, especially when faced with group clients, and the premium rate receivable shows an upward trend. In the context of the epidemic, to support the real economy, market players, and grassroots operations, property insurance companies generally grant policyholders a grace period for premium payment. But rising premiums receivable will hurt the performance of insurance companies. Premiums receivable are one of the sources of credit risk for insurance companies in reality, and the lack of recovery will cause losses in the underwriting business of property insurance companies. Property insurance is originally a short-term business. The delay in receiving premiums will also reduce the investible funds of insurance companies and reduce investment income.
Credit insurance business reduces net profit
“The sharp drop in the net profit of property insurance companies is mainly due to the strong increase in guaranteed insurance coverage,” Wang Xiangnan told the reporter.
The data obtained by the reporter showed that in the first three quarters, underwriting losses for credit insurance and property insurance companies’ guarantees were still expanding compared to the same period last year. Among them, the underwriting profit of credit insurance and collateral insurance were 1,299 million yuan and -9,219 million yuan, and the underwriting profit rates were -7.05% and -19.06%, respectively. The motor vehicle insurance underwriting profit was 10,481 million yuan, an increase of 1,939 million yuan, an increase of 22.71%, and the underwriting profit rate was 1.75%. It can be seen that credit guarantee insurance is the main driver of underwriting losses for insurance companies, while auto insurance, as a traditional type of insurance, maintained underwriting gains in the first three quarters .
Wang Xiangnan said that from the perspective of the credit insurance business, the large underwriting losses in the first three quarters were mainly due to underwriting failing to penetrate the bottom layer and being overly optimistic about cyclical factors. Today, insurance companies are gradually shedding their responsibilities by underwriting terms with “excessively lenient” terms, and monthly losses from guaranteed insurance have been significantly reduced, so the future will stabilize and improve. At the same time, this large loss enabled the insurance industry to receive credit risk education, leading to improved underwriting.
From the perspective of the auto insurance business, in the first three quarters of this year, auto insurance underwriting earnings increased year-on-year, mainly due to the decrease in vehicle use during the epidemic and the decrease in incidence of traffic accidents. However, the comprehensive auto insurance reform was officially implemented on September 19 and its purpose is to directly benefit consumers: increase the loss ratio and reduce the rate of additional expenses. The overall comprehensive cost rate is expected to increase. Hence, auto insurance underwriting earnings are increasing. It is difficult to continue. In addition, industry insiders predict that after comprehensive auto insurance reform, auto insurance underwriting may slip into a state of total loss.
