As of May 15, the performance data of Chinese property insurance companies for the first quarter of 2024 has been largely disclosed. A total of 85 property insurance companies have released their solvency reports, and it appears that several leading property insurance companies have experienced a decline in net profit.
According to incomplete statistics from the Times Weekly, among the 7 property insurance companies, PICC Property and Casualty Company Limited, China Life Property & Casualty Insurance Company Limited, China United Property Insurance Company Limited, Taiping General Insurance Co. Ltd., and Sunshine Property and Casualty Insurance Company Limited have all seen a year-on-year decline in net profit. Apart from Taiping General Insurance Co. Ltd. which saw a slight decrease in premium income, the other 4 companies have shown a trend of “increased revenue but decreased profit”.
Overall, the combined net profit of the 7 property insurance companies in the first quarter was 14.079 billion yuan, showing an 8.86% year-on-year decrease compared to 15.448 billion yuan in the same period last year. The total premiums of these top 7 insurers accounted for 80.60% of the entire property insurance industry.
Regarding the situation of increased revenue but decreased profit for property insurance companies, actuary Xu Yuchen explained that abnormal weather conditions in the first quarter (natural disasters) led to an increase in claims expenses for some property insurance companies, resulting in a rise in comprehensive cost ratios. In addition, in the auto insurance business of property insurance companies, the proportion of new energy vehicle insurance is constantly increasing. However, new energy vehicle insurance has high claims rates and high loss ratios, which have dragged down the profitability of property insurance companies. Finally, there are also some insurers who have suffered from a decline in investment yield due to market fluctuations in the first quarter.
Overall, the property insurance industry is facing challenges in maintaining profitability in the face of various factors such as natural disasters, changes in business composition, and market fluctuations. This underscores the importance of risk management and strategic planning for property insurance companies in order to navigate the evolving landscape of the industry and ensure sustainable growth.