Insurance & Reinsurance 02 (Oct 14 - Dec 25)

[winston]

China: Insurance watchdog tipped

China is expected to name a senior Communist Party graft-buster to oversee the insurance sector, a signal that the ongoing crackdown on irregular business practices in the financial industry may be set to escalate.

Yang Xiaochao, secretary general of the Central Commission for Discipline Inspection, is the leading candidate to head the China Insurance Regulatory Commission.

The top CIRC job has been vacant since April, when former chairman Xiang Junbo was investigated for suspected "serious disciplinary violations" - a phrase usually referring to graft.

Yang is an associate of Wang Qishan, current head of the CCDI, the nation's main anti-graft body. Wang is also a member of the Politburo Standing Committee.

Source: REUTERS

[winston]

A bullish sign for insurance companies

by Justin Brill

P&C insurers hit a major oversold extreme based on their relative strength index (“RSI”).

Source: Stansberry Digest

http://thecrux.com/a-bullish-sign-for-p ... te-sector/

[winston]

Big drop in insurance premiums from mainland

by Janice Huang

New insurance premiums for policies issued to mainland visitors plunged to a two-year low, data released by the Insurance Authority showed yesterday.

They stood at HK$10.1 billion in the third quarter this year, representing a year-on-year decline of 46 percent, the authority said.

The figures have been seeing an decreasing trend since the fourth quarter in 2016 when China curbed residents buying insurance overseas.

Mainlanders are not allowed to buy insurance products with investment features in Hong Kong using China UnionPay cards.

The restriction did not immediately cause any drop in new premiums for policies issued to mainlanders in the fourth quarter last year, when compared to the third quarter in the same year. About 95 percent of the policies issued to mainland visitors were medical or protective.

Carol Hui Mei-ying, executive director of the authority for long-term business, said the decline was due to the stable Chinese currency, insurance companies' adjustment of strategies and the mainland's regulatory policies.

Total gross premiums of the Hong Kong insurance industry in the first three quarters of 2017 amounted to HK$363.2 billion, representing an increase of 11 percent over the corresponding period last year.

The annualized new life business premiums of HSBC Life saw a quarter-on-quarter growth of 4.8 percent for the three months ended 30 September 2017, said Edward Moncreiffe, chief executive of HSBC Insurance (Asia).

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0206&sid=2

[winston]

CIRC cracks down on insurance firms over illegal equity trading

Insiders think it shows the regulator’s resolution to eliminate the irregular and illegal activities of China's insurance companies

There are still nine insurance firms found to have conducted illegal equity trading that are awaiting action.

Source: ASIA TIMES

http://www.atimes.com/article/circ-crac ... 8-31514885

[winston]

Jan 24, 2018

<Research Report>Nomura: CN Life Insurers May Continue to be Re-rated This Year; Upbeat on Stocks with Cheap Valuation

Nomura, in its report, said that the fundamentals of Chinese insurance companies, in particular for life insurers, showed improvement, mainly due to rebounding bond yields and tightening regulations which reduced market competition for both life and P&C markets.

It is believed that such factors will drive the re-rating of Chinese life insurance stocks this year.

The broker was sanguine about stocks with undemanding valuation, including NCI (01336.HK), CHINA LIFE (02628.HK), CHINA TAIPING (00966.HK) and PICC GROUP (01339.HK).

Of all insurers, Nomura believed that life insurers saw more upside potential than P&C names, since the former was relatively insusceptible to macro and regulation outlooks. In addition. life insurers may benefit from the current bond yield trend.

Source: AAStocks Financial News

[winston]

China warns against insurance funding of local governments

China’s insurance firms saw their net operating cash flow slump 65 per cent last year.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... cash-local

[winston]

China warns against insurance funding of local governments

China’s insurance firms saw their net operating cash flow slump 65 per cent last year.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... cash-local

[winston]

not vested

<Research Report>Deutsche: CN Insurers Near-term Headwinds Remain; TPs Trimmed

Deutsche Bank's research report had it that China insurers were trading at historically low valuations, except for PING AN(02318.HK), while recovery was expected in 2H18.

2018-19 VNB forecasts were 13% and 13.4%.

PING AN and CPIC(02601.HK) were elected as industry top-picks.

The broker was cautious about P&C's outlook and remained positive towards life insurers.

The target prices of the major China insurers were cut by 5%-24%.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>C Suisse: Mainland Life Insurance Profit in Positive Momentum; Property Insurance Outlook Still Tough

Credit Suisse noted in its report that CHINA TAIPING(00966.HK), CPIC(02601.HK) and PING AN(02318.HK) outperformed in terms of 2017 VNB trends.

The industry momentum moderated in 2H17.

Among life insurers, strong earnings of 20% up were recorded, except NCI(01336.HK).

The profit outlook was believed to remain positive.

As for P&C sectors, premium growth picked up in 2017, but earnings were dragged by negativities like additional tax. The prospect remained challenging.

The broker elected PING AN and CHINA TAIPING as industry top-picks and saw speculation opportunity in NCI.

Source: AAStocks Financial News

[winston]

<Research Report>G Sachs: CN Life Insurers 2Q Growth to Recover, May Back Mkt Revaluation

In Goldman Sachs' research report, it pointed out that life insurance results showed a mix of strong earnings growth and weak new business sales.

With the sector valuation jittering around historical lows, downside risks should be limited by book value/embedded value growth (driven by strong earnings).

However, visible new business sales recovery is needed for near-term valuations to re-rate.

Source: AAStocks Financial News