First Read: China Insurance Sector "The need-to-know: insurance fund flo..."

研报英文原文证据摘录

First Read: China Insurance Sector "The need-to-know: insurance fund flo..."

reporting of expenses and cost allocation. While the

rectification process facilitates a healthier industry development, it may lead to lower

actual sales incentives, suppressing bancassurance sales. In Q2-to-date, CPIC

outperforms in FYRP growth (UBS-e), as the insurer changes bancassurance product

strategy and strives to catch up peers. China Life also fares better than most peers in

sales, but we expect YoY margin expansion to narrow in rest of the year vs Q1. Ping An

faces growth pressure in Q2-to-date, as the company upholds a more disciplined

approach in commission consistency following regulatory scrutiny. In H2, the key debate

is centered around bancassurance - regulations would be tightened after Circular 65,

but the level of enforcement is uncertain following the changes of NFRA leadership.

Investor feedback on recent share price performance

Equity market rebounds in Q2-to-date, bringing expectation for strong earnings

recovery for insurers, especially life names, in Q226 – assuming a stable equity market

performance in rest of the quarter. China life insurance sector (H/A), however, fell by

5.3%/ 8.7% over the past week, lagging Hang Seng Index/CSI300 by 2.5 pp/6.3 pp. We

gather investor feedback: From fundamental perspective, some investors are concerned

about the tougher comparable base for VNB from June, given the buying spree before

pricing interest rate cut at end Aug-2025. Further, A-share life names underperformed

H-shares by 20 pp in YTD, possibly due to (1) reduced A-share insurance exposure by

‘national team’, and (2) sector rotation towards tech in A-share market (CSI Tech 50

+8.8%/STAR 50 +27%; vs Hang Seng Tech: down 12%), and (3) increased holdings of