3 Refined the research report 185th issue of the latest recorded data:
Four-dimensional comparative analysis of the life insurance industry in China and the United States: premiums, assets, liabilities, and profits!
Let’s talk about the conclusion first :
, From the income side:
scale premium structure of the US life insurance industry is: the proportion of traditional life insurance, health, annuities, and investment funds is roughly 15:20:31:34.
If both annuity and investment funds are regarded as investment attribute requirements, the ratio of the narrow guarantee attribute to the investment attribute is 35%: 65%.
Our traditional life insurance scale has exceeded that of the United States. The premium income of annuity insurance is about half of that of the United States, and the scale of new investment payment fees is only 1/3 of that of the United States.
The ratio of China's narrow-sense protection attributes (traditional life insurance + health insurance) to investment attributes (annuity insurance + investment payments) is 53%: 47%.
, From the asset side,
In 2020, the total asset scale of the US life insurance industry was about US$8.2 trillion, of which the scale of bond assets accounted for about 47%, and the scale of equity assets accounted for about 30%.
022 first half of the year China Banking and Insurance Regulatory Commission has newly announced the balance of funds used in China's life insurance industry and the details of some investment assets, among which the sum of the three items of stock, securities investment funds and long-term equity investment accounts for 22% of the investment funds.
On the surface, the proportion of equity asset allocation in the US life insurance industry is higher.
But in fact, the US life insurance industry includes general accounts and independent accounts, and the two accounts have very different equity asset allocations.
General account equity assets are only 2.3%. The proportion of equity assets in independent accounts is as high as 76.3%.
The ratio of equity allocation differences between the two accounts in the United States is huge, mainly because independent accounts do not promise return on investment, and all investment returns and investment losses are borne by the customer.
So although on the surface, our overall equity allocation ratio is lower than that of the United States, because the United States has made structural segmentation, the investment risks of my country's life insurance companies may be higher than those of the United States.
In fact, there have been two waves of life insurance closures in the history of the United States.
Summary of these two bankruptcies, ultimately all are caused by the risk of interest rate spread loss .
It is also after these two bankruptcies that we have seen that the proportion of assets in independent account accounts in total assets has increased from 11.3% in 1990 to 38% now.
The United States has very low restrictions on public account equity assets, and increasing the proportion of equity assets in independent account assets may also be due to concerns about the risk of interest rate spread loss. The two waves of bankruptcy in
and some subsequent risk events have caused the number of life insurance companies in the United States to reduce from the highest number of 2,343 in history to the current 747.
, From the liability side:
In 2020, the liabilities for deposit-type contracts under the general account of the US life insurance industry was US$400 million, the liabilities for reserve liabilities were US$300 million, and the annual insurance insurance liability reserve in general account was US$180 million. The total size of the three was approximately US$5.2 trillion, accounting for 68% of the total liabilities.
In fact, behind the above liabilities of the US life insurance industry are investment demand. This shows that asset management has become the main business content of American life insurance companies.
Since the insurance reserve liability data of annuity insurance cannot be withdrawn separately from the profit statement of China's life insurance company, we cannot give an estimate of the scale of investment demand behind the liabilities of China's life insurance industry.
" insurance surnamed insurance " is certainly not wrong, but we cannot mention that investment is considered "investment is the devil, the opposite, and investing means not paying attention to protection."
In fact, the protection of longevity risks is to require long-term asset management.
Of course, we need to emphasize that this asset management is long-term, not short-term financial management or speculation.
In fact, the most important opportunity for insurance companies in the future is to retirement, and retirement itself requires long-term asset management.
, From the profit side:
In 2020, the net profit of life insurance in the United States was US$39.7 billion, while in the same period, China was US$38.3 billion. The net profit scale of the life insurance industries in China and the United States is comparable.
From 2018 to 2020, the ROE of China's life insurance industry was significantly higher than that of the United States.
A seemingly contradictory phenomenon is that the leverage ratio of the United States is high and the ROE of China is high.
From the perspective of leverage ratio, the leverage ratio of the US life insurance industry in 2020 was 15.3, while China was 10.9 in the same period, and further increased to 11.5 in 2021.
The higher leverage ratio in the United States may be due to its higher independent account asset size.
Since independent account assets are at the customer's own risk, they will occupy less capital requirements, thus forming a higher leverage ratio.
Text:
Recently, we collected the 2021 Life Insurers Fact Book released by the American Life Insurance Industry Association. So far, we have collected the "13-efficient" information, and collected the industry analysis reports of the US life insurance industry for a total of 21 years (2000-2020).
Based on this, we will mainly conduct a comparative analysis from four dimensions: premiums, assets, liabilities, and profits in the life insurance industries in China and the United States.
Scale premium income and structural status of China-US life insurance industry
Scale premium income in the United States in 2020 is about 1 trillion US dollars, of which traditional life insurance (life insurance) premium income of US$148 billion decreased by 5.5% year-on-year;
annuity insurance premium income of US$301.3 billion, a year-on-year decrease of 13.3%;
health insurance premium income of US$183.6 billion, a year-on-year decrease of 0.9%;
new contract investment amount of US$325.3 billion, a year-on-year increase of 30%, basically offsetting the decline in premium income.
From the perspective of income structure, the proportion of income structure of traditional life insurance in the United States has continued to decline, gradually falling from 69.1% in 1960 to 15.4% in 2020;
Annuity insurance income structure gradually increased from 7.7% in 1960 to 31.4% in 2020;
New contract investment funds from nothing to something, until 2020 new contract investment funds account for 33.9% of scale premiums, exceeding 1/3 of scale premiums.
At this point, the scale premium structure of the US life insurance industry is: the proportion of traditional life insurance, health, annuities, and investment funds is roughly 15:20:31:34.
If both annuity and investment funds are regarded as investment attribute requirements, the ratio of the narrow guarantee attribute to the investment attribute is 35%: 65%.
corresponds to this. In 2021, China's premium income was US$590.7 billion, of which traditional life insurance premium income was US$196.1 billion, which has exceeded the United States;
annuity insurance premium income was approximately US$166.6 billion, which is approximately half of the United States;
health insurance premium income was US$117.7 billion, which is 64% of the health insurance premium income in the US life insurance industry;
new contract investment funds were US$110.4 billion, about 1/3 of the United States.
It should be noted that the exchange rate of is set to 6.5 (same below).
From the perspective of the trend of revenue structure changes, the proportion of traditional life insurance revenue has dropped from 48% in 2014 to 26% in 2016, and has since rebounded to 33% in 2021.
Annuity insurance revenue share continued to increase from 17% in 2014 to 35% in 2017, and has since declined slightly to 28% in 2021.
Yi Health Insurance revenue share continues to increase from 11% in 2014 to 20% in 2021.
The proportion of new contract investment income has continued to increase from 25% in 2014 to 37% in 2016. Affected by the "insurance return to insurance" policy, it fell to 20% in 2017, and has fluctuated slightly around this level since then.
The ratio of China's narrow-sense protection attributes (traditional life insurance + health insurance) to investment attributes (annuity insurance + investment payments) is 53:47.
In 2020, there were still 747 companies in the US life insurance industry conducting life insurance operations, and the number has decreased by 2/3 compared with the largest number in history in 1988 (2343).
Bankruptcy and mergers occur from time to time, reflecting the high marketization of the US life insurance industry. As the waves wash away the sand, the remaining life insurance companies often have strong risk management capabilities.
China's life insurance industry premium is about 60% of that in the United States, and only comes from 91 life insurance companies. In comparison, the number of Chinese life insurance companies is less than 1/8 of that in the United States.
In 2020, the number of employees in the US insurance industry reached 2.86 million, including 1.2 million intermediary agent-related personnel, 370,000 life insurance employees, 590,000 health insurance employees, and 690,000 other insurance institutions employees.
Compared with that in 2020, the number of agents in China's insurance industry alone reached 8.34 million, and the number of employees of the financial and life insurance company was about 870,000.
The number of agents in 2021 and 2022 degrees has been greatly compressed, and it is estimated that it has now dropped to about 4 million.
Next step, the number of agents may continue to decrease, and the reform direction must be the "three highs" direction that Ping An is now doing.
Asset structure and investment return
In 2020, the total asset scale of the US life insurance industry was about US$8.2 trillion, of which the scale of bond assets accounted for about 47%, and the scale of equity assets accounted for about 30%.
From the trend point of view, the proportion of equity asset allocation in the US life insurance industry has gradually increased, and it has basically stabilized at around 30% since 2010. As of the end of 2021, the total asset size of China's life insurance industry was approximately US$3.3 trillion. Among them, stock fund assets account for about 12% of the total asset size. Preliminary, it seems that the allocation of equity assets in the United States is higher. In fact, the US life insurance industry has general and independent accounts. In 2020, the scale of independent accounts in the United States was US$3.1 trillion, accounting for 37.8% of total assets; while the proportion of independent accounts in China was only 1.3%. The American Life Insurance Industry Association has announced the asset allocation status of two life insurance accounts. From the general account, the bond allocation in the US life insurance industry in 2020 was as high as 66.9%, while equity assets were only 2.3%. Even when the proportion of equity asset allocation was high in the 1990s, it was only about 5%. From the perspective of independent accounts, the proportion of equity assets in the US life insurance industry in 2020 was as high as 76.3%, while the proportion of debt assets was only 15.6%. Since the investment account does not promise a return on investment, all investment returns and investment losses are borne by the customer. While obtaining high returns, customers also bear the risk of investment losses. Therefore, investment-linked insurance is suitable for policyholders who have rational investment philosophy, pursue high asset returns and have high risk tolerance. In order to allow policyholders to obtain higher rates of return, life insurance companies often allocate a higher proportion of equity products in independent accounts of investment-linked insurance! Before , we issued a document specifically for related analysis, which can be seen in detail. Under the background of downward interest rates, how can American life insurance companies support their ROE? In addition, we also collected and compared the total investment return indicators of the life insurance industries in China and the United States. The total investment return rate of the US life insurance industry in 2020 was 3.9%, of which the total investment return rate of general account assets was 4.3%. In recent years, with the decline in US Treasury bond interest rates, the investment yield in the US life insurance industry has continued to decline. The total investment return rate of China's life insurance industry in 2020 was 5.5%, and it fell slightly to 4.8% in 2021, both higher than the total investment return rate of the US life insurance industry. Comparison of liability structure of China-US life insurance industry 022 The China Banking and Insurance Regulatory Commission newly announced the balance of funds used by China's life insurance industry and the details of some investment assets, among which the sum of the three items of stock, securities investment funds and long-term equity investment accounts for 22% of the investment funds.
In 2020, the debt scale of the US life insurance industry in the United States was 7.6 trillion US dollars, of which the insurance contract liability reserve scale was 6.1 trillion US dollars, accounting for more than 80% of the total liability ratio.
Among them, the insurance contract liability reserve liability of the general account is US$3.4 trillion, and the insurance contract liability reserve liability of the independent account is US$2.7 trillion.
From the perspective of the total insurance contract liability reserve structure of the two accounts, the proportion of traditional life insurance liability reserve gradually dropped from 72% in 1955 to 29% in 1990; correspondingly, the annual insurance liability reserve gradually increased from 18% in 1955 to 67% in 1990. (It should be explained that there are many variable annuities in independent accounts)
After that, the structural proportion of the two liability reserves is basically stable at this level.
In 2021, the debt scale of China's life insurance industry was about US$2.7 trillion, of which the insurance liability reserve liability accounted for 72%. From a historical trend, this structure accounted for a historical high.
We can also calculate the investment demand on the liability side through the US liability structure.
The liabilities of the US general account in 2020 were 4.6 trillion yuan, of which the liabilities for deposit-type contracts were approximately US$0.4 trillion;
The liabilities of the independent account were US$3.1 trillion, of which the reserve liabilities were as high as US$3.0 trillion.
Liabilities for deposit-type contracts liabilities (0.4) + independent account liabilities reserve liabilities (3.0) + general account annuity insurance insurance liability reserve (1.8) total size is approximately US$5.2 trillion, accounting for 68% of the total liabilities. In fact, behind the above liabilities of the US life insurance industry are investment demand. This shows that asset management has become the main business content of American life insurance companies. Since the insurance reserve liability data for annuity insurance cannot be withdrawn separately from the profit statement of China's life insurance company, we cannot give an estimate of the scale of investment demand behind China's liabilities.
Comparison of profits in the US life insurance industry in the United States
Net profit scale in the US life insurance industry in 2020 was US$39.7 billion, of which traditional life insurance contributed -2 billion US dollars, annuity insurance contributed US$19.7 billion, and Health insurance contributed US$17.7 billion.
It is worth noting that the contribution of net profit of traditional life insurance in the United States was negative for the first time.
Based on the statistics of the summary data of China's life insurance companies, the net profit of China's life insurance industry in 2020 was US$38.3 billion, and the net profit scale in 2021 was US$32.7 billion, similar to the scale of the United States.
In 2020, the ROE of the US life insurance industry was 7.6%, a year-on-year decrease of 4 percentage points, below the historical average (statistics in the past 22 years, the simple average is 11.5%);
In 2020, the ROE of the Chinese life insurance industry was 16.4%, and in 2021, it was 13.3%, both above the historical average (statistics in the past 12 years, the simple average is 12.1%). Since 2018, the ROE of China's life insurance industry has been significantly higher than that of the United States.
From the perspective of leverage ratio, the leverage ratio of the US life insurance industry in 2020 was 15.3, while China was 10.9 in the same period, and further increased to 11.5 in 2021.
The higher leverage ratio in the United States may be due to its higher independent account asset size.
Since independent account assets are at the customer's own risk, they will occupy less capital requirements, thus forming a higher leverage ratio.
Simple summary:
First, from the income side:
The scale premium structure of the US life insurance industry is: the proportion of traditional life insurance, health, annuities, and investment funds is roughly 15:20:31:34.
If both annuity and investment funds are regarded as investment attribute requirements, the ratio of the narrow guarantee attribute to the investment attribute is 35%: 65%.
Our traditional life insurance scale has exceeded that of the United States. my country's annuity insurance premium income is about half of that of the United States, and the scale of new investment payment fees is only 1/3 of that of the United States.
The ratio of China's narrow-sense protection attributes (traditional life insurance + health insurance) to investment attributes (annuity insurance + investment payments) is 53%: 47%.
Second, from the asset side:
In 2020, the total asset size of the US life insurance industry was about US$8.2 trillion, of which the scale of bond assets accounted for about 47%, and the scale of equity assets accounted for about 30%.
022 The China Banking and Insurance Regulatory Commission newly announced the balance of funds used by China's life insurance industry and the details of some investment assets, among which the sum of the three items of stock, securities investment funds and long-term equity investment accounted for 22% of the investment funds.
On the surface, the proportion of equity asset allocation in the US life insurance industry is higher. But in fact, the US life insurance industry includes general accounts and independent accounts, and the allocation of equity assets of the two accounts is very different.
General account equity assets are only 2.3%, while independent account equity assets account for as high as 76.3%.
The ratio of equity allocation differences between the two accounts in the United States is huge, mainly because independent accounts do not promise return on investment, and all investment returns and investment losses are borne by the customer.
So although on the surface, our overall equity allocation ratio is lower than that of the United States, because the United States has made structural segmentation, the investment risks of my country's life insurance companies may be higher than those of the United States.
In fact, there have been two waves of life insurance closures in the history of the United States.
Summary of these two bankruptcies, ultimately all are caused by the risk of interest rate spread loss.
It is also after these two bankruptcies that we have seen that the proportion of assets in independent account accounts in total assets has increased from 11.3% in 1990 to 38% now.
The United States has very low restrictions on public account equity assets, and increasing the proportion of equity assets in independent account assets may also be due to concerns about the risk of interest rate spread loss. The two waves of bankruptcy in
and some subsequent risk events have caused the number of life insurance companies in the United States to reduce from the highest number of 2,343 in history to the current 747.
Third, from the liability side:
In 2020, the liabilities for deposit-type contracts under the general account of the US life insurance industry were US$40 million, the liabilities reserves for independent account were US$300 million, and the annual insurance liability reserves for general account were US$180 million. The total size of the three was approximately US$5.2 trillion, accounting for 68% of the total liabilities.
In fact, behind the above liabilities of the US life insurance industry are investment demand.This shows that asset management has become the main business content of American life insurance companies.
Since the insurance reserve liability data of annuity insurance cannot be withdrawn separately from the profit statement of China's life insurance company, we cannot give an estimate of the scale of investment demand behind the liabilities of China's life insurance industry.
"Insurance is a guarantee" is certainly not wrong, but we cannot mention that investment is considered "investment is the devil, the opposite, and investing means not paying attention to protection."
In fact, the protection of longevity risks is to require long-term asset management. Of course, we need to emphasize that this asset management is long-term, not short-term financial management or speculation.
In fact, the most important opportunity for insurance companies in the future is to retirement, and retirement itself requires long-term asset management.
fourth, from the profit side:
In 2020, the net profit of life insurance in the United States was US$39.7 billion, while in the same period, China was US$38.3 billion. The net profit scale of the life insurance industries in China and the United States is comparable.
From 2018 to 2020, the ROE of China's life insurance industry was significantly higher than that of the United States.
A seemingly contradictory phenomenon is that the United States has a high leverage ratio and China has a high ROE.
From the perspective of leverage ratio, the leverage ratio of the US life insurance industry in 2020 was 15.3, while China was 10.9 in the same period, and further increased to 11.5 in 2021.
The higher leverage ratio in the United States may be due to its higher independent account asset size.
Since independent account assets are at the customer's own risk, they will occupy less capital requirements, thus forming a higher leverage ratio.
