Cathay Pacific Haitong: Industry concentration is expected to increase, optimistic about the chances of repairing low valuations of leading insurers

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the “Insurance Law (Revision Draft for Comments)” focuses on improving shareholder restraint, prudential supervision, risk handling, consumer protection, etc. It is expected that the market will pay more attention to the capital strength and governance level of insurers, which is beneficial to leading insurers. The industry concentration is expected to increase. It is optimistic about the chances of repairing low valuations of leading insurers and maintaining the industry's “gain” rating.

Cathay Pacific Haitong's main views are as follows:

The overall interim results of listed insurers were in line with expectations, and insurance stocks performed steadily under style rebalancing

From August 28 to September 11, the Shenwan Insurance Index (801194.SI) fell from 1222.61 to 1212.55, a range decline of -0.82%. Over the same period, the Shanghai and Shenzhen 300 rose and fell -2.15%, the Shanghai Composite Index -1.62%, and the Hang Seng Index -3.05%. The disclosure of insurance companies' interim reports has been completed. The differentiation in profit performance is mainly brought about by differences in equity strategies. Mid-term dividends generally reflect a steady focus on shareholder returns, and the core operating indicators of production and life insurance are improving overall. The current insurance stock price still reflects more the impact of the external environment than the results of internal operations. In the context of style rebalancing, we continue to be optimistic about sector valuation repair opportunities.

The General Administration of Supervision's “Insurance Law (Revision Draft for Comments)” solicited public comments, and five central insurance companies received capital increases from the Ministry of Finance

1) According to August 28 data, in a new round of QDII quota expansion, insurance institutions added an investment quota of US$1.36 billion; 2) Central Bank data showed a steady year-on-year increase in total assets and liabilities of the insurance industry at the end of the second quarter, +11.8%/+12.2% respectively; 3) On September 4, the General Administration of Financial Supervision publicly solicited comments on revisions to the “Insurance Law (Draft Revision Draft for Comments)” to improve industry supervision, risk management and consumer protection mechanisms in multiple dimensions. 4) On the same day, the Information Office of the State Council held a series of press conferences on the theme of the “Getting Started” series, stating that China's long-term care insurance system has achieved outstanding results, covering more than 320 million insured people and benefiting more than 4.6 million disabled people. 5) On September 6, it was announced that the Ministry of Finance plans to increase the capital of five central insurance companies by a total of 70 billion yuan to consolidate the industry's capital strength and risk resilience.

China People's Insurance increased the allocation of A-share equity in the first half of the year, and Guo Shi was approved as the deputy general manager of AIA Life

1) On August 31, China Insurance revealed at the interim results conference that in the first half of the year, a net increase of about 30 billion yuan in A-shares positions was completed, and the investment outperformed the China Securities A500 Dividend Index; 2) On September 8, Guo Shi was approved as AIA Life's Deputy General Manager in August 2026.

Risk warning: The improvement in debt costs fell short of expectations; the sustainability of customer insurance savings demand fell short of expectations: long-term interest rates declined; equity market fluctuations.