Advertisement
China stock market
BusinessChina Business

Chinese insurance stocks back in favour after sector delivers best first-quarter result in five years

  • A gauge of five insurers trading on the Shanghai Stock Exchange has risen 22 per cent since the start of April
  • ‘Firmly positive on the sector,’ Shanghai-based analyst says

Reading Time:3 minutes
Why you can trust SCMP
China Life Insurance, the biggest firm in the industry by market value, reported an 18 per cent rise in stocks in the first quarter. Photo: ImagineChina
Zhang Shidongin Shanghai
Chinese insurance stocks have emerged as new bets for traders, with the sector posting its best first-quarter result since 2018 amid increased demand for insurance products and better investment returns.
Advertisement

A gauge of five insurers trading on the Shanghai Stock Exchange has risen 22 per cent since the start of April, according to data compiler Shanghai DZH. The benchmark Shanghai Composite Index has gained about 2 per cent in the same time span.

The outperformance came after the five listed insurers posted an at least 18 per cent year-on-year rise in profits in the first three months of 2023, which Industrial Securities said is the best start to a year in five years. That dwarfed an average of 2.7 per cent first-quarter profit growth at all publicly traded companies on China’s onshore market.
China Life Insurance, the biggest firm in the industry by market value, reported an 18 per cent increase in the first quarter, while the best performer was the People’s Insurance Co of China (PICC), which registered a 230 per cent increase.

Insurance stocks are a direct beneficiary of the removal of China’s strict Covid-19 curbs late last year after a period of three years. Sales agents have been able to reach potential clients to promote and sell insurance products without restrictions on mobility, while a rebound in the stock market has also reaped better investment returns for the sector. New business value (NBV), a key gauge of insurers’ future profits, returned to growth in the first quarter for the first time in three years, according to CCB International.

Advertisement
Advertisement