At the same time, the reporter of the Securities Times learned that under the circumstances of more immediate factors and bad short-term market judgment, more and more insurance companies choose to lengthen their eyes on stock investment, and from a long-term judgment, they believe that there are opportunities in the stock market. Therefore, the selection of core assets and long-term holding become more and more common investment strategies in insurance stock market.
Digest the stock float and loss accumulated last year
As the stock market fell sharply last year, the investment in the secondary stock market showed a floating loss, which became a big potential risk faced by the insurance industry at the beginning of this year. Securities Times reporters have previously learned that insurance companies at the end of last year clearly put forward this years major investment task is to resolve the risk of equity investment in the open market.
Fortunately, in the first half of this year, especially in the first quarter of this year, the stock market has witnessed a rapid upward trend, which has helped insurance companies successfully defuse the risk of floating losses and turn losses into profits. Recently, the semi-annual report of listed insurance companies has been published, which provides reference information in this respect.
Floating profits and losses are unrealized Book gains and losses other than realized gains of financial assets that can be sold. A senior executive of a small and medium-sized insurance management company told reporters that floating profit and loss have two calibers: one is historical accumulated floating profit and loss, which is relative to cost; the other is the fluctuation of floating profit and loss in that year, which is relative to the book value at the beginning of the period. The former is used to evaluate the accumulated profit and loss of related investment together with realized income, while the latter is used to calculate the comprehensive investment income of that year together with realized income of that year.
From the profit and loss of fair value changes of financial assets available for sale, China Life Insurance, China Insurance and Xinhua Insurance have all changed from floating loss to floating profit, while China Pacific Insurance has increased its floating profit by a large margin. The total floating profit of these four insurance companies in the first half of the year was 49.4 billion yuan, compared with 7.5 billion yuan in the same period last year.
It is worth pointing out that the financial assets available for sale are not entirely stocks, but the changes in their fair value can be used as a reflection of the floating returns of insurance investment in the stock market.
Composite rate of return increased substantially
The senior executives of the above-mentioned insurance management companies told reporters that last years stock market fell, and many insurance institutionspositions had accumulated floating losses; this years stock market rose, the floating losses of positions decreased, and the comprehensive investment returns (including the floating gains and losses of changes in the value of financial assets available for sale) were good, but the financial investment returns (listed insurance) were good. Enterprise caliber for total investment income) may not necessarily be high.
There are two calibers of return on investment issued uniformly by listed insurance companies: one is net investment income, including all kinds of interest income, dividend and dividend income of equity investment, rent income, etc. which have been realized; the other is total investment income, which is net investment income plus profit and loss of fair value change, and the difference between buying and selling of securities. And so on.
However, net investment income and total investment income do not include floating profit and loss performance, but the index of floating profit and loss is comprehensive income.
From the continuous issuance of the comprehensive return rate of life insurance companies in China, we can see the contribution of their investment buoyancy in the first half of this year intuitively. The semi-annual report of China Life in 2019 shows that the comprehensive return rate of investment is 8.24% after considering the net change of the fair value of the sellable financial assets that include other comprehensive returns in the current period. That is 4.63 percentage points higher than the same period in 2018.
At the same time, many insurance investors said that although the indicators that can reflect floating profits and losses are strictly not included in the current profits and losses of the fair value change gains and losses of sellable financial assets, the fair value change gains and losses that are included in the current profits and losses can also reflect the changes in investment performance, corresponding to the tradable funds. The value change of financing assets can also be used as an observation index.
From the perspective of the five listed A-share insurance companies, the profit and loss of fair value change in the first half of last year was - 191 billion yuan, and it turned into 41.3 billion yuan in the first half of this year. The value change of this kind of financial assets has made a positive contribution to the profits in the first half of this year.
Persist in long-term investment
Cash Floating in Two Cases
For the operation of the stock market in the second half of the year, after the mid-term performance release, listed insurance companies generally indicate that they will tend to choose the core assets and long-term holding strategy.
Zhao Peng, Vice President of China Life, said that in the second half of the year, we will continue to seize the opportunity to lay out long-term core assets, pay attention to the high-quality targets of more industries, make financial investments, increase investment returns, reduce investment volatility, and strengthen management in the investment portfolio to control risk exposure.
Wang Hao, president of PICC Assets, said that the company focused on long-term investment, high dividend, low valuation and stable profitability of stocks, focusing on listed companies that can optimize the investment structure and integrate with insurance business. Yang Zheng, Vice President of Xinhua Insurance, said that in the complex market environment affected by multiple factors in the first half of the year, the company was not in a hurry to adjust its warehouse. For those who believed that it had long-term holding value, the company would continue to hold and depreciate the value of the impairment in the assets available for sale, which was an established strategy. When dealing with floating assets, the insured capital will generally be realized on the basis of long-term investment strategy according to the situation. A senior executive of a large insurance company told reporters that liquidity will be realized under two considerations: one is based on market judgment, when there is little room to continue to rise, it will choose liquidity; the other is based on its own financial needs, if there is a requirement for financial returns, it will also be liquidated. Source: Responsible Editor of Securities Times: Yang Bin_NF4368
Wang Hao, president of PICC Assets, said that the company focused on long-term investment, high dividend, low valuation and stable profitability of stocks, focusing on listed companies that can optimize the investment structure and integrate with insurance business.
Yang Zheng, Vice President of Xinhua Insurance, said that in the complex market environment affected by multiple factors in the first half of the year, the company was not in a hurry to adjust its warehouse. For those who believed that it had long-term holding value, the company would continue to hold and depreciate the value of the impairment in the assets available for sale, which was an established strategy.