高盛：中国保险行业08年展望

On a roll into 2008 on four fronts; affirm positive stance
While China insurance stocks are trading at high valuation multiples and
may face further A/H market corrections (China tightening/US subprime
concerns), we remain holders and would buy on pullbacks, as we believe
insurers will remain on a roll in 2008 given intact structural/cyclical drivers:
1. Life insurance new business value (NBV) growth should stay robust
(24%-26% in 2008E) due to strong first-year premium (FYP)/annualized
premium equivalent (APE) growth and new business margin pickup,
thanks to new products, rural expansion and business mix improvement.
2. P&C underwriting profits are set for strong growth (74%-173% in 2008E)
given continued pricing recovery and loss ratio improvement.
3. Core investment yields (ex-equity gains) should structurally improve
given continued rate hikes (54bp more this year), new investment channels
(QDII, private equity, infrastructure projects, properties), and corporate
bond market reforms (likely to increase bond supply and yields).
4. Business diversification (e.g. banking/trust for Ping An; P&C for China
Life; life insurance for PICC) should reduce earnings dependence on Ashares
and unlock the value of excess capital over time.