We expect low interest rates to depress
investments and we cut our forecasts
accordingly
􀀗 Remain OW(V) on Ping An, CIIH, and
China Pacific, N(V) on PICC and China
Life; downgrade Ming An to N(V)
􀀗 Recommend an event-driven approach,
as market volatility provides trading
opportunity
Year 2008 was a pain to the Chinese insurers. As if the stock
market crash wasn’t destructive enough, they went through
four deposit rate cuts totalling about 200bp in the last quarter
amid an economic downturn. We have cut our forecasts to
reflect the slowing growth and investment strain.
The crisis is forcing the industry to go back to the basics –
making money from pricing risks and controlling costs
rather than equity gains. We expect competition to ease and
underwriting to improve on tougher CIRC supervision.
We roll over our valuations to 2009e and downgrade Ming
An to N(V). Our ratings remain unchanged for the rest.
As we believe the market reacts more to news than to
fundamentals, we recommend an event-driven strategy.
Results announcements, acquisitions, accounting changes,
and fund-raising are likely to provide trading opportunities.
We highlight in the report events that are unique to the
insurance industry and to our coverage. Longer term, we are
positive about China’s insurance industry. But we believe
investors could make use of market volatility to make money
in both directions.

目录

Investment summary 3
A fundamental view 3
An event-driven approach 4
Valuation 6
Industry outlook 8
A year in review 8
2009 outlook 9
Not all doom and gloom 11
Company section 13
China Pacific 19
CIIH 23
Ming An 27
PICC 31
Ping An 35
Disclosure appendix 40
Disclaimer 43