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Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

ZhongAn Online P&C Insurance C / Equity Bottom-Up

*June Premium: ZhongAn Online P&amp;C Insurance (6060.HK) [ZhongAn] reported June 2021 premium growth of 49% YoY, ending 1H21 with gross written premium (GWP) growth of 45% YOY. Two factors contributed to the overall growth: 1) COVID-19 recovery; and 2) the low base in 2020; and*Bottom-line Challenges Remain: The fact of the matter is that ZhongAn’s bottom-line remains challenged. Auto and Consumer Finance have decelerating and declining turnover growth given the continued COVID-19 business disruptions. While YOY combined ratio improved, the improvement came largely from credit insurance whose loss ratio declined from 97% in 2019 to 63%. Given the continued credit insurance headaches at PICC P&amp;C (2328.HK) and Ping An Insurance, we have a difficult time believing that little old ZhongAn has figured out the secret sauce to credit insurance risk.

*June Premium: ZhongAn Online P&amp;C Insurance (6060.HK) [ZhongAn] reported June 2021 premium growth of 49% YoY, ending 1H21 with gross written premium (GWP) growth of 45% YOY. Two factors contributed to the overall growth: 1) COVID-19 recovery; and 2) the low base in 2020; and*Bottom-line Challenges Remain: The fact of the matter is that ZhongAn’s bottom-line remains challenged. Auto and Consumer Finance have decelerating and declining turnover growth given the continued COVID-19 business disruptions. While YOY combined ratio improved, the improvement came largely from credit insurance whose loss ratio declined from 97% in 2019 to 63%. Given the continued credit insurance headaches at PICC P&amp;C (2328.HK) and Ping An Insurance, we have a difficult time believing that little old ZhongAn has figured out the secret sauce to credit insurance risk.

China Pacific Insurance (Group) Co., (601601 CH)

ZhongAn Online P&C Insurance – Still A Dumpster Fire