Yesterday, Ping An surged by the daily limit, driving a significant rise in several insurance stocks.
Ping An, a stock with a market value approaching one trillion yuan, actually hit the daily limit. This is the first time Ping An has hit the limit since 2015, which is quite rare.
I have a 10% position in insurance stocks. Let's talk about the reasons behind Ping An’s daily limit, whether the insurance sector trend is sustainable, and thoughts on the market impact brought by Ping An’s rise.
01 Reasons for the Price Surge
First, the sluggish share price of Ping An in recent years has been largely due to internal reforms being pushed within the company’s insurance operations.
In 2018, Ping An’s leader Ma Mingzhe proposed 'life insurance reform.' Since then, Ping An’s share price has seen more declines than increases, becoming one of the so-called 'Three Fools' of A-shares.
Before 2018, 'insurance sales' had always been a much-criticized profession.
One reason is that the overall quality of practitioners was not high, with many people taking on this role as a form of 'flexible employment.'
Second, sales tactics were often unwelcome. Salespeople frequently used personal connections to push products onto relatives and friends, causing annoyance.
Third, their professional capabilities were weak. In order to close deals, they recommended products that did not meet customers’ needs.
After Ping An proposed the 'life insurance reform,' the situation mentioned above began to change.
One key aspect is the creation of a new bancassurance channel, making Ping An Bank a sales channel for Ping An Insurance.
Banking professionals are mostly highly educated. Whether it's in terms of academic qualifications, expertise, or service, they are above the societal average.
After four years of painful reforms and declining performance, Ping An’s new business value has finally reached an inflection point, with a year-on-year increase of 8.8%.
Anyone who has purchased insurance knows that an insurance contract typically lasts for ten years...