[ET Net News Agency, 30 October 2020] BOCOM International Research lowered its target
price for PICC Property & Casualty (02328) to HK$7.5 from HK$9 and maintained its "buy"
rating.
The research house said PICC P&C's net profit fell 21% and underwriting profit missed in
9-month. It recorded an underwriting loss in 3Q. In the short term, the comprehensive
reform of auto insurance has squeezed premium growth and underwriting profit, but the
small-to-medium P&C insurers cannot keep sacrificing profit for market share.
BOCOM expects PICC's combined ratio of auto insurance to remain stable given its scale
advantage. For credit guarantee insurance, as it terminates legacy business and implements
strict underwriting standards for new business, the drag on underwriting profit should be
mitigated in 2021. (KL)