Following the "New Nine Measures," listed insurance companies have been joining the ranks of mid-term cash dividends.

After Xinhua Insurance (601336.SH,01336.HK),recently,China People's Insurance (601319.SH,01339.HK) and China Life (601628.SH,02628.HK) both announced that they will implement mid-term dividends in 2024.In addition to China Ping An (601318.SH,02318.HK),which has been implementing mid-term dividends for many years,by the end of June,four out of the five major listed insurance companies on the A-share market have determined to carry out mid-term dividends for 2024.

Industry analysts have indicated that some listed insurance companies,such as China Ping An,already have a high dividend yield and have always been "big dividend payers" in the capital market.Increasing the frequency of dividends is not only a response to policy calls but also enhances the sense of gain for investors,reflecting the confidence of managers in the company's future development.It is expected that this will become an industry trend in the future,and the dividend yield of listed insurance companies is also expected to increase further.

Listed insurance companies follow mid-term dividends

In April 2024,the State Council issued the "Several Opinions on Strengthening Regulation,Preventing Risks,and Promoting High-Quality Development of the Capital Market" (hereinafter referred to as the "New Nine Measures"),one of the key points of which is to strengthen the supervision of cash dividends of listed companies.Measures to promote an increase in dividend yield and to encourage multiple dividends within a year have attracted particular attention from the market.

After that,some industries quickly responded to the policy call to increase mid-term dividends,and the insurance industry is one of them.

At the end of May,Xinhua Insurance took the lead in issuing a board resolution stating that,based on the reviewed financial report for the first half of 2024,considering the current performance,capital situation,and risk control indicators,the company will implement mid-term dividend distribution for the year 2024,provided that there is distributable profit for the half-year.The total mid-year dividend will not exceed 30% of the net profit attributable to the shareholders of the parent company for the half-year of 2024.This has become the first company among listed insurance companies to announce an increase in mid-term dividends after the New Nine Measures.

At the end of June,China Life and China People's Insurance issued announcements on the same day,stating that they will distribute cash dividends to all shareholders,provided that there is distributable profit for the half-year of 2024.

In addition,among the five major listed insurance companies on the A-share market,China Ping An has been implementing mid-term dividends for many years.Thus,by the end of June,four out of the five major listed insurance companies on the A-share market have planned to implement mid-term dividends.

Fangzheng Securities analysis states that mid-term dividends are expected to become an industry trend for the following reasons: First,mid-term dividends are in line with national policies and regulatory orientations such as the "New Nine Measures" and the "Guidelines for Cash Dividends of Listed Companies." Second,the mid-term dividend policy helps to enhance the stability,continuity,and predictability of dividends under the increased profit fluctuations of insurance companies.Third,mid-term dividends are beneficial for smoothing the cash flow of investors and enhancing the sense of gain for investors."Mid-term dividends not only reflect the company's emphasis on shareholder returns but also indicate the management's confidence in the short-term operational stability and long-term development certainty of the company," said Fangzheng Securities.For the only one among the five major insurance companies that has not yet made a dividend "sound," China Pacific Insurance (601601.SH,02601.HK),some industry insiders have analyzed that the company may be considering the recent issuance of 8 billion yuan in large unfixed-term capital bonds by China Pacific Life Insurance and has not yet increased the interim dividend.However,the person also said that according to the announcements of the listed insurance companies in this round,when considering the annual dividend after the interim dividend,the company will take into account the factor of the interim profit distribution that has been paid out.Therefore,when measuring insurance companies,not only has the dividend frequency increased,but also the "real money" dividend amount has increased,it is also necessary to consider the overall situation on an annual basis.

The dividend of listed insurance companies continues to improve

Even before increasing the interim dividend,listed insurance companies have always been classified as "big hands" in the market's dividends.Statistical data show that in 2023,the five major listed insurance companies plan to cash dividends totaling 75.5 billion yuan,accounting for about 45.6% of the total net profit attributable to the parent company.

Data from the Listed Companies Association show that in 2023,3,859 listed companies issued annual,quarterly,and special cash dividend plans,with an average dividend ratio of 36.91% for dividend-paying companies.Overall,the dividend level of listed insurance companies is far higher than the average level of A-share listed companies.

From the dividend data of several listed insurance companies,the overall situation also shows a continuous upward trend.

Among them,China Ping An,which has already implemented the interim dividend,has seen a continuous increase in the total dividend for 12 consecutive years,with a compound growth rate of 25%.According to the dividend level of the five major listed insurance companies in A shares in 2023 calculated by the first financial reporter based on the closing price on June 28,the current dividend yield of China Ping An is 5.88%,and the dividend rate in 2023 exceeds 50%.

In addition,China Pacific Insurance and China Life also stated that since going public,the total dividends have broken through the 100 billion yuan mark,with China Pacific Insurance's dividends reaching 108.891 billion yuan,and China Life's dividends are as high as 190 billion yuan.

From the performance of dividend yield and dividend rate,the current dividend yield of China Pacific Insurance is 3.66%,and the dividend rate of China Life is 58%,both of which are good dividend performances in the A-share market.

In addition,the dividend rates of China People's Insurance and New China Life Insurance have also reached the level of 30%.

Huafu Securities said that in addition to the A-share market,the dividend yield performance of domestic insurance companies in the H-share market is also good.The dividend yields of China Life,China Ping An,China Pacific Insurance,New China Life Insurance,and China Property Insurance H shares are approximately 4.3%,7.5%,5.9%,6.3%,and 5.5%,respectively.Now,the increase in dividend frequency further sends a positive signal to the market,and it is expected that the dividend yield of each insurance company is expected to be further improved in the future.