Market losses shake earnings at Ping An, China Life Insurance and peers as lockdowns hit riskier bets in investment pools
- Earnings at some of China’s biggest insurers fell by as much as 79 per cent as lower asset prices eroded returns from investment pools
- The battle to stamp out Covid-19 outbreaks and the ongoing restructuring of agency force are likely to cloud outlook, analysts said
Earnings at China Life Insurance, the second largest, slid almost 47 per cent to 15.2 billion yuan. Income from its pool of 4.72 trillion yuan of investment assets fell 27 per cent during the quarter.
“The big drop is pressuring their whole-year performance,” said Gigi Chen, insurance analyst at CMB International. “In the short term, the impact of the pandemic will still hurt. It will be difficult for life insurance businesses to develop as it relies on face-to-face sales by agents.”
Stock losses have deepened this year amid recession fears as Covid-19 lockdowns upended supply chains and forced factory closures. They added to a broad sell-off in 2021 caused by China’s crackdown on the tech sector. At the same time, bond prices also suffered amid a surge in debt defaults and risk premium.
The CSI 300 Index, which tracks the 300 largest listed companies in mainland China, had its worst three months since the third quarter of 2015. The Shanghai Composite Index fell 10.7 per cent, the most since the fourth quarter of 2018.
