Ping An Insurance sees 31.2% profit drop

(Reuters) — Ping An Insurance Group Co. of China Ltd., the country’s largest insurer by market value, posted a 31.2% fall in third-quarter net profit on Wednesday as its premium income shrank on a weak economy and profit was dented by losses on investment assets.

Net profit fell to 23.6 billion yuan ($3.7 billion), compared with 34.4 billion yuan in the year-earlier period, according to an exchange filing.

It marks the company’s worst quarterly profit fall since the first quarter of 2020.

Ping An’s insurance business and investment returns have been hit by weakness in China’s economy, which posted its slowest growth in a year in the third quarter as power shortages and property sector worries took a toll.

“The foundation for economic recovery requires further consolidation against the backdrop of a complicated international environment, sporadic COVID-19 outbreaks in China, and the impact of natural disasters including floods,” Ping An said in the filing.

Ping An’s premium income from life insurance in the first nine months declined 3.5% year-on-year to 364.5 billion yuan, while property/casualty insurance income fell 9.2% to 199.3 billion yuan, according to company filings.

Investors’ confidence in Ping An has been shaken over the past year on growing concerns about its investments in a highly indebted property sector that faces a liquidity crunch amid a crackdown by Beijing on unbridled borrowings.

Chinese regulators are Ping An’s investment in the property market, and ordered it to stop selling alternative investment products, which are typically tied to the property market, Reuters reported.

Some analysts caution that the total property exposure of Ping An is much higher than revealed and still underestimated by the market.

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