SHANGHAI/BEIJING (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, as its premium income shrank on a weak economy and profit was eaten by losses on investment assets.
Net profit fell to 23.6 billion yuan ($3.69 billion) in the three months to September 30 from 34.4 billion a year earlier, according to company’s exchange filing on Wednesday.
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.
Investors’ confidence in Ping An has been shaken over the past year on growing concerns about its investments in highly indebted property developers, as many face a liquidity crunch amid a crackdown by Beijing on unbridled borrowings in the sector.
“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.
“Household consumption shrank quarter on quarter, affecting the long-term protection business of Ping An,” it added.
Capital market volatility and increasing impairment provisions on investment assets weighed on the yields on company’s investment portfolio of insurance funds, too, it said.
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 and casualty insurance income fell 9.2% to 199.3 billion yuan, according to company filings.
Its Hong Kong and Shanghai shares both are down by about 40% year-to-date, versus a 2.6% gain in the benchmark Shanghai Composite Index and 6% loss in Hang Seng index during the same period.
(Reporting by Zhang Yan, Cheng Leng and Engen Tham; editing by Jason Neely)
