Chinese insurance stocks continued their recent decline today. As of press time, NCI (HKG: 01336) fell 3.59% to HK$38.08, PICC GROUP (HKG: 01339) dropped 2.66% to HK$4.76, CHINA LIFE (HKG: 02628) declined 2.08% to HK$22.62, and China Pacific Insurance (HKG: 02601) slipped 1.85% to HK$25.42.

On the news front, both A-share and H-share markets significantly underperformed the same period last year in the third quarter of this year, and with insurers continuously increasing their equity allocation scale, this is expected to have a substantial impact on profits. A research report from Shenwan Hongyuan pointed out that under the influence of a high base, the new version of the "reporting, operation, and unified management" rules, and equity market volatility, pressure on third-quarter earnings growth has become a consensus view.

Huachuang Securities believes that on the liability side, new policy premiums are expected to contract significantly in the third quarter under the impact of the high base and the new regulations of Document No. 65 on bancassurance, dragging down NBV growth. For property insurance, catastrophe claims are expected to rise year-on-year under strong El Niño conditions. The "reporting, operation, and unified management" rules are expected to bring expense optimization but will not fully offset the negative impact on the claims side.