Orient Securities has released a research report stating that listed insurers faced pressure on both the asset and liability sides in Q3 2026. On the investment side, affected by the equity market pullback and the high base from the same period last year, investment returns and net profit attributable to parent are expected to decline significantly; on the life insurance liability side, business growth is under pressure due to the high base of new single premium business in the same period last year and the recent turn to negative premium growth. From the perspective of the core insurance business, all five listed insurers achieved positive growth in new business value in H1 2026, and the combined ratio of major property and casualty insurers remained at around 95%, indicating that the core insurance business still provides some profitability support.
In terms of valuation, the rolling P/EV valuations of major A-share listed insurers are at relatively low historical levels, and the PB valuation of PICC is also below its historical average. Current valuations are already at historically low levels. As the equity market stabilizes and investment returns improve, the profitability of listed insurers is expected to gradually recover, and the sector has room for valuation repair. It is recommended to pay attention to allocation opportunities in the insurance sector against the backdrop of short-term earnings pressure. The main views of Orient Securities are as follows:
Equity Market Pullback Significantly, Listed Insurers' Investment Returns Face Considerable Pressure
The CSI 800 Index recorded changes of +19.8%, +13.7%, and -14.0% in Q3 2025, Q2 2026, and Q3 2026, respectively, with equity market performance in the third quarter significantly weaker than both the same period last year and the second quarter of this year. Listed insurers hold relatively large positions in trading-oriented stocks and fund assets, and equity market volatility has a significant impact on current-period investment returns. Among them, China Life and Ping An had trading-oriented stock and fund asset sizes of RMB 1,129.52 billion and RMB 1,029.53 billion, respectively, at the end of H1 2026, together accounting for 68.8% of the five listed insurers' total. The equity market pullback combined with the high base from the same period last year is expected to lead to a significant decline in listed insurers' investment returns in the third quarter.
Stock and Fund Capital Gains Expected to Drop Sharply in Q3, Insurance Contract Financial Gains and Losses Provide Partial Offset
Under the neutral scenario, the five listed insurers are estimated to record combined stock and fund capital gains of approximately RMB -396.23 billion in Q3 2026, of which China Life accounts for RMB -219.77 billion. Improvement in insurance contract financial gains and losses can offset part of the investment-side losses. It is estimated that compared with Q2 2026, stock and fund capital gains in Q3 2026 decreased by approximately RMB 785.22 billion, while insurance contract financial gains and losses improved by approximately RMB 345.79 billion, offsetting about 44.0% of the investment losses. Taking into account bond investment returns, credit impairments, and other gains and losses, the combined investment and insurance-related financial performance of the five companies is estimated at approximately RMB -224.07 billion.
All Five Listed Insurers Expected to Post Negative Net Profit Attributable in Q3, Cumulative Profit for First Three Quarters to Decline Significantly Year-on-Year
Under the neutral scenario, net profit attributable to parent for China Life, China Pacific Insurance, New China Life, and PICC in Q3 2026 is estimated at RMB -95.17 billion, RMB -5.89 billion, RMB -12.95 billion, and RMB -19.30 billion, respectively, with the five companies collectively recording a net loss attributable to parent of approximately RMB 152.13 billion. The decline in investment and insurance-related financial performance is the main reason for the earnings pressure in the third quarter, while insurance service performance continues to make a positive contribution. The five companies' cumulative net profit attributable to parent for the first three quarters is estimated at approximately RMB 165.26 billion, a year-on-year decline of 61.0%.
Risk Warnings
Deviation in equity investment return forecasts; insurance contract financial gains and losses offsetting less than expected; credit impairment losses exceeding expectations; life insurance new single premium business growth falling short of expectations; property and casualty insurance claims payouts exceeding expectations.