Key Takeaways
China Life Insurance Co. is expected to see its first-quarter net profit plunge 41% year-over-year, according to a new Morgan Stanley report forecasting divergent results for Chinese insurers.
"Chinese insurers are expected to record solid growth in after-tax operating profit in 1Q26, but their net profit growth may diverge due to stock market volatility," the investment bank said in its report.
The report projects a 34% profit slump for PICC Group, a 20% fall for PICC P&C, a 16% drop for NCI, and a 10% decrease for Ping An. In contrast, China Pacific Insurance Co. (CPIC) may see a 1% profit increase.
The expected declines are primarily driven by stock market volatility. CPIC's anticipated resilience is credited to a lower equity allocation and a prudent investment strategy, the report noted.
Despite the net profit headwinds, Morgan Stanley anticipates that the value of new business should remain healthy, particularly for larger insurers, with continued improvement in business quality. Property and casualty insurers are expected to deliver satisfactory combined ratios.
The bank also forecasted relatively solid performance in after-tax operating profit for CPIC and Ping An, with Ping An's estimated to grow by 3.6% on the back of stable life insurance operations.
The forecast highlights the sector's vulnerability to equity market swings. Investors will be watching the insurers' official first-quarter results closely to see how investment strategies have mitigated market impact.
This article is for informational purposes only and does not constitute investment advice.
