Bancassurance premiums are forecast to contract 40% quarter-on-quarter.
Ping An Insurance is expected to see its new business value (NBV) fall 44% year on year in the third quarter of 2026, as weaker premium growth weighs on its life insurance business, according to CGS International Securities (CGSI).
The forecast marks a sharper decline than CGSI’s previous estimate of a 27% drop. It follows a 21% increase in the first quarter and a 2% decline in the second quarter.
CGSI expects Ping An’s full-year NBV to remain flat year on year, revising its previous forecast of 11% growth. The brokerage said the insurer may prioritise a stronger sales campaign at the start of 2027 rather than push aggressively for sales at the end of 2026.
The weaker outlook reflects lower expected first-year premiums (FYP), with bancassurance FYP forecast to fall 40% quarter on quarter and agency FYP to decline 15% in the third quarter.
Despite the pressure on new business, CGSI expects Ping An’s operating profit after tax (OPAT) to benefit from higher dividend income from its bank investments. All six of China’s state-owned banks and China Merchants Bank have ex-dividend dates in the third quarter, compared with only three in the same period last year.
CGSI estimates that dividends from Hong Kong-listed bank investments will account for 20% of Ping An’s group OPAT in the third quarter, up from 12% a year earlier. The contribution to life insurance OPAT is expected to rise to 29% from 18%.
Another potential boost to second-half earnings is a reduction in asset management impairment losses. CGSI forecasts these losses to decline by $968.2m (RMB7.6b) year on year in the second half of 2026, equivalent to about 10% of the group’s operating profit after tax in the second half of 2025.
If realised, the reduction would mark the first half-on-half decline in impairment losses in the second half since 2019. CGSI said Ping An may have recognised a larger share of these losses in the first half of 2026.
The brokerage lowered its 2026 to 2028 net profit forecasts by 9.8% to 13.9% and cut its NBV estimates by 5.8% to 9.9%, citing weaker premium growth and higher expected effective tax rates. Its forecast for life insurance embedded value was also reduced by 2.1% to 2.6%.
CGSI maintained its Add recommendation on Ping An but cut its target price to $9.04 (HK$71) from $9.94 (HK$78). The revised target represents a potential upside of about 44% from the share price of $6.27 (HK$49.20) cited in its 20 October report.
The brokerage said stronger insurance demand and a recovery in life insurance operating profit could support the insurer’s performance over the next three years. However, lower bond yields, weaker investment returns and further weakness in China’s equity market remain risks.
($1 = HK$7.85)