China’s top insurers saw their collective profit plunge by almost $5 billion last year as key investment income took a hit from volatile markets and the economic damage wrought by Beijing’s zero-COVID policies, reports Nikkei Asia. Five out of six Hong Kong-listed Chinese insurers all saw their net profit drop in 2022, with China Life, New China Life, China Pacific Insurance and China Reinsurance saying this week that earnings were more than RMB 30 billion ($4.38 billion) lower than in 2021.
Hong Kong-headquartered China Taiping, meanwhile, said its net income fell HK$4.71 billion ($600 million)—totaling a year-on-year drop of $4.98 billion for all five companies. Some of the shortfall is linked to a drop in the fair value of insurers’ equity holdings as of the end of 2022, but they are unrealized losses until those companies sell them.
The slump underscores how Chinese insurers, despite focusing on domestic investment, are not immune from global turbulence. China’s stock market entered a deep correction last year, with major indexes falling sharply in late October. Onshore bonds were less attractive against the rise of US bond yields.
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