HK Stock Market Move | Property insurance stocks across the board fell, sparking market turmoil as insurers faced pressure from end-of-quarter solvency assessment. Institutions warned against exaggerating the impact.

Domestic insurance stocks fell across the board. As of the time of writing, China Life Insurance (02628) fell 7.03% to HK$26.2; New China Life Insurance (01336) fell 6.55% to HK$48.08; China Pacific Insurance (02601) fell 5.88% to HK$31.4; and PICC P&C (02328) fell 2.95% to HK$14.78. On the news front, there have been reports recently that small and medium-sized insurance companies have reduced their positions due to the new solvency rules, which may be one of the main reasons for the turbulence in the A-share market. Western analysts believe that the recent adjustment in the A-share market has been influenced by the disturbance caused by the pressure of solvency assessment on some insurance companies at the end of the quarter, but the impact should not be exaggerated. The passive reduction pressure will gradually ease. The insurance companies' 2025 annual reports will be disclosed intensively next week, with strong certainty of performance growth, suggesting a bearish stance. Shenwan Hongyuan Group released a research report stating that as of January 1, 2026, non-listed insurance companies (unless there are special reasons) will fully implement the new accounting standards. The industry is still in an adaptation period after the implementation of the new standards, and it is expected that there will be some time before the new solvency regulations are implemented. In recent years, regulators have gradually relaxed restrictions on solvency and external capital increase limits in response to the operational needs of insurance companies. With the recent volatility in the capital markets, some insurance companies may have a temporary need to adjust their secondary market equity allocations. It is expected that the normal operating phenomenon of maintaining sufficient solvency and reasonably controlling risk exposure as the end of the quarter approaches will prevail. Overall, the trend of insurance funds entering the market in a low interest rate environment is expected to continue, and the methods of entering the market are likely to become more diverse.