Orient Securities: Equity market pullback drags on investment returns, listed insurers face pressure on Q3 profits

Orient Securities released a research report stating that in 3Q26, listed insurers face pressure on both the asset and liability sides. On the investment side, affected by the equity market pullback and the high base in the same period last year, investment income and net profit attributable to parent are expected to decline significantly; on the life insurance liability side, affected by the high base of new business in the same period last year and the recent turn to negative premium growth, business growth faces pressure. From the perspective of the core insurance business, in 1H26 all five listed insurers achieved positive growth in new business value, and the combined ratio of major property and casualty insurers remained at around 95%, so the core insurance business still has certain profit support. In terms of valuation, the rolling P/EV valuations of major A-share listed insurers are at relatively low historical levels, and PICC's PB valuation is also below its historical average. Current valuations are already at historically low levels; as the equity market stabilizes and investment income improves, the earnings of listed insurers are 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.