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<Research>JPM: Decline in Core Solvency Ratio May Affect CN Insurers' Div.; CHINA LIFE/ PING AN Preferred
Recommend 25 Positive 34 Negative 13 |
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The core solvency ratios of several Chinese insurers declined QoQ in 3Q25, with an average decrease of 9 ppts, JPMorgan released a research report saying. The rebound in China's bond yields negatively impacted the solvency of several insurers, but strong earnings and reserve growth helped mitigate this effect. The core solvency ratios of major Chinese life insurers/ non-life insurers hiked by -16 ppts/ +3 ppts QoQ respectively, the report noted. Insurance company management teams have taken various measures in response, including issuing perpetual bonds, reducing equity risk exposure and broadly decreasing non-standard asset balances. Although major insurers reported strong earnings growth in 1-3Q25, the volatility in solvency capital could be a key offsetting factor for year-end dividend forecasts, particularly for small and medium-sized life insurers. The broker preferred CHINA LIFE (02628.HK) due to its strong earnings and conservative solvency capital management. JPMorgan also favored PING AN (02318.HK) based on its YTD underperformance and a dividend yield forecast of 6% for 2026, leading the industry. AASTOCKS Financial News Website: www.aastocks.com |
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