J.P. Morgan: Ping An Life’s new business under pressure, but JPMorgan still expects profit and dividend growth

What changed in life insurance sales?

In the first three quarters of 2026, life insurance sales measured by first-year premiums fell 9% year on year, and the new business margin declined by 1.2 percentage points to 24%, together causing new business value to fall 13% year on year.
JPMorgan cut its 2026 new business value growth forecast from 38% to 2% and lowered its product margin assumptions for 2027–2028: the current market environment, dominated by participating insurance products, is less favorable for margin improvement.
The bank still expects new business value to grow 24% in 2027, citing management’s confidence in a first-half recovery, a gradual increase in agent numbers and a normalization of sales through the bancassurance channel.

Life insurance contributes about two-thirds of the group’s core earnings. Slower sales of new policies affect the contractual service margin (CSM) balance, a reserve that is gradually released as profit as insurance services are provided.
JPMorgan expects the CSM balance at the end of 2026 and 2027 to grow 0.9% and 3.1% year on year, respectively. It has pushed back its forecast for when CSM added by new business will exceed the amount released in the period from the end of 2027 to the end of 2028.
Following revisions to its life insurance CSM forecasts, the bank cut its forecasts for group operating profit after tax in 2026–2028 by 1%, 2% and 3%, respectively. After the revisions, it still expects year-on-year growth of 11%, 12% and 12% in the three years.

Group operating profit after tax was 41.71 billion yuan in the third quarter of 2026, up 8% year on year. Life and health insurance grew 12%, property and casualty insurance posted a loss of 4.076 billion yuan, and asset management earned a profit of 10.251 billion yuan.
JPMorgan believes lower impairment losses or improved asset management profits could contribute to growth in businesses outside life insurance. However, asset management impairment losses were 7.5 billion yuan in the first half of 2026, above 1.3 billion yuan in the same period a year earlier.
Non-standard assets in the investment portfolio fell from 5.5% of assets under management at the end of 2025 to 5.0% in mid-2026. On the other hand, equities and non-standard assets still accounted for a combined 24%, and the bank also cited higher equity investment exposure as one reason for pressure on the share price.

At the end of September 2026, the core solvency adequacy ratios of Ping An Life and its property and casualty insurer were 138% and 164%, respectively. JPMorgan expects the core ratios of the group and both insurers to remain above 100% through the end of 2028, above the minimum requirement of 50%.
The holding company held 81.7 billion yuan in cash at the end of June 2026. The bank forecasts dividends per share of 2.98 yuan and 3.37 yuan for 2026 and 2027, respectively, implying forecast H-share dividend yields of approximately 7% and 8%.
As of the report, H shares had fallen 24% year to date, while the Hang Seng Index had fallen 9% over the same period. JPMorgan believes a life insurance recovery and lower impairment risk could drive a valuation recovery. It maintains overweight ratings on the H and A shares, with end-2027 target prices of 98 Hong Kong dollars and 91 yuan, respectively; a weaker-than-expected sales recovery and the impact of macroeconomic volatility on capital are the main constraints.