(Bloomberg) -- Ping An Insurance (Group) Co., China’s largest insurer by market value, said profit fell 29% last year as troubled property investments and a slowdown in its key life business weighed on revenue.

Net income dropped 29% to 101.6 billion yuan ($16 billion), the Shenzhen-based company said in a filing Thursday. That missed the 116.6 billion yuan average estimate of analysts surveyed by Bloomberg. 

Ping An’s performance was dragged down by impairments on its investment in China Fortune Land Development Co. and slumping new business value at its life insurance arm, the main revenue contributor. Now it faces fresh challenges as pressures on the economy mount.

A surge in Covid cases may delay an anticipated recovery in new business, according to Bloomberg Intelligence analyst Steven Lam. Ping An’s tech unit valuation may still be subject to swings in investor sentiment until more concrete steps are taken by Chinese authorities to support tech firms, he said. 

“Overall the results are in line with expectations,” Lam said. “Life new business value may not resume growth this year, as agency transformation is still ongoing and a spike in Covid could drag down sales.”

Operating profit, which Ping An says better reflects performance because it strips out short-term volatility and one-time items, rose 6.1% to 148 billion yuan. That beat the 146 billion yuan consensus analyst estimate compiled by Ping An, according to Chief Capital Markets Officer James Garner.

Value of new business, which gauges the future profitability of new life policies, fell 24%, narrowing from a 35% slump in the previous year. 

‘Encouraging Signs’

The company has seen “encouraging signs” that efforts to improve its life insurance operation will have “material positive impact” on new business value, Garner said in a phone interview. The key indicator rose 10% in pilot outlets last year, and the company will expand the trials this year, he said, adding that productivity per agent also increased.

While the pandemic has had a negative impact on life insurance, it can also spur demand for short-term health policies and lower payouts from auto insurance as the use of cars drops, he said. 

Investment income fell 27% to 78 billion yuan, while impairment losses on financial assets rose 17% to 90.5 billion yuan, according to the statement. 

The company made 43.2 billion yuan in adjustments related to China Fortune Land, including impairments, wiping 24.3 billion yuan from full-year profit, it said. 

The impairments have been “very prudent,” and the developer’s restructuring plan requires no more money from Ping An, according to Garner. 

Ping An shares jumped 10.5% in Hong Kong on Thursday amid a broad rally, trimming this year’s loss to 1.5%.

(Updates with operating profit consensus in sixth paragraph, and company comments throughout)

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