Mainland insurers saw a drop in their investments' market value last month when the A-share market slumped 18 per cent after advancing 130 per cent over the first 10 months. Despite the reduction, insurers' investments still totalled 1.83 trillion yuan as of the end of November, the China Insurance Regulatory Commission said. The figure represents a 60.14 per cent jump from a year earlier, but was down 3.37 per cent from the level of 1.89 trillion yuan in the first 10 months. Last month's setback was attributable directly to the domestic market correction. 'Those investments are usually market-to-market and booked with reference to the closing price of a certain day near the end of the month,' said China Galaxy Securities analyst Zhang Xi. The Shanghai Composite Index fell 18.19 per cent in November, the biggest monthly drop in 13 years. The domestic market downturn has raised the insurance watchdog's concern that insurers are investing recklessly. 'In the last two years, insurance companies have made huge gains from investment portfolios, thanks to [the mainland's] booming markets,' said CIRC vice-chairman Li Kemu. 'Their portfolios have become the main source of their earnings, making it quite difficult for them to generate profit from underwriting.' He reminded insurance companies that they are not fund managers and should focus on their core business. Despite the risk of a further market sell-off, some argue that the lucrative paper gains reaped from listing subscriptions will continue to support investment income. 'Both China Life and Ping An are sitting on substantial, unrealised equity portfolio gains, which is equivalent to about 40 per cent of our 2008 profit forecast,' UBS analyst Sally Ng said in a research report earlier this month. 'This should provide a substantial cushion to A-share market weakness.' Meanwhile, insurers underwrote 644.3 billion yuan worth of premiums in the first 11 months, up 24.4 per cent from a year earlier. The increase was driven by property and casualty policies that surged 33.3 per cent to 183.8 billion yuan. Life insurance premiums rose 21.2 per cent to 460.5 billion yuan.