Hit by the global financial market meltdown, China Life Insurance, the biggest on the mainland, said third-quarter profit slumped 70 per cent while smaller rival Ping An Insurance (Group) dived into its first loss since listing its shares in 2004. Ping An said it lost 7.8 billion yuan (HK$8.87 billion) in the third quarter, compared with a 3.62 billion yuan profit a year ago, based on mainland accounting standards. Its loss was 7.88 billion yuan under international accounting rules, against a 5.28 billion yuan profit a year ago. 'The impact of the global financial crisis stemming from the US subprime issue is expected to continue and the situation in the capital market gives no ground for optimism,' the Shenzhen-based insurer said. The insurer warned early this month of a 15.7 billion yuan impairment loss for the eroded value of its 4.99 per cent stake in Fortis, the troubled Belgian financial group. Overall, the insurer booked an investment loss of 12.38 billion yuan in the quarter, against a profit of 17.12 billion yuan a year earlier. 'We have increased the proportion of investment in fixed-income assets,' the insurer in a statement to the Hong Kong Stock Exchange. 'However, due to the impact of the deep correction of the international and domestic capital markets, our total investment income decreased significantly.' Analysts expect Ping An to sell its remaining securities still carrying unrealised gains to avoid a full-year loss because under mainland rules, a loss would prevent the company from issuing new shares to raise fund over the next three years. China Life Insurance, meanwhile, said its third-quarter profit was 2.35 billion yuan under mainland accounting standards, down 70 per cent from 7.85 billion yuan a year earlier. Its investment income fell 43.51 per cent to 11.12 billion yuan but premium income jumped 81.49 per cent to 65.69 billion yuan. It did not provide figures under international accounting rules. CLSA estimates China Life's full-year profit will fall 56 per cent while Ping An's will plunge 79 per cent. 'China Life is free from problems and stands to benefit from any lapse at its competitors,' a CLSA report said. 'Its strongest competitor, Ping An, is facing bad publicity for its failed Fortis investment and some mid-sized life insurers are facing solvency issues. We expect China Life to pick up market share from these players.'