 Lacklustre NBV outlook due to ongoing agent restructuring and product mix developments, impacting volumes and margins  Life persistency and surrenders also deteriorated; P&C COR under pressure but base effects could improve from 4Q21  Buy-rated Ping An H/A our preferred plays Life NBV recovery remains elusive: There are limited signs of a strong rebound in life NBV growth as new business volumes are adversely impacted by agent restructuring and new business margins are negatively affected by product mix; meanwhile persistency and surrender ratios also deteriorated. There is also greater emphasis on developing pension products as well as health and old-age services.

Our forecasts imply 5-20% NBV decline over 2021/2020 due to more stable development over 2H21/2H20 (+2% to -16%) vs 1H21/1H20 (-9% to -25%).

P&C trends may be more encouraging: Motor P&C growth could recover in 4Q21 given base effects, the motor COR should stabilise (after rising but rebalancing between loss and expense ratios), while growth in non-motor lines should continue.

Commentary during 1H21 results suggests Henan flood losses are manageable.

Ping An H/A our preferred plays: Ping An’s disappointing stock performance is mainly due to falling NBV expectations, asset risk concerns and the evolving mainland China regulatory environment. We think its weak NBV outlook is mainly a supply-side issue so should improve sooner than peers, since it started its agency reform earlier, while life persistency has held up better than peers and its life ‘product + services’ strategy provides a competitive advantage. Moreover, key business lines still deliver attractive ROEs and customer growth; while C-ROSS risks seem overplayed. We adjust TPs and estimates for 1H21 results and market movements. There are no rating changes.