Ping An Insurance (Group) Co., China’s second largest insurer by market value, said profit fell 5.6% for the first nine months hurt by market volatility and rising costs.

Net income slid to 87.6 billion yuan ($12 billion) for the nine months ended Sept. 30, from 92.8 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Friday. That compares with a 1.2% decline in the first half.

Operating profit, which the insurer says better reflects performance by stripping out short-term investment volatility and one-time items, fell 9.8% for the first nine months. That quickened from a 5% decline in the first half.

China’s stock-market rout this year and low interest rates have eroded insurers’ investment returns. Ping An is trying to turnaround operations, reviving growth in new business value following three years of reform to trim less productive life agents. The listed banking arm also reported a 2% profit drop for the quarter as interest margins narrowed amid the economic slowdown.

The comprehensive investment yield was 3.7% for the first three quarters, narrowing from 4.1% in the first half.

The benchmark CSI 300 Index slid 4.7% in the first nine months, as a deepening property crisis weighed on the economy’s recovery. That poses a bigger challenge to insurers as they started adopting accounting rules that bring bigger impact on net income from market-price movements.

Insurance service expenses climbed by 5% to 327.8 billion yuan, while net insurance finance costs rose 31% to 98.4 billion yuan, according to the statement.

New business value, which gauges the profitability of new life policies sold, rose 40.9% on a like-for-like basis in the three quarters, slowing from 45% in the first half.

Higher agent productivity has helped reverse declines in the key gauge for Ping An’s backbone business, with then Co-Chief Executive Officer Jessica Tan expecting the rebound to continue for the rest of the year in an August interview. Her resignation last month is unlikely to derail efforts to improve the life business, according to Bloomberg Intelligence analyst Steven Lam.

Competitor China Life Insurance Co. reported a 36% decline in profit for the first nine months Thursday as investment income slumped.

Ping An shares rose 0.5% to HK$40.6 in Hong Kong trading before the statement. The stock has lost 21% this year.

(Updates with more details from fifth paragraph)