Kinerja Meningkat Signifikan dan Kerugian Kuartalan yang Bersamaan, Dari Mana Asal Perbedaan Suhu dalam Laporan Tahunan Industri Asuransi

Reporter: Xiang Jaying

2025年 industry annual report season has wrapped up, and one after another impressive set of results outlines an overall positive development trend for the industry: among A-share listed insurers, attributable net profits all surged. China Life, China Ping An, China Taiping, PICC, and New China Insurance saw year-on-year growth of 44.1%, 6.5%, 19.0%, 8.8%, and 38.3% respectively. In a market environment where the long-term interest-rate mid-point continues to move downward, they delivered an outstanding answer.

However, behind the industry’s overall rosy performance, the profit trajectory in last year’s fourth quarter varied across companies. Facing the same round of market turbulence and adjustment, some insurers saw pressure on single-quarter profits, while others achieved positive growth. This also reveals the deeper “password” behind differences in insurers’ equity investment strategies.

The new rules magnify differences in investment strategy

In the fourth quarter of 2025, A-shares and Hong Kong stocks ended the period amid volatility. According to Wind data, the CSI 300 Index fell 0.23%, the ChiNext Index dropped 1.08%, and the Hang Seng Index fell as much as 4.56%. Structural adjustments in the capital market—like an unexpected major test—put each insurer’s investment resilience and strategic resolve to the test.

China Life was the first to release its 2025 financial report. It shows that the company’s full-year net profit increased 44.1% year-on-year to RMB 1540.78 billion. However, due to intensified volatility in the fourth-quarter equity and bond markets, fair value changes in profit and loss were significantly narrowed, resulting in a single-quarter loss. At the results briefing, Li Mingguang, President of China Life, explained that this “was mainly because the capital market underwent structural adjustments in the fourth quarter, leading to a pullback in some of the company’s held stocks and funds.” He also emphasized that such volatility “reflects changes in the capital market and does not represent the company’s long-term operating trend.”

In the annual reports subsequently released by China Taiping and China Ping An, both companies recorded positive year-on-year growth in fourth-quarter single-quarter net profit, reaching RMB 78.1 billion and RMB 19 billion respectively. A senior insurance-industry research analyst told the reporter: “Each company’s equity asset allocation ratio and investment strategy are not the same, and their sensitivity to structural adjustments in the market therefore naturally differs. As a result, under the same market environment, you see diversification in the positive or negative net profit, as well as differences in the magnitude of declines.”

Tian Lihui, a professor at the School of Finance of Nankai University, offered a vivid analogy to the reporter: “The new insurance contract accounting standards are like a ‘magnifying glass,’ clearly showing equity risk exposure of insurers and differences in strategy in the income statement.”

Specifically, China Life has a larger equity exposure and more of it is classified as FVTPL (fair value through profit or loss, i.e., measured at fair value with changes recognized in current profit and loss). The market adjustment in the fourth quarter caused fair value losses to directly erode profits. By contrast, China Ping An and China Taiping designated a significant portion of high-dividend assets as FVOCI (fair value through other comprehensive income, i.e., measured at fair value with changes recognized in other comprehensive income), whose fair value fluctuations do not affect current profit, thereby effectively isolating market shocks.

At the results briefing, Fu Xin, Deputy General Manager and Chief Financial Officer of China Ping An, disclosed detailed data: 57% of Ping An’s stock classifications are FVOCI, with a scale of RMB 541.3 billion. These contributed more than RMB 90 billion of pre-tax unrealized gains, directly thickening net assets rather than being recorded in profit. She vividly called these OCI stocks with high dividends and low volatility the company’s “ballast stone”: “First, because their returns are very stable; second, they contribute a long-term and sustainable value that can be released; third, in the low-interest-rate era, they can bring very solid returns and effectiveness.”

Equity investment becomes the deciding factor

Although quarterly profit performance was diversified, looking across the whole of 2025, leading listed insurers all delivered impressive investment performance reports. With insurance giants holding roughly RMB 16 trillion in investment assets, amid a market environment of downward pressure on the long-term interest-rate mid-point, they all, more or less, chose to proactively increase equity allocation in order to offset the pressure of falling returns from fixed-income investments.

Data show that as of the end of 2025, China Life’s publicly traded market equity investment scale exceeded RMB 1.2 trillion, an increase of more than RMB 450 billion from the beginning of the year. The allocation ratio for stocks and funds rose from 12.18% to 16.89%. China Ping An strengthened a balanced layout between dividend-value equities and science-and-technology growth equities. China PICC’s net purchases of A-share equities exceeded RMB 40 billion, and the equity share in the secondary market increased by 4.3 percentage points.

This strategic adjustment is reflected directly in investment yield. China Life achieved what is among the best investment performances in recent years, with a total investment yield of 6.09%. New China Insurance’s total investment yield rose by 0.8 percentage points year-on-year to 6.6%. China Ping An’s insurance fund investment portfolio achieved a comprehensive investment yield of 6.3%. China PICC and China Taiping’s total investment yields were both 5.7%.

At the results briefing, Liu Hui, Vice President of China Life, summarized its investment strategy as “equity investment is the deciding factor for improving returns; fixed-income investment is the ballast stone for stabilizing returns; alternative investment is the growth engine for enriching returns.” She introduced that in 2025 the company strategically increased its equity proportion by 5 percentage points, with a focus on new quality productive forces and high-dividend-quality assets. At the same time, in the fixed-income space, it had already accumulated RMB 3 trillion of long-term high-quality assets, and continued to strengthen its base holdings in a low-interest-rate environment.

Cai Zhiwei, Vice President of PICC, shared the company’s investment insights: “In 2025, the investment scale of the group’s OCI stocks increased by 158% compared with the beginning of 2025. The share within investment assets rose by two percentage points, and the average dividend yield of the held OCI stocks reached 4.27%.” He specifically mentioned the strategic stock investment portfolio that PICC established innovatively: “The group’s full-year net asset value growth rate exceeded 40%, which also lays a solid foundation for us to obtain long-term stable investment returns while crossing the cycle.”

Asset-liability matching in 2026 becomes the main line

At the start point of 2026, the challenges faced by insurance funds remain severe. The low-interest-rate environment continues, and high-quality fixed-income assets are scarce. Asset-liability matching has become a common challenge faced by insurers. How to continue to tap the potential of equity investment while controlling risk has become an important issue placed before investment managers.

At the results briefings, management teams of many insurers said that strengthening asset-liability management is not only a regulatory requirement, but also a need for the company to forge cross-cycle and long-cycle operating and management capabilities. In the face of the low-interest-rate environment, it has become industry consensus to coordinate scientific management of liability duration and flexible regulation of asset duration.

Looking ahead to equity investment allocation in 2026, Cai Zhiwei disclosed PICC’s investment thinking. On the one hand, it will continue to pay attention to the allocation of OCI high-dividend stocks. On the other hand, it will focus on growth-oriented investment opportunities embedded in the “Fifteenth Five-Year Plan,” strengthen research on key industries and key sectors, and reasonably plan the TPL stock allocation.

In the field of alternative investments, Cai Zhiwei said that in 2026 it will continue to increase efforts in developing and allocating innovative alternative products such as asset securitization. Using the funds already established by the group and the private equity funds to be established, it will focus on national key strategies and investment in insurance-related areas. “Our new PE fund is also under planning.”

China Life, meanwhile, will continue to leverage its advantages of long-term capital and patient capital, increase product innovation and strategy innovation, and build an alternative investment ecosystem across all product types and all life cycles. Liu Hui disclosed that the company’s overall alternative investment scale has already exceeded RMB 1 trillion, opening up space for long-term growth.

In response to challenges in the low-interest-rate environment, Cai Zhiwei shared PICC’s three-pronged 대응 strategies: First, strengthen active investment management of fixed-income assets, and capture high points in interest rates by increasing allocation to longer-duration bonds; second, increase the contribution of high-dividend stocks to net investment returns; third, promote the transformation of alternative investments, focusing on making debt more stable, making equity stronger, and making physical assets better, and proactively explore alternative asset investment opportunities with stable cash returns.

Many industry insiders believe that in 2026, insurers’ equity investments will show two major trends. First, the allocation ratio of FVOCI-type assets characterized by high dividends and low volatility will continue to rise, smoothing fluctuations in the income statement. Second, by aligning with national strategies and new quality productive forces, it will dig into structural opportunities with long-term growth potential. Under the main line of asset-liability matching, insurers’ investment strategies are shifting from simple scale expansion toward more refined structural optimization and risk management.

As Li Mingguang said, life insurance companies have operating characteristics across long periods and across cycles. It is suggested that the market “reduce excessive interpretation of quarterly profit.” For insurance funds, the real test is not how to respond to short-term volatility, but rather how to achieve dynamic balance of assets and liabilities and create value from a long-cycle perspective. The investment chessboard for 2026 has already been laid out; how insurance funds move their pieces is worth continued attention.

(Editor: Qian Xiaorui)

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