Approaching the 30th anniversary: New China Insurance achieves its best-ever performance in history, leading the industry in Q4 profits

On March 27, 2026, the life insurance giant Xinhua Insurance presented a performance report that can be described as “historically the best.” In a complex environment where interest rates continue to decline and the industry is undergoing transformation, this established insurer, celebrating its 30th anniversary, demonstrated its resilience and quality of reform and transformation with several core indicators setting historical highs.

The annual report shows that in 2025, Xinhua Insurance achieved a net profit attributable to shareholders of 36.284 billion yuan, a year-on-year increase of 38.3%; original insurance premium income reached 195.871 billion yuan, a year-on-year increase of 14.9%; new business value exceeded 9.8 billion yuan, a year-on-year increase of 57.4%; and the total investment return rate reached 6.6%, an increase of 0.8 percentage points year-on-year. Achieving outstanding results on the high basis of 2024, the weight of this performance report is self-evident.

The dividend insurance plays a pivotal role in the transformation.

From a business structure perspective, Xinhua Insurance’s first-year premium for long-term insurance in 2025 was approximately 57.8 billion yuan, a year-on-year increase of 48.9%, of which the first-year regular premium for long-term insurance was 37.2 billion yuan, a year-on-year increase of 36.7%, and the proportion of regular business in first-year premiums increased to 64.4%. Renewal premiums were approximately 134.2 billion yuan, serving as a “ballast” that synergizes with first-phase business, driving stable growth in overall premiums.

Source: 2025 Annual Report

On the distribution channel side, the dual-drive pattern of individual insurance and bank insurance has been further consolidated. The individual insurance channel achieved premium income of 120.6 billion yuan, with the agent workforce stable at over 130,000 people, and the average monthly comprehensive productivity per person increased by 43% year-on-year. The bank insurance channel, while strictly implementing the regulatory requirement of “reporting and operation in unison,” achieved premium income of 72.1 billion yuan, a year-on-year increase of 39.5%, and the new business value grew by 110.2% year-on-year, reaching a historical high.

Source: 2025 Annual Report

Notably, new business value (NBV), a core indicator measuring the future profitability of life insurance companies, reached 9.842 billion yuan in 2025, a year-on-year increase of 57.4%. While first-year premiums grew rapidly, the new business value rate also increased by 1.5 percentage points to 16.2%. This indicates that Xinhua Insurance’s scale expansion is not merely “swapping price for volume,” but has truly achieved a simultaneous rise in both quantity and price.

The core challenge faced by the insurance industry in 2025 is the rigid constraint of liability costs during the period of declining interest rates. The interest spread risk of traditional increasing amount whole life insurance hangs like the Sword of Damocles over every life insurance company. Xinhua Insurance’s breakthrough strategy is clearly presented in the annual report: first-year premiums for dividend insurance reached 11.933 billion yuan, a nearly 12-fold year-on-year increase, achieving phased results in transformation, with the proportion of dividend insurance in overall regular business climbing quarterly, reaching 77% in the fourth quarter.

Source: 2025 Annual Report

Behind this data is a profound re-pricing of liabilities. In the context of declining interest rates and the narrowing space for traditional fixed-income products, dividend insurance essentially redistributes some of the uncertainty of returns back to customers, freeing up liability cost space for insurers while retaining attractiveness in sales. Those who can successfully develop dividend insurance will have a greater ability to stabilize scale and control costs in the new round of liability competition; this is no longer just a matter of product choice, but a watershed of operational capability.

Equity allocation drives high growth in performance.

If the reconstruction on the liability side seeks inward exploration, then the performance on the asset side tests the allocation ability of insurance capital in a complex market environment.

In 2025, Xinhua Insurance’s investment portfolio achieved a total investment return rate of 6.6%, an increase of 0.8 percentage points year-on-year, with total investment income for the year around 104.3 billion yuan, a year-on-year increase of 30.9%. This continued significant growth is based on the high growth from the same period in 2024.

Source: 2025 Annual Report

Dissecting the investment portfolio reveals that the increase in equity assets is the key driver of the yield improvement. By the end of 2025, Xinhua Insurance’s investment asset scale exceeded 1.84 trillion yuan, a 13% increase from the end of the previous year. Among this, the year-on-year increase in stock assets and fund assets reached 19.70% and 36.6%, with increments of 35.657 billion yuan and 46.25 billion yuan, respectively.

Source: 2025 Annual Report

This allocation rhythm indicates that Xinhua Insurance significantly increased its allocation to equity assets in 2025, with incremental funds continuously concentrated in stocks and public funds. Regarding allocation strategy, the annual report reveals: on fixed income, actively seize phase-specific allocation opportunities, moderately extend asset duration, and narrow the duration gap between assets and liabilities; on equity investments, adhere to rational investment, value investment, and long-term investment concepts, and actively lay out equity base asset allocation.

Additionally, the Honghu Fund, jointly established with China Life, delivered its first complete annual report in 2025. The annual report disclosed that the assets of Honghu Zhiyuan (the first phase of the Honghu Fund) increased to 58.906 billion yuan by the end of 2025, with an annual investment return rate of about 8.96%. By the end of 2025, the fund’s stock position was nearly 97%, operating almost fully invested.

This means that as the “vanguard” of insurance capital entering the market, the Honghu Fund has moved from an initial exploratory layout to substantial heavy investment. In the stable and improving equity market of 2025, this strategy yielded considerable returns. However, a 97% position also means that the volatility of the portfolio’s net value has significantly amplified, placing higher demands on the manager’s stock selection ability and market judgment.

Notably, there are significant differences in the profit performance of leading insurance companies in the fourth quarter of 2025. The annual reports of the five major listed insurance companies in A-shares reveal that China Life recorded a net loss of 13.726 billion yuan in a single quarter, and China Pacific Insurance also reported a slight loss of 176 million yuan; meanwhile, China Taiping and Ping An achieved net profits of 7.805 billion yuan and 1.922 billion yuan in a single quarter, showing positive year-on-year growth.

Xinhua Insurance became the biggest “surprise” in the fourth quarter. Despite previous market concerns about its quarterly loss, final data showed that the company achieved a net profit attributable to shareholders of approximately 3.427 billion yuan in the fourth quarter, standing out among its main competitors.

This is partly due to the profit statement “magnifying glass” effect caused by differences in asset classification under the new accounting standards. Under the new standards, equity assets can be classified as FVTPL (fair value changes recorded in profit and loss) and FVOCI (recorded in other comprehensive income). The former directly erodes current profits due to stock price fluctuations, while the latter does not affect the profit statement, only impacting net assets.

In fact, from the old standards’ disclosure of quarterly investment return rates and comprehensive investment return rates, Xinhua Insurance’s fourth-quarter figures were 0.86% and -0.21%, lower than China Life’s 1.36% and 0.26%. While investment performance does not compare favorably with peers, the net profit in a single quarter far exceeds that of competitors; the classification of equity assets under the new standards is becoming a key to the performance differentiation among insurance companies.

Three dimensions of scrutiny behind the high growth halo.

Xinhua Insurance’s high growth in 2025 has several dimensions worth scrutinizing.

First is the dividend issue. In 2025, Xinhua Insurance proposed to distribute cash dividends of 8.516 billion yuan (including a mid-term dividend of 2.09 billion yuan), a year-on-year increase of 7.9%, seemingly fulfilling its dividend commitment. However, in comparison to the 36.3 billion yuan net profit attributable to shareholders, the payout ratio is only 23.5%, significantly lower than the previously expected “30% profit dividend.” This discrepancy is due to increased profit volatility under the new accounting standards. However, in horizontal comparison, this level of dividend payout remains relatively high among major listed insurance companies.

Second is the volatility issue on the investment side. A total investment return rate of 6.6% is indeed impressive, but the net investment return rate is only 2.8%, a year-on-year decrease of 0.4 percentage points, reaching a new low in recent years. This implies that the growth in investment returns is more reliant on the valuation changes of equity assets and trading price differences, while stable interest and dividend income have actually declined. In a favorable equity market, this structure can amplify returns; however, if the market turns, the volatility will also be amplified.

Concerns regarding governance are similarly noteworthy. According to the concurrently disclosed solvency report, following the investigation of a provincial branch manager for suspected job-related crimes in the third quarter of 2025, in the fourth quarter of 2025, another provincial branch manager and a former provincial branch manager were investigated by the same local supervisory authority for suspected job-related crimes, both of which were cases discovered and reported by the company itself.

Source: Solvency Report

The occurrence of job-related crime cases at the provincial branch level for two consecutive quarters, combined with the former chairman Li Quan being sentenced to death with a two-year reprieve for corruption exceeding 200 million yuan, clearly indicates that this established life insurance company still has unfinished governance issues. However, from another perspective, it also shows that the internal supervision mechanism is functioning: discovering and exposing problems is itself the starting point for rectification.

Overall, Xinhua Insurance’s 2025 report is not without flaws, but the performance background is solid and reliable.

Looking ahead to 2026, this marks the beginning of the “14th Five-Year Plan” and the 30th anniversary of Xinhua Insurance. In the annual report’s address, Chairman Yang Yucheng described this performance report as “the brightest report since the company’s establishment.”

However, looking back and forward at this 30-year milestone, the era’s challenges facing Xinhua Insurance remain clear: in the macro context of an aging population, long-term declining interest rates, and increasing volatility in capital markets, how to further optimize the liability structure after completing the transformation of dividend insurance? How to balance returns and risks in equity asset allocation to avoid drastic fluctuations in performance?

The answer provided by Xinhua Insurance in the annual report is: “Adhere to the overall tone of seeking progress while maintaining stability and enhancing quality and efficiency, and walk the path of connotative, high-quality development with ‘three persistences’.” Specifically, first, adhere to a customer-centered approach to build a financial industry ecosystem; second, adhere to value as the core and promote synergy among the three ends; third, adhere to the coordinated development and safety to enhance risk management capabilities.

Standing at the threshold of its 30th anniversary, Xinhua Insurance’s report provides a promising starting point.