Profit growth of 22.4%! Behind the steady performance of the five major listed insurance companies in A-shares, how to navigate through the low-interest-rate cycle

How Can Insurance Companies Innovate Investment Strategies in a Low-Interest Rate Environment?

Currently, the five major listed insurance companies in A-shares have fully disclosed their performance for 2025. On March 29, according to statistics from the Beijing Business Daily, the five A-share listed insurance companies, including Ping An Insurance, China Life, PICC, China Pacific Insurance, and Xinhua Insurance, achieved a total net profit attributable to shareholders of 425.291 billion yuan in 2025, a year-on-year increase of 22.4%.

The significant increase in net profit is largely due to contributions from the investment side. Benefiting from the stock market performance in 2025, the investment returns of listed insurance companies generally performed well, with several companies indicating in their annual reports that they increased investments in high-dividend assets. From the underwriting perspective, thanks to marginal improvements in claims and expense control, the business costs of the “old three” property and casualty insurance companies have all been optimized; at the same time, in the context of low interest rates and a sluggish competitive wealth management environment, the value of new business in life insurance has shown noticeable growth. Whether the business costs of property and casualty insurance can continue to remain low in the future, and whether life insurance can maintain its glory, all need to be tested by time.

Investment Drives Net Profit Growth

In 2025, all five listed insurance companies achieved impressive performance growth, with the net profit attributable to shareholders of the parent company showing a year-on-year increase, totaling 425.291 billion yuan, an increase of 22.4%.

As the first insurance company to disclose its results in A-shares, China Life achieved a net profit attributable to shareholders of the parent company of 154.078 billion yuan, continuing to grow steadily by 44.09% on a high base. Ping An Insurance’s profit scale closely followed, achieving a net profit of 134.778 billion yuan in 2025, a year-on-year increase of 6.5%. Additionally, China Pacific Insurance, PICC, and Xinhua Insurance achieved net profits of 53.505 billion yuan, 46.646 billion yuan, and 36.284 billion yuan, with growth rates of 19%, 8.8%, and 38.3%, respectively.

A detailed analysis of this impressive report reveals that the performance of the investment side has become the core engine driving the substantial growth in net profit. The recovery of the capital market in 2025 provided a rare profit window for insurance capital, and many insurance companies accurately grasped market trends, achieving leapfrog growth in investment returns. For instance, China Life achieved its best investment performance in recent years, with total investment income reaching 387.694 billion yuan, a year-on-year increase of 25.8%, and a total investment return rate of 6.09%. Xinhua Insurance’s total investment income for the whole year reached 104.334 billion yuan, with a growth rate of 30.9%. PICC achieved total investment income of 92.323 billion yuan, setting a historical high.

However, behind the growth in investments lies hidden concerns about how to balance the returns brought by short-term market fluctuations with long-term stable growth. How to cope with the low-interest-rate environment has become an important topic that major insurance companies must face. Fu Yifu, a special researcher at Suzhou Bank, predicts that the stock market is expected to present a structural market in 2026, with sectors benefiting from policy support and economic transformation likely to perform well, but attention must be paid to bond market interest rate trends and credit risk differentiation.

How will listed insurance companies respond to the low-interest-rate environment in the future? Guo Xiaotao, co-CEO of Ping An, stated at the company’s performance meeting that their investment strategy is to seek certainty amid uncertainty. New productive forces are a certainty factor, robust infrastructure development is a certainty factor, the overall development of the national economy is a certainty factor, high dividends and a strong financial nation are certainty factors, and a healthy China is a certainty factor. These are all important directions for long-term investment asset allocation.

Regarding specific allocation tactics, Liu Hui, Vice President and Secretary of the Board of China Life, stated that in a low-interest-rate environment, they will further strengthen strategic allocation and active management, continuously optimize asset-liability matching, and solidify the fixed-income base. In addition, they will fully leverage the advantages of long-term capital and patient capital, increase product innovation and strategic innovation, and build an alternative investment ecosystem covering all varieties and lifecycles, with the overall scale of alternative investments exceeding one trillion yuan, opening up long-term growth space.

Strong Growth in the Value of New Life Insurance Business

As a “barometer” for measuring the future profitability and business quality of insurance companies, the value of new business has always been a focus of market attention. In 2025, the value of new life insurance business for the five A-share listed insurance companies achieved double-digit positive growth.

In terms of scale, China Life similarly leads, with its annual new business value reaching 45.752 billion yuan in 2025, a substantial year-on-year increase of 35.7%. Following closely is Ping An, with a new business value of 36.897 billion yuan in life and health insurance, which also achieved a growth rate of 29.3%.

From the perspective of growth momentum, each company performed equally well. China Pacific Insurance’s new business value in life insurance reached 18.609 billion yuan, a year-on-year increase of 40.1%. Xinhua Insurance achieved a new business value of 9.842 billion yuan, with a growth rate as high as 57.4%. PICC’s life insurance achieved a new business value of 8.229 billion yuan last year, with a comparable year-on-year growth rate of 64.5%, ranking first among the five companies.

The impressive performance is backed by strong empowerment from the individual insurance and bank insurance channels. According to the Beijing Business Daily, major companies are pushing for “optimizing personnel and improving quality” in the individual insurance channel, moving towards elite and professional development; the bank insurance channel is gradually entering a “value bank insurance” new stage under the guidance of the “reporting and behavior integration” policy. Fu Yifu further analyzes that the growth in the value of new life insurance business for listed insurance companies in 2025 is mainly attributed to two factors: first, the continuous release of insurance demand, with residents’ awareness of health and pension protection increasing; second, insurance companies actively promoting channel transformation, improving the quality of individual insurance teams, and contributing growth from diverse channels such as bank insurance.

As an industry leader, Li Mingguang, President of China Life, detailed the company’s “winning formula” at the performance release meeting. He stated that among the various sales channels, the individual insurance channel plays a vital role as the primary channel and has a solid sustainable development capability. At the same time, the individual insurance channel is steadily advancing marketing system reforms, insisting on quality improvement while stabilizing volume, strengthening superior growth and nurturing, optimizing team structure, continuously enhancing team hard power, and accelerating the team’s transformation towards professionalism, specialization, and youthfulness. The quality of the team is continuously improving, with new forces growing continuously, a year-on-year increase of 40% in superior growth personnel, a year-on-year increase of 2.2 percentage points in the 13-month retention rate, and a year-on-year increase of 2.3 percentage points in the proportion of personnel aged 45 and below. The bank insurance channel insists on comprehensive channel layout, expanding and improving the quality of network operations, and achieving double-digit growth in new single issuance network points and star-level network points.

Ping An proposes another solution approach, emphasizing the power of “balance” to cope with market fluctuations. Guo Xiaotao mentioned that the company has life insurance agents, bank insurance channels, and community financial channels. Among them, the combat effectiveness of the agent team is becoming stronger, enabling more effective continuous performance development in market competition. The bank insurance channel can seize market growth opportunities, and the company is also vigorously training community financial channels. This balanced channel structure allows the company to effectively withstand the impact of market fluctuations on performance.

Property and Casualty Insurance Seeks Growth from New Energy Vehicle Insurance and Non-Vehicle Insurance

Unlike the rapid expansion of life insurance business, the property and casualty insurance market has entered a stable development track. The “old three” of PICC, Ping An Property & Casualty, and China Pacific Property & Casualty continue to optimize their business structure and reduce business costs.

Specifically, in 2025, the comprehensive cost ratios of the three major property and casualty insurance giants—PICC, Ping An Property & Casualty, and China Pacific Property & Casualty—were reduced to 97.6%, 96.8%, and 97.5%, respectively, improving by 0.9, 1.5, and 1.1 percentage points year-on-year. The optimization of cost control has directly translated into strong growth in underwriting profits. Industry insiders believe that the business cost optimization of the “old three” is attributable to each company’s refined cost management, strengthened channel cost control, and reduction of unnecessary expenditures, as well as benefiting from fewer major disasters, which lowered claims expenditures. According to data from the Ministry of Emergency Management, various natural disasters in China caused direct economic losses of 241.617 billion yuan in 2025, a year-on-year decrease of 39.8%.

Currently, the comprehensive cost ratios of the three property and casualty insurance companies are already at a relatively low level. What future cost reduction space exists?

Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, predicts that first, in new energy vehicle insurance, the current comprehensive cost ratio of the industry for new energy vehicle insurance is higher than that of fuel vehicles. In the future, as the marketization of self-pricing coefficients and the improvement of pure risk premium data occur, the cost ratio of new energy vehicle insurance is expected to improve further in 2026. Second, in non-vehicle insurance, property and casualty insurance companies can shift from traditional “loss compensation” to “risk prevention” through risk reduction services, using the Internet of Things and big data to lower the incidence of claims, while optimizing business structure, reducing high-claims businesses, and expanding stable businesses such as government insurance and agricultural insurance.

From the statements of executives from various insurance companies, it appears that the industry will also seek profit increments from new energy vehicle insurance, non-vehicle insurance, and other businesses. Zhang Daoming, the temporary head of PICC Property & Casualty, stated at the performance release meeting that after the integration of non-vehicle insurance with “reporting and behavior,” it is expected that the comprehensive governance effects of non-vehicle insurance will be reflected first in the comprehensive expense ratios of enterprise property insurance, employer’s liability insurance, and safety liability insurance in 2026, with the comprehensive expense ratios of the above-mentioned types expected to decrease by more than two percentage points year-on-year, and the comprehensive cost ratio of non-vehicle insurance is expected to decline, achieving underwriting profitability.

Chen Hui, General Manager of China Pacific Property & Casualty, mentioned that the new energy business for household vehicles has now entered a stable profit zone. China Pacific Property & Casualty will further optimize costs and enhance efficiency by constructing a full lifecycle ecosystem. The focus will be on two aspects: first, improving operational efficiency; and second, managing the claims process by concentrating brand damage assessments and providing manufacturers with related claims standards, including large battery repairs and flood-damaged vehicles.

Beijing Business Daily Reporter Li Xiumei