Up to 6.6%, as low as 4.04%: Inconsistent disclosure standards make it difficult to conceal the clear difference in the investment levels of insurance companies.

How do differences in the disclosure of investment return rates affect consumer choices?

In a low-interest-rate environment, the “investment quality” of life insurance products has been magnified like never before. From the annual reports of publicly listed insurance companies, floating income products have gradually become the mainstay, and the ultimate performance of these products essentially depends on the investment capabilities behind the insurance companies.

In the recently disclosed 2025 annual reports, listed insurance companies have presented their investment “report cards.” A reporter from Yicai calculated that among the seven large domestic listed insurance companies in the A-share and H-share markets, their investment performances vary significantly. The total investment return rate, which directly affects net profit levels, ranges from a high of 6.6% for New China Life Insurance to a low of 4.04% for China Pacific Insurance. However, behind the numbers of investment return rates, the reporter found various discrepancies in the disclosure metrics and the disclosure criteria hidden in the footnotes among the listed insurance companies, which can easily mislead investors and consumers during horizontal comparisons.

Divergence in Investment Returns

As the 2025 annual reports of listed insurance companies come to a close, their investment performances have also emerged.

The Yicai reporter found that the investment asset scale of the seven domestic listed direct insurance companies in the A+H market (excluding ZhongAn Insurance, which has a relatively small investment asset scale and is not included in this analysis) reached 22.9 trillion yuan as of the end of 2025, an increase of 12.8% year-on-year, accounting for 60% of the industry’s investment assets.

The disclosed metrics of investment returns are typically divided into three categories: net investment return rate, total investment return rate, and comprehensive investment return rate. The numerator for the net investment return rate usually includes interest income, rental income, dividend income, and other income metrics; the total investment return rate adds on top of the former the profits and losses from securities trading, fair value changes, impairments, and other items; the comprehensive investment return rate further includes changes in the fair value of financial assets measured at fair value, with such changes recorded in other comprehensive income.

From the investment performances of these seven listed insurance companies, in terms of the total investment return rate, six companies showed a year-on-year increase ranging from 0.1 to 0.8 percentage points; only China Pacific Insurance saw a year-on-year decrease of 0.53 percentage points. Among them, China Ping An did not disclose this metric in its annual report, but according to estimates by Dongwu Securities and Zhongtai Securities, China Ping An’s total investment return rate for 2025 is 4.6%, which is a year-on-year increase of 0.1 percentage points.

In terms of absolute values for total investment returns, the highest is New China Life Insurance at 6.6%, while China Life Insurance also exceeds 6%; both China Insurance and China Pacific Insurance are at 5.7%; Sunshine Insurance and China Pacific average between 4% and 5%, with China Pacific’s 4.04% being the lowest disclosed value. China Pacific explained that the decline in total investment return rate is mainly due to the influence of domestic interest rate trends, where the unrealized gains on FVPL (financial assets measured at fair value with changes recorded in current profits and losses) bonds were lower than the same period last year.

In terms of net investment return rate, New China Life is at 2.8%, while the other companies are all above 3%, with both China Ping An and Sunshine Insurance being the highest at 3.7%.

The disparities in comprehensive investment return rates among listed insurance companies are even more pronounced. China Ping An, China Pacific Insurance, and Sunshine Insurance all exceed 6%, New China Life is at 5%, while China Pacific is only at 1.73%.

Confusion in Disclosure Standards

The significant differences in comprehensive investment return rates among listed insurance companies are primarily due to discrepancies in disclosure standards.

According to the notes in the financial reports of listed insurance companies, China Ping An, China Pacific Insurance, and Sunshine Insurance excluded the fair value changes of bonds under the FVOCI (fair value changes recorded in other comprehensive income) item when calculating net, total, and comprehensive investment return rates, while New China Life and China Pacific included this amount in their comprehensive investment return rate calculations. If this amount were excluded, New China Life’s comprehensive investment return rate would rise to 6.9%, making it the highest among these listed companies; while China Pacific’s figure would become 4.29%, although it would still be at the bottom among listed companies, it is significantly different from 1.73%. However, these two companies did not specify in the notes whether this amount was included in the net and total investment return rates and the extent of its impact on the metrics.

In fact, the differences in the metrics and disclosures regarding investment return rates among the listed insurance companies are not limited to this instance; one could say they are “varied and diverse,” which has been criticized by professional investors in various forums.

In terms of metric disclosures, the China Securities Regulatory Commission’s “Rules for the Information Disclosure of Companies Issuing Securities No. 4—Special Regulations on Information Disclosure of Insurance Companies” stipulates that insurance companies must disclose the average investment return rate over three years in their periodic reports. However, it does not specify the exact calculation standards and other total, net, and comprehensive investment return rate metrics. From the 2025 annual reports, China Ping An did not disclose the total investment return rate; China Insurance did not disclose the comprehensive investment return rate; and China Life only disclosed the total investment return rate.

Regarding the calculation of the numerators and denominators for each investment return rate, the standards vary among companies. Besides the aforementioned fair value changes of FVOCI bonds, whether to include profits and losses from joint ventures and associates in the calculation of net investment returns also differs among the listed insurance companies.

Moreover, even within the same insurance company, related disclosures or standards may quietly change. For instance, China Life disclosed its net investment return rate in its 2024 annual report, but this metric disappeared from the 2025 report. According to estimates by Dongwu Securities, China Life’s net investment return rate for 2025 is at 3.0%, a year-on-year decrease of 0.4 percentage points; China Insurance’s total investment return rate for 2025 appears to have increased by 0.1 percentage points year-on-year, but the company disclosed in a footnote that the criteria for this metric changed in 2025, and the restated 2024 metric was increased by 0.2 percentage points. This means that under comparable standards, the total investment return rate for the company actually decreased by 0.1 percentage points in 2025.

A seasoned industry insider told the reporter that since these investment return rate-related metrics and standards are not legally required disclosures, it is understandable that each company discloses them based on its own considerations. However, the lack of uniformity in standards and disclosures leads to the non-comparability of similar metrics among different insurance companies, creating obstacles for investors and consumers’ understanding. Especially at the sales end, agents may find it difficult to clearly understand or explain the differences in standards, which may result in exaggerated returns or a distorted decision-making process for clients, triggering a crisis of trust.

Industry insiders also noted that, compared to annual reports, the “Regulatory Rules on the Solvency of Insurance Companies No. 18: Solvency Report” sets a unified formula for calculating investment return rates in insurance companies’ solvency reports. Although most still adopt the old standards, the criteria are relatively more consistent.

The reporter examined the investment return rate metrics reported in the solvency reports for the fourth quarter of 2025 from these seven listed life insurance companies (which account for a large portion of insurance capital), and except for Ping An Life, which has not yet disclosed the quarterly report, Sunshine Life, which applies the new standards, and New China Life, which did not specify the applicable standards, among the other four, China Life has the highest investment return rate at 5.2%, followed by China Insurance at 4.41%, while Taiping Life and Pacific Life are at 3.76% and 3.74%, respectively; in terms of the three-year average investment return rate metric, Taiping Life’s 2.62% is the lowest among the aforementioned four companies, while China Insurance’s 4.11% is the highest.

Asset Management Competition and Compliance Alerts

“For life insurance business, every promotion of savings-type products at the front end is inherently supported by investment returns,” a seasoned insurance agent told Yicai reporters. Life insurance products, as a combination of long-term savings and protection, should not solely rely on returns for product selection, but their performance will also directly influence customers’ purchasing intentions. This is particularly true for the floating income products such as participating insurance that major companies are currently promoting, where the correlation between investment returns and product sales is also rising. Companies with weak investment capabilities not only struggle to offer competitive product returns but also find themselves at a disadvantage when facing clients, making product sales significantly more challenging.

Currently, large insurance companies generally entrust most of their investment assets to their in-house asset management companies for unified operations. In the face of industry competition and market demands, each insurance company is accelerating its layout in asset management business, strengthening the investment capabilities and risk control levels of their asset management companies.

In terms of investment research capabilities, for example, China Pacific Insurance stated in its 2025 annual report that the company strictly adheres to a disciplined yet flexible tactical asset allocation, continuously advancing the integration of investment research resources and the construction of investment research platforms, and enhancing market dynamics tracking and analysis through the tactical asset allocation system to empower investment decisions.

At the same time, various insurance asset management companies have been intensifying their team building efforts in recent years: on the foreign capital side, companies like AIA have actively established their own asset management companies; on the domestic side, for example, Ping An Asset Management recently announced that the well-regarded Zhang Jianying has been appointed as general manager, filling a key position that had been vacant for nearly 11 months; Taiping Asset Management is uniquely chaired by the chairman of China Taiping Group, Yin Zhaojun, which is quite rare among leading companies, but performance does not seem to meet expectations.

Industry insiders also stated that these significant capacity-building efforts should be based on compliance.

According to media reports citing corporate warning data, in 2025, insurance asset management institutions received a total of 130 regulatory fines. For example, Zhongjian Asset Management and related responsible personnel were fined 3 million yuan for not using insurance company funds in accordance with regulations; Minsheng Tonghui Asset Management and related responsible personnel were fined over 3.9 million yuan for not using insurance company funds in accordance with regulations; and both Bank of Communications Insurance Asset Management and Taiping Asset Management were fined over 1 million yuan for investment non-compliance issues.

Among them, Taiping Asset Management received two fines from the Financial Regulatory Administration in July and October last year, with one fine amounting to 6.78 million yuan, and over ten responsible personnel were penalized. The magnitude of the fines and the number of individuals penalized is also rare among leading asset management firms.

Public information shows that in July last year, Taiping Asset Management was fined 6.78 million yuan due to issues such as senior executives performing duties without approval of qualifications, incomplete submission of related party information files, and investing insurance funds in non-trust products managed by the entrusted party; 11 responsible personnel, including Cao Qi, Li Hong, Xu Gang, Lin Jianfeng, Chen Mo, Wang Xiangyang, Deng Xianhu, Li Guanying, Xu Weiwen, Qi Ning, and Li Guangyao, received warnings and were collectively fined 760,000 yuan; in October of the same year, Taiping Asset Management was fined again 700,000 yuan for not using insurance company funds in accordance with regulations, and Shi Hong was also banned from entering the insurance industry for five years.

(This article is from Yicai)