New China Life Insurance's "Investment Trader" Appears at Earnings Conference, Reveals Equity Investment Strategy

New China Life Insurance’s latest disclosed 2025 performance has hit a historic high.

During the reporting period, attributable net profit was RMB 36.284 billion, up 38.3% year on year; total premium income was RMB 195.871 billion, up 14.9% year on year; and investment returns surpassed RMB 100 billion for the first time.

On the afternoon of March 30, New China Life’s key executives appeared in Beijing to address investors’ concerns.

Among them, Chen Yijiang, president of New China Asset Management Co., Ltd., was on the list. He is one of the core operators of New China Life’s “investment foundation.” He provided a detailed response to how insurance capital should invest along its path in a low-interest-rate environment.

Zishi Hall will summarize the core takeaways from this earnings briefing for readers.

Investment Strategy in a Low-Interest-Rate Environment

In 2025, New China Life’s total investment yield reached 6.6%, which is also the result of the company’s long-term commitment to value investing, long-term investing, and asset-liability management.

As for the interest-rate trend, we believe the short term will still show a volatile pattern. Credit spreads will narrow, while term spreads will widen. Short-term liquidity is relatively ample and offers stronger certainty, whereas volatility in ultra-long-term rates will increase, leading to divergence between short- and long-end rates. In a low-interest-rate environment, fixed-income investments need to seize changes in interest rates and structural opportunities to achieve reasonable returns.

Regarding the equity market, the company is optimistic about the medium- and long-term development of China’s capital markets. It will focus on three areas:

First, industries with high levels of business strength and ongoing improvements in performance.

Second, industries aligned with national strategic directions, especially areas related to new quality productive forces.

Third, investment targets that exhibit high dividend-yield characteristics in a low-interest-rate environment.

Adhere to an Absolute-Return Orientation

Based on the above judgments, in its 2026 asset allocation the company will follow the principles below.

First, adhere to asset-liability matching. Arrange asset duration and structure reasonably based on liability characteristics to ensure investment returns cover the cost of liabilities.

Second, adhere to diversified and multi-asset allocation. Optimize the portfolio structure among fixed income, equities, and alternative assets to enhance risk-resilience and return flexibility.

Third, adhere to an absolute-return orientation. In market volatility, focus on a margin of safety, seize structural opportunities, and achieve long-term, steady returns.

Overall, in 2026 the macro environment and financial markets will still have uncertainties, which are both challenges and opportunities for the management of insurance funds. The company will continue to track macro and policy changes, striving to create stable returns for customers and investors.

How to Respond to Equity-Market Volatility

For equity assets, the company should be said to attach great importance to the strategic role of equity assets in the entire investment portfolio—based on its strategic judgment that China’s capital markets will remain favorable over the long term and are full of resilience.

In 2026, the company will continue to respond to long-term market guidance, and, in combination with the needs of liability management and specific changes in the market, adhere to the overall principle of making progress while staying stable, coordinating the timing and structure of equity-asset allocation.

Regarding the impact of capital-market volatility on the company’s business operations and management, it has three understandings:

First, under the concept of diversified long-equity investing, it makes diversified asset allocation. Equity-asset allocation includes our layout across industry distribution, as well as A-shares and H-shares, including both active and passive strategies, including the distribution of dividend-style assets and growth-style assets. Through portfolio effects, it achieves dispersion of related volatility.

Second, strengthen investment and research as an integrated, research-driven investment approach. Practice shows that our investment team can identify new strategic targets including valuation, high dividend yields, and high growth, demonstrating our professional confidence in this area.

Third, under the broad framework of asset management, particularly in combination with the liability side—including the transformation involving dividend insurance—do a good job in asset-liability management based on account incentive mechanisms.

Talking About the Honghu Private Fund

Regarding several long-term insurance-fund reform pilot funds established jointly by New China Life and China Life (Honghu funds), starting from March 2024, in the past two years the pilot has proceeded through three phases, achieving a “double harvest” of both social and economic benefits.

In terms of capital injection into Honghu funds, New China Life has cumulatively invested RMB 46.25 billion. The establishment of the fund helps optimize asset-liability management and is also beneficial for stabilizing the long-term healthy development of the capital market.

In diversified investment, the company firmly executes this strategy. There are mainly three considerations for the choice of direction:

First, in a low-interest-rate environment, through diversification of asset types, industry distribution, and regional layout, it expands the investment space and enhances the long-term return core of the portfolio.

Second, in response to the country’s transition from old to new growth drivers and the development of strategic emerging industries, it provides broad space for insurance capital to participate in diversified investment.

Third, leveraging the company’s years of accumulated investment capability and continuously improving professional specialization, including risk management and digitalization development across front-, middle-, and back-office functions, it provides a foundation for carrying out professional investment.

Wealth-Management Opportunities for Life-Insurance Companies

The “Ten New Articles” for the insurance industry have placed wealth management as the main responsibility of insurance companies, greatly enriching and expanding the scope and breadth of insurance. At present, public demand for preserving and increasing wealth is very strong and diversified, and it is continuously flowing toward capital markets and insurance products.

We are entering a golden window period for the transfer of wealth preservation and wealth appreciation. The advantages of insurance products’ steady returns, retirement reserves, intergenerational inheritance, and more are further highlighted—this is an opportunity.

From the perspective of challenges, the top challenge currently facing China’s life insurance industry is how to properly manage the risk of spread losses in a low-interest-rate environment, achieve effective asset-liability matching and coordinated development. The yield on 10-year government bonds is still low. The financial investment attributes of areas such as non-standard and alternative real estate in the past have clearly declined when customers choose to purchase insurance. After a large amount of premiums flows into insurance companies, how to convert these premiums into long-term returns that can survive across cycles, beat volatility, and ultimately deliver long-term return payouts to customers will place higher demands on a life insurer’s operating capability and investment capability.

High Base Premium Income Growth

In 2025, the company indeed achieved relatively outstanding results: total premium growth reached 15%. Long-term regular-payment premiums also achieved relatively rapid growth, which helps establish a higher base for us and also brings some pressure. However, we are confident that we can continue to maintain steady growth on top of the high base.

Specifically regarding product and competitive strategies, first, it practices a marketing philosophy of scenarios + products + services + technology, and deepens the product model. By introducing external medical resources, with disease treatment and nursing as the core, it enriches health-insurance products. At the same time, it integrates retirement wealth-management products with retirement community resources to build an insurance-plus-retirement travel and living model, strengthen asset-liability linkage, and support the development of differentiated products.

Second, it addresses the diversified retirement and wealth-management needs under an aging society. In 2026, it will still strengthen the sales of risk-based incremental whole life insurance, while also increasing the promotion of long-term annuities, retirement annuities, and other products. In combination with the individual pension system and tax-advantaged policies, it will include products such as lifetime annuities and retirement annuities in the relevant systems to meet customers’ retirement and wealth-management needs.

Third, it builds a health-protection product system, providing a full-cycle solution from pre-event prevention, in-process control, and post-event rehabilitation. It strengthens alignment with social-insurance medical reform, and explores the development of participating health insurance, consumer-type medical insurance, specific medication protection, nursing care disability insurance, and other products.

Regarding risk transformation, the company achieved initial progress in 2025. On one hand, it made breakthroughs in sales: the annual sales scale of participating dividend insurance reached about RMB 2 billion, achieving the expected results in the context of transformation. On the other hand, the risk management system has taken shape initially. The company integrated resources across front-, middle-, and back-office functions, and rolled out a series of measures around performance evaluation, product control, team training, ecosystem coordination, compliance guidance, and more, forming a relatively complete risk management system.

AI Deployment

In 2026, New China Life’s AI deployment will continue to gain momentum in four directions.

First, in technology governance, relying on the digital committee, it will fully implement the technology plan of the “15-Year Plan” and deepen the new technology-governance pattern of “dual-wheel drive.”

Second, in AI applications, this year it will build seven major digital employees covering high-frequency areas such as training, customer service, group insurance, claims handling, policy administration office work, and investment advisors. Through coordination of large and small models, it is expected to improve the efficiency of digital production capacity—equivalent to 3,000 FTEs. This will enable robots to complete work that can be substituted, so employees can focus on high-value work.

Third, deeply mine data value and construct an integrated data architecture with “two platforms and five levels,” so that data moves from “visible” to “usable,” becoming a core asset for business growth.

Fourth, strengthen the data foundation to form a “one cloud, multiple new” basic architecture, enabling elastic scheduling and management of pools of resources for computing, storage, and computing-power networks, to ensure business continuity.

In short, AI has deeply penetrated every link of New China Life’s business and management, becoming a core engine for high-quality development. The company will maintain strategic resolve, balance human resources and technology investment, and under the guidance of the “15-Year Plan,” strive to ensure AI generates greater effectiveness.

Risk Warning and Disclaimer Terms

        There are risks in the market; investing requires caution. This article does not constitute personal investment advice, nor does it consider any specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article are consistent with their specific circumstances. Investing based on this is at your own risk.