A Perspective on the Annual Reports of the Big Five Insurance Companies: How to Add Value through Equity Investments

Xue Jin China Securities Journal

The annual reports season for A-share insurance stocks has wrapped up. By taking a horizontal look at the investment performance of the five major insurers in 2025, in a low interest-rate environment, the shift toward “seeking returns from equities” has moved from slogans and visions into reality. Based on the 2025 performance reports of these insurers, China Life, PICC Life (China Insurance Group), New China Life, China Taiping, and Ping An together achieved attributable net profit of more than RMB 420 billion, up over 20% year on year. Looking at the breakdown of profits, investment income—especially the contribution from equity investments—should not be underestimated. At the same time, all the insurers are adding to their equity investments: on the one hand, by increasing investment scale and raising the allocation and weighting; on the other hand, by upgrading their investment strategies and moving toward more refined management.

Multiple insurers’ management teams said they will place high importance on the allocation value and strategic significance of equity-type assets within the overall investment portfolio. They will actively respond to policy guidance for long-term capital to enter the market, increase their efforts to embrace the equity market. Meanwhile, in light of their own asset-liability management needs and changes in the market environment, they will take into overall consideration the timing and scale of allocating equity-type assets, and enhance the resilience of the investment portfolio and the sustainability of returns through diversified and multi-pronged strategies.

Raising equity positioning

In a low interest-rate environment, insurers’ investment in fixed-income assets—the mainstay—has difficulty covering the cost of liabilities, making increasing allocations to equity-type assets a must. One key change in insurers’ investments highlighted by the 2025 annual reports is the adding of equity-type assets. According to industry insiders, this is both the result of regulatory guidance and a choice that follows market trends.

From the data, the equity investments of the five major insurers not only increased in scale, but their share in the portfolios also rose. By the end of 2025, the five insurers’ total investment assets exceeded RMB 20 trillion. Of this, equity investment totaled RMB 2.5 trillion, an increase of more than RMB 1 trillion from the end of 2024, representing a growth rate of as much as 75%. The proportion of equity assets to total investment assets also rose from 7.8% to 12.2%, up 4.4 percentage points.

If equity fund investments are added on top, the trend of adding to equities becomes even more pronounced. For example, China Life’s publicly traded equity investment scale exceeded RMB 1.2 trillion, and its allocation ratio rose by nearly 5 percentage points; Ping An’s balance of stock and equity fund investments was RMB 1.24 trillion, with the allocation ratio rising by 9.3 percentage points to 19.2%.

With the 2025 capital market recovering, the equity additions by insurers’ funds generated relatively rich returns, opening up a favorable window for profits and adding upside elasticity to performance. Many insurers’ total investment return rates hit multi-year highs: New China Life at 6.6% and China Life at about 6.1%.

Zhao Peng, president of PICC Life (China Insurance Group), said that in 2025, PICC Life net added more than RMB 40 billion to A-shares, with the proportion of equities in the secondary market rising by 4.3 percentage points to 13.3%, and the amount invested in stocks and funds increasing to more than RMB 200k. The company’s TPL (fair value changes recognized in profit or loss for the current period) stock and stock-and-fund comprehensive investment return rate reached 30.4%, while its OCI (fair value changes recognized in other comprehensive income) stock comprehensive return rate was 19.2%.

“When the market was sluggish, we positioned ourselves against the trend. In 2025, we strategically increased the equity ratio by nearly 5 percentage points, especially by focusing on technology stocks that represent the direction of China’s new quality productive forces. Investing in line with historical trends and keeping up with the tide of the times is the primary reason for the improvement in performance.” Liu Hui, vice president of China Life, said, “In our equity investments in 2025, we seized structural opportunities in the market, captured the upcycle of the growth style, and the TPL equity comprehensive investment return rate was close to 30%.”

More refined management of equity investments

Given the increasingly complex market environment, many insurers’ management teams believe that in the future, equity investments still need to be managed in a more refined way, adapting to circumstances.

“Equity investment is the decisive move for stabilizing and improving investment performance. We will adhere to steady progress, continuously focus on the allocation of OCI high-dividend stocks, and at the same time focus on the growth opportunities embedded in the ‘15th Five-Year Plan’ Outline, strengthen research on key industries and key industrial sectors, reasonably plan the TPL stock allocation, and build a long-term equity investment portfolio that is steady in performance, has market competitiveness, and is more balanced.” Regarding the direction of upcoming equity investments, Cai Zhixie, vice president of PICC Life (China Insurance Group), said.

“We will effectively increase the proportion of publicly traded equity investments.” Su Gang, vice president of China Taiping, said that China Taiping will, for the long term, stick to the dividend value core strategy, focusing on listed companies that simultaneously have high capability for dividend distribution and stable growth prospects, and using such high-quality assets as the core bottom holding. At the same time, it will strengthen the overall anti-drawdown capability of its equity investment portfolio and build a more comprehensive satellite strategy framework, covering multiple key areas such as technological innovation, big health, and big consumption.

Guo Xiaotao, co-CEO of Ping An, said that Ping An’s core investment thinking this year is “finding certainty amid uncertainty.” “For long-cycle patient capital, the most important thing in investing is to stay aligned with the direction of national economic development,” he said. He noted that new quality productive forces, infrastructure, medical and health aging, building a strong financial sector, and a healthy China are all factors of certainty. These are important directions for Ping An’s long-term allocation.

“Through scientific broad-category asset allocation and diversified investing, we reduce the sensitivity of the overall portfolio to fluctuations in any single market. We will reasonably use the asset classification mechanism under the new financial instrument standards and properly manage the impact of fair value fluctuations of equity-type assets on the income statement.” Chen Yijiang, president of Xinhua Asset Management, said he will proactively create excess returns by selecting outstanding external managers, fully leverage market-based forces to diversify risk, reduce the impact of volatility from a single strategy, focus on improving multiple research and investment capabilities, and strive to obtain excess returns through active management amid volatility.

Move forward steadily while maintaining balance

Insurers’ funds are stepping up their efforts to embrace the equity market. At the same time, against the backdrop of the new accounting standards amplifying the effect of profit volatility, they will work to mitigate the impact of capital market fluctuations on the income statement through strategies such as diversified instruments and diversified allocations. Multiple insurers’ management teams said that they need to broaden asset types and enrich investment strategies to enhance the portfolio’s overall return capability and resilience.

Liu Hui said that for alternative investments, equity investments, and the like, the company has always placed great importance on them. “Over the past two years, our alternative investments have mainly been distributed in debt-type financial products. At the same time, we also participate in investments in equities and private funds, as well as investments such as REITs and ABS. Alternative investment is an important tool for us to address challenges in the overall low interest-rate environment. The company will continue to improve its ability in alternative investments so that it can play a more important role in the investment portfolio.”

“In 2026, we will continue to intensify the development and allocation of innovative alternative products such as asset securitization, and use the private equity funds that have been established and are planned to be established by the PICC Group as the starting point. We will focus on areas related to the country’s key strategies and the development of insurance business, and proactively seize investment opportunities embedded in the construction of strategic emerging industries and modern industrial systems.” Cai Zhixie said.

Chen Yijiang said that New China Life will continue to increase efforts in diversified asset allocation. The long-term investment nature of insurance funds naturally aligns with asset categories such as alternative investments and equity investments. The company will actively leverage the advantages of patient capital. While serving national strategies and the development of the real economy, it will share the long-term investment returns brought by economic transformation and upgrading. Diversified allocation helps reduce correlations among different asset types, improve the portfolio’s risk-return ratio, and enhance the sustainability and stability of investment performance.

(Editor: Qian Xiaorui)

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