China Life's equity investment boost yields little effect; first-year premium income declines

Ask AI · Why is China Life’s equity investment boost struggling to generate returns?

Author: Liu Bai

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Recently, China Life released its 2025 annual report. In 2025, the company’s operating revenue was 615.68B yuan, up 16.5% year-on-year; net profit attributable to the parent was 154.08B yuan, up 44.1% year-on-year.

As of the end of 2025, China Life’s total assets and investment assets were 75.9 trillion yuan and 74.2 trillion yuan, respectively; shareholders’ equity attributable to the parent company reached 75.9k yuan, a 16.8% increase; the comprehensive solvency adequacy ratio was 174.01%, down 33.75 percentage points year-on-year; the core solvency adequacy ratio was 128.77%, down 24.57 percentage points year-on-year.

China Life stated that, influenced by market interest rate fluctuations and the growth of equity asset allocation, the solvency adequacy ratio declined compared to the end of 2024.

Two consecutive years of Q4 losses

China Life achieved a total net profit of 74.2k yuan in 2025, but suffered a loss of 14.88 billion yuan in the fourth quarter, attracting market attention.

In response, China Life President Li Mingguang said at the 2025 earnings press conference that fluctuations in net profit and net assets due to market price changes are normal and common. The negative profit in Q4 2025 was mainly due to structural adjustments in the capital market, with some stock funds held experiencing a correction in Q4 2025. These fluctuations are mostly temporary and reflect changes in the capital market, which is a normal phenomenon.

Meanwhile, Li Mingguang suggested that profit and loss statements and balance sheets of life insurance companies should be analyzed over longer cycles. Only over longer periods can the operational management effectiveness of life insurers become more apparent. Shorter cycles are more affected by volatility, which may be a common occurrence in the company’s operations.

Although Li Mingguang stated that the Q4 2025 loss is a normal phase, the solvency report shows that the company also experienced a loss in Q4 2024, amounting to 2.683 billion yuan in a single quarter.

The annual report shows that by the end of 2025, China Life’s investment assets reached 74.237 trillion yuan, a 12.3% increase from the end of 2024. The proportions of bonds, fixed deposits, and debt-based financial products remained stable, while the allocation to stocks and funds (excluding money market funds) increased from 12.18% at the end of 2024 to 16.89%. China Life stated that the main reason was a resolute effort to seize market opportunities and increase equity investments significantly.

By the end of 2025, China Life’s equity financial assets investment amounted to 16.727 trillion yuan, a 32.09% increase. Among these, stock investments totaled 8.353 trillion yuan, up 66.71%; fund investments totaled 4.218 trillion yuan, up 37.61%.

While China Life increased its investment in equity financial assets in 2025, the net investment income from equities did not grow substantially. In 2025, China Life’s net investment income from equities was 154.08B yuan, only a 0.77% increase year-on-year.

The annual report shows that in 2025, China Life’s total investment income was 2.68B yuan, an increase of 835.34B yuan from 2024; the total investment yield was 6.09%, up 59 basis points from 2024.

However, the growth in total investment income mainly depended on changes in gains and losses from buying and selling investment assets. In 2025, the company’s gains from trading investment assets were 421.84B yuan, compared to -34.75B yuan in 2024.

Growth in other investment income items for China Life in 2025 was also less than ideal, even negative. Fixed maturity net investment income was 387.69B yuan, up only 3.36% year-on-year; investment income from associates and joint ventures was 6.353 billion yuan, down 47.40%.

Notably, in March 2025, Yang Chao, former Party Secretary and President of China Life Insurance (Group) Company, was investigated and was expelled from the Party in December of the same year. Regulatory authorities pointed out that Yang Chao interfered in investment activities and illegally accepted large sums of money, exemplifying corruption in the investment sector.

Recently, senior management changes occurred at China Life’s asset management subsidiary. On March 11, China Life Investment Insurance Asset Management Co., Ltd. announced that Zhang Fengming would no longer serve as President, and Fang Haiyan was appointed as interim head.

First-year premium income declines

In terms of premiums, the annual report shows that China Life’s total premiums in 2025 were 79.44B yuan, up 8.7% year-on-year; first-year premiums were 132.95B yuan, down 2.41%.

Specifically, in 2025, first-year premiums for life insurance business were 4.25B yuan, down 1.97%; health insurance first-year premiums were 1.942 billion yuan, down 22.94%; accident insurance first-year premiums were 1.1502 billion yuan, down 13.46%.

Regarding sales channels, the decline in first-year premiums was mainly due to a drop in individual insurance channel premiums. The annual report shows that in 2025, first-year premiums from individual channels were 151.51B yuan, down 11.05%.

In 2025, China Life’s individual insurance sales force numbered 587k, a 4.55% decrease; among them, the marketing team had 371k members, and the sales and distribution team had 216k members, both declining.

The top five insurance products by total premiums in 2025 were China Life Xinxing Future Whole Life Insurance, China Life Xinyao Longteng Whole Life Insurance, China Life Xinfulinmen Annuity Insurance, China Life Urban and Rural Residents Major Disease Group Medical Insurance (Type A), and China Life Xinyi Fengtian Retirement Annuity (Dividend Type). The total premiums for these products were 6.35B yuan, 729.89B yuan, 116.21B yuan, 114.26B yuan, and 1.94B yuan, respectively. Notably, the surrender value for China Life Xinfulinmen Annuity Insurance in 2025 reached 11.5B yuan.

It is worth noting that China Life Xinfulinmen Annuity Insurance’s premiums in 2024 also ranked among the top five, but its surrender value was 1.18 billion yuan.

On online complaint platforms, many users have lodged complaints about China Life Xinfulinmen Annuity Insurance premiums. One user reported that in June 2023, a salesperson from China Life Nanshan Branch in Shenzhen offered a “big bait”: promising free low-cost trips to Xinjiang and Tengchong, and using “an annualized fixed interest rate of 2.5% for fund transfer” as a gimmick to promote an insurance product. The actual annualized return was only 0.13% (investing 1 million yuan for 15 years, with interest of 21,050 yuan). At that time, the policyholder explicitly requested to buy a short-term product of 3-5 years but was deliberately misled by Gou Xiaoqing, who signed the “China Life Xinfulinmen Annuity Insurance” (contract number: 2023-440***-SK2-500*****-8) on June 30. Only three months later, upon carefully reviewing the contract, the policyholder discovered that this premium of 100,000 yuan required continuous payments for 10 years, with a cycle of 16 years, which was completely inconsistent with the initial promise of “short-term fund transfer.” Gou Xiaoqing exploited the complexity of the insurance terms, failed to fully explain the core content of the product, and did not follow up afterward, completing the sale through false promises. Such deliberate concealment and misleading behavior constitute insurance fraud.

Previously, China Life had frequently received “penalties” for business violations, and many employees had been banned from the industry for deceiving policyholders.

On February 14, the Hubei Regulatory Bureau of the China Banking and Insurance Regulatory Commission published an administrative penalty disclosure, showing that China Life Hubei Branch and responsible personnel were fined 1.17 million yuan for fabricating false documents, using insurance business to seek improper benefits for others, providing benefits beyond the contractual agreement, and deceiving policyholders. They were warned and fined a total of 390k yuan.

On the same day, China Life Wuhan Branch and related individual agents were warned and fined 10k yuan for poor management and deceiving policyholders. Ding Xin was warned and fined 10k yuan, while Zhu Bobo and Shen Zongchen were permanently banned from the insurance industry.