Investment return volatility: First-quarter profits of listed insurance companies vary significantly

Farewell to the “strong profitability” of 2025, how did the performance of five A-share listed insurance companies in the first quarter of 2026 look?
On April 29, China Life, Ping An, PICC, China Pacific Insurance, and New China Insurance, five A-share listed insurance companies, announced their Q1 2026 reports.
Together, they achieved a total net profit of 69.88B yuan, a year-on-year decrease of 16.98%.
Overall, the profit growth rates of the five insurers varied, and amid significant stock market volatility in the first quarter, investment returns generally faced pressure.
However, compared to the pressure on assets, the liability side was driven by factors such as “deposit migration,” strong sales of dividend insurance, and channel efforts, leading to a broad increase in life insurance business.

Rising equity positions amplify profit volatility

In the first quarter, China Life, Ping An, PICC, China Pacific Insurance, and New China Insurance collectively posted a net profit of 69.88B yuan, down 16.98% year-on-year.
Specifically, the fastest-growing profit in Q1 was from New China Insurance, which achieved a net profit attributable to shareholders of 6.5B yuan, up 10.5%; followed by China Pacific Insurance, with a net profit of 10.04B yuan, up 4.3%.
Additionally, Ping An, China Life, and PICC recorded net profits of 25.02B yuan, 19.51B yuan, and 8.81B yuan respectively, with their profitability showing varying degrees of decline.

Many listed insurance companies experienced performance fluctuations in Q1, mainly influenced by the investment side.
For example, China Pacific Insurance’s net investment yield on investment assets in Q1 was 0.7%, down 0.1 percentage points year-on-year; the total investment return was 0.8%, down 0.2 percentage points.
“Due to geopolitical conflicts, market turbulence, and other factors, the yield on equity assets under new accounting standards has faced temporary pressure. Since April, the capital market has stabilized and rebounded, and investment returns are expected to improve significantly,” China PICC analyzed.

Wang Peng, a deputy researcher at Beijing Academy of Social Sciences, believes that the overall decline in investment returns among insurers in Q1 stems from sharp volatility in equity markets and low long-term interest rates.
The asset scarcity in the bond market and frequent style shifts in the stock market make it harder for existing assets to appreciate.

Recently, several brokerages have expressed similar views, predicting that the performance of listed insurers in Q1 was under pressure mainly due to market fluctuations dragging down investment returns.
Currently, the secondary market equity positions of listed insurers are high, and their profit sensitivity to equity assets is also elevated, meaning market volatility will exert pressure on their quarterly profits.

Beijing Business Today learned that in recent years, listed insurers have actively implemented the requirement for long-term funds to enter the market, increasing equity asset investments.
Meanwhile, under new insurance contract standards and new financial instrument accounting standards, many equity assets are classified as FVTPL (measured at fair value with changes recognized in current profit or loss), with market value changes reflected directly in current profits.
Thus, fluctuations in capital market conditions have a more direct impact on performance, making insurers’ profit volatility more pronounced.

Unlike other industries, life insurance companies have long-cycle and cross-cycle operational characteristics.
Only over longer periods can the management effectiveness of life insurers become more apparent.
As China Life’s President Li Mingguang previously analyzed, most of their investment assets and insurance contract liabilities are measured at current market value, and changes in market value are reflected in the income statement or balance sheet.
Therefore, net profits and net assets fluctuate with market conditions.
The shorter the cycle, the greater the impact of volatility, and this fluctuation is a common phenomenon in their operational process.

Broad increase in new business value of life insurance

Unlike the divergence in net profits, the quality of insurance business among listed insurers in Q1 generally improved, with all five companies seeing a year-on-year rise in new business value.
The so-called new business value refers to the discounted expected future profits of newly sold policies, reflecting the company’s operational capability and sales expansion of new business.
It is a key indicator of an insurance company’s value, profitability, and sustainable development, thus closely watched by management and shareholders.

Ranking by growth rate, China Life’s new business value in Q1 increased by 75.5%; followed by New China Insurance, with a new business value of 4.66B yuan, up 24.7%.
Both Ping An’s life and health new business value and PICC’s new business value also achieved double-digit positive growth, with PICC Life’s new business value up 21% year-on-year, and Ping An’s life and health new business value up 20.8%.
Additionally, China Pacific Insurance’s life insurance new business value in Q1 was 6.37B yuan, with a growth rate of 9.6%.

Jiang Han, senior researcher at Pangu Think Tank, analyzed that the overall high growth in life insurance new business value in Q1 mainly benefited from the release of savings demand under the “deposit migration” trend.
In a low-interest-rate environment, residents are strongly motivated to shift savings into insurance products, especially dividend insurance with “guaranteed + floating” returns, which has become a mainstream product to meet this demand.
Secondly, the “reporting and operating integration” policy has led the industry to move away from cost “involution” toward value competition centered on products and services.

From the channel perspective, under the “reporting and operating integration” regulation, the distribution pattern of life insurance channels has undergone profound changes.
In this context, bancassurance channels have shifted from scale contribution to value responsibility.
For individual channels, insurers are actively transforming by integrating ecosystems, scenarios, equity, and insurance services, focusing on refined customer management to enhance customer stickiness and business quality.
For example, Ping An continuously enriches and upgrades its insurance product system to offer more comprehensive options, while leveraging its medical and elderly care ecosystem to gradually introduce “insurance + services” products.
China Life emphasizes improving channel professionalism, enhancing product and service capabilities, and fully meeting diverse customer needs for annuities, life, and health insurance, with rapid growth in new insurance business.

Further optimization of the comprehensive cost ratio in property insurance

Unlike the booming life insurance sector, the property insurance industry has entered a stable cycle.
Currently, the “Big Three” in property insurance—PICC Property & Casualty, Ping An Property & Casualty, and China Pacific Property & Casualty—maintain their leading positions through scale advantages.

In Q1, these three companies continued to keep their combined cost ratios low and further optimized.
By the end of Q1, PICC P&C’s combined cost ratio was 94.2%, a 0.3 percentage point improvement; Ping An P&C’s was 95.8%, down 0.8 percentage points; and China Pacific P&C’s underwriting combined cost ratio was 96.4%, down 1 percentage point.

Jiang Han believes that the excellent performance of these property insurers’ combined cost ratios in Q1 mainly stems from prudent underwriting.
Cost-side improvements are also driven by the “reporting and operating integration” reform in non-auto insurance, which requires insurers to strictly adhere to approved expense ratios, effectively curbing malicious cost competition through “small accounts,” thereby highlighting the cost control capabilities of leading insurers.

Looking ahead, new energy vehicle insurance is expected to be a key focus for top insurers.
China Pacific Property & Casualty states that it is deepening research on the risk characteristics of new energy vehicles, promoting data sharing on claims and repairs, optimizing pricing models, and further enhancing specialized management capabilities.
Ping An Property & Casualty notes that the development of new energy vehicle insurance continues to improve, with original insurance premiums increasing by 16.1% year-on-year, and underwriting profitability remaining stable.

Beijing Business Today reporter: Li Xiumei