Net increase in A-shares holdings exceeds 40 billion yuan! China People's Insurance latest statement, receiving a massive increase in industry funds

Yet another country’s large insurance company group has spoken up, revealing its capital market investment situation.

Recently, China Life Insurance Company (PICC?) held its 2025 annual results briefing. At the meeting, it was disclosed that PICC has implemented requirements for medium- and long-term funds to enter the market, and has exceeded the target of using 30% of newly added premiums for investment in China’s A-share market. In 2025, net purchases of A-shares exceeded RMB 40 billion, and the allocation to secondary-market equity in asset allocation increased by 4.3 percentage points.

The annual report shows that last year PICC received additional holdings from insurance peers’ investments, with New China Life Insurance joining the list of the top ten shareholders. As of the end of 2025, in New China Life Insurance’s two product capital accounts, they held 82.201 million shares and 76.609 million shares of PICC, respectively, with ownership ratios of 0.19% and 0.17%, ranking fifth and sixth among shareholders. The relevant shareholdings were all newly added in 2025, and the increase was especially evident in the fourth quarter.

Stock investment mix rises by 5 percentage points

As of the end of 2025, PICC’s invested assets totaled RMB 1.90 trillion, up 15.8% year over year. In 2025, total investment returns were RMB 92.323 billion, up 12.4% year over year; net investment returns were RMB 58.747 billion, up 2.5% year over year; the total investment return rate was 5.7%, up 0.1 percentage point year over year; and the net investment return rate was 3.6%, down 0.3 percentage point.

（End of 2025 PICC investment portfolio）

The annual report shows that as of the end of 2025, the value of PICC’s equity holdings in stocks was RMB 166.2 billion, up 176% year over year. The proportion of stocks in invested assets rose from 3.7% at the end of the previous year to 8.7%, an increase of 5 percentage points. Among them, OCI stocks increased from RMB 27.3 billion at the end of 2024 to RMB 70.5 billion.

PICC’s President Zhao Peng said that in 2025, the TPL (fair value changes recognized in profit or loss for the period) stock and fund (equity and fixed-income) composite return rate of PICC was 30.4%, and the OCI (fair value changes recognized in other comprehensive income) stock composite return rate was 19.2%.

PICC’s Vice President Cai Zhwei, in responding to how to deal with a low interest-rate environment, said that: first, it will strengthen active management of fixed-income investments, build long-term strengths, and pursue excellence; second, it will increase the contribution of high-dividend stocks to net investment returns; and third, it will push the transformation of alternative investments and build a new growth engine for obtaining stable returns.

Regarding increasing allocations to high-dividend blue-chip stocks, Cai Zhwei noted that PICC Group’s OCI stock investment scale increased by 158% compared with the beginning of 2025. As a share of invested assets, it rose by 2 percentage points. The average dividend yield of the held stocks reached 4.27%, further enhancing the contribution of dividend income to net investment returns.

At the same time, he said that PICC’s equity investments follow a long-term value investing philosophy, and it has innovatively set up a strategic stock investment portfolio, focusing on high-quality assets that align with national strategic directions. The portfolio’s net asset value increased by more than 40% over the entire year last year.

First quarterly loss after the new accounting standards

In terms of performance, on March 26, PICC released its 2025 annual report. In 2025, it achieved a net profit of RMB 63.033 billion, up 9.0% year over year; the net profit attributable to shareholders was RMB 46.646 billion, up 8.8% year over year, and full-year profitability continued to hit record highs.

However, on the day after the earnings release (March 27), PICC saw a sharp decline in the capital markets. Specifically, both PICC A-shares and H-shares opened lower, ending down 3.74% and 7.18%, respectively. The H-shares of its property and casualty insurance unit also fell after the open, once dropping by more than 8%, before narrowing the close decline to 1.2%.

The share-price drop was due to the fact that the capital market not only looks at year-over-year performance for the full year, but is also more sensitive to marginal changes—i.e., the fourth-quarter performance. Judging from the results, PICC’s property and casualty insurance business recorded a loss of RMB 176 million in the fourth quarter of 2025. This is the first time PICC has reported a single-quarter loss since it began applying the new insurance contract accounting standards and new financial instruments accounting standards (hereinafter “the new standards”) in 2023.

After the adoption of the new standards, fluctuations in insurers’ net profit and net assets have both increased, and even in the first year under the new standards, life insurers have experienced quarterly losses. As a comprehensive insurance group mainly engaged in property and casualty business, PICC’s performance in prior quarters had been relatively stable.

Previously, during the three years since adopting the new standards, PICC’s quarterly net profit attributable to shareholders generally ranged from several tens of billions of RMB to more than RMB 20 billion, even in the third quarter of 2023—the most pressured period amid weak capital markets—when it still posted a profit of RMB 600 million. Therefore, in the fourth quarter of 2025, it broke the record of maintaining profitability in each quarter. Among the three listed insurance groups in A-shares, PICC was also the only insurer that had a loss in the fourth quarter last year.

Earnings per share distribution and dividend payout ratio both rise

Against the backdrop of increased net-profit fluctuations under the new standards, investors have paid attention to profit distribution policies of listed insurers in recent years.

In 2025, PICC proposed a full-year dividend of RMB 0.22 per share, up 22.2% year over year; and for property and casualty insurance, a dividend of RMB 0.68 per share for the full year, up 25.9%.

HSBC? (Huatai Securities) believes that PICC’s dividend per share in 2025 increased 22% year over year, significantly outpacing the growth rate of net profit. The dividend payout ratio was 21%, higher than 19% in 2024, showing that management has increased its willingness to distribute dividends.

Zhao Peng said that PICC always attaches great importance to shareholder returns and maintains the continuity and stability of cash dividends. Over the past three years, the group’s and property and casualty’s cash dividend compound annual growth rates were 18.8% and 17.9%, respectively.

He said that the current dividend policy needs to take into account differences between the old and new standards, fully consider capital constraints, and strive to achieve long-term stable growth in dividend per share. “At present, regulatory authorities and competent departments still manage and assess us based on the old standards. For our 2025 dividends, we continue to follow the old standards as a basis. The group’s dividend payout ratio remains above 30%, and the property and casualty’s dividend payout ratio remains above 40%.”

Non-auto insurance is expected to return underwriting profits this year

Among PICC Group’s main businesses, underwriting profitability in property and casualty insurance is a core metric that draws attention. In 2025 full year, PICC’s property and casualty insurance achieved underwriting profit of RMB 12.443 billion, up 75.6% year over year. The combined ratio was 97.6%, improved by 0.9 percentage points year over year as well, which was also the best level since PICC listed its A-shares in 2018. However, compared with the 96.1% combined ratio in the first three quarters, the cost ratio in the fourth quarter rose noticeably.

Among PICC’s main insurance lines, motor insurance contributes nearly 60% of insurance service revenue. Motor insurance recorded insurance service revenue of RMB 305.335 billion, up 3.6% year over year. The combined ratio for motor insurance was 95.3%, improved by 1.5 percentage points year over year; underwriting profit from motor insurance was RMB 14.258 billion, up 53.6% year over year. For other insurance lines, accident & health insurance generated underwriting profit, with a cost ratio of 99.0%; while agricultural insurance, liability insurance, and corporate property insurance incurred underwriting losses.

Looking ahead to 2026, Zhang Daoming, a member of PICC’s Party Committee and Party Secretary of PICC’s property and casualty insurance, said at the briefing that under normal market conditions, in 2026 the combined ratio of the company’s motor insurance will remain basically stable compared with 2025. Non-auto insurance will achieve underwriting profit, and overall underwriting profit will maintain stable growth. Over the coming years, it is expected that the combined ratio will remain stable and continue to stay ahead of the industry.

He also said that PICC expects that in 2026, the effectiveness of non-auto insurance’s “comprehensive governance” will first be reflected in the comprehensive expense ratios of insurance lines such as corporate property insurance, employer’s liability insurance, and workplace safety liability insurance. These expense ratios are expected to decline by more than 2 percentage points year over year. Under other influencing factors being broadly the same as the prior year, the company expects its non-auto insurance combined ratio to decline year over year and achieve underwriting profits.

Editor: Luo Xiaoxia

Layout: Liu Junyu

Proofreader: Wang Wei