Insight into Annual Reports | Over 400 billion yuan in profit in one year! What new trends are revealed in the annual reports of listed insurance companies?

Over the past week, five A-share listed insurance companies (China Life, Ping An, PICC People’s Insurance, Taikang Bao, and New China Life) unveiled their 2025 “scorecards” one after another.

Needless to say, as the stock market rebounded, the attributable net profits of all five listed insurers increased year over year, with total profit exceeding 400 billion yuan.

Against the backdrop of impressive performance, Shell Finance reporter observed that last year all five listed insurers increased their allocation to stock investments, making the impact of volatility in the capital markets on profits greater. From the perspective of life insurance business, the premium growth rate in the individual agency channel lagged far behind that in the bancassurance channel, and dividend insurance has become the main line of business each insurer uses to drive insurance growth.

In addition, the listed insurers also “all in sync” mentioned multiple times in their annual reports the investments and layout in the field of artificial intelligence (AI), and intelligent transformation has become a major trend in the development of the insurance industry.

【Asset side】

Collectively increase holdings! Investment income drives profit growth Quarterly profit volatility rises

In 2025, the combined attributable net profit of the five A-share listed insurance companies was approximately 425.291 billion yuan. Among them, China Life had the highest growth rate in attributable net profit, up 44.1% year over year to 154.078 billion yuan; New China Life’s attributable net profit rose 38.3% year over year to 36.284 billion yuan. China Taikang, PICC People’s Insurance, and Ping An’s attributable net profit growth rates were 19%, 8.8%, and 6.5%, respectively.

Last year, as the capital market rebounded, the five listed insurers increased their equity investments, and improved investment income became the common reason for these insurers’ profit growth.

Shell Finance reporter found that last year the investment yield of all five listed insurers improved year over year. Among them, New China Life had the highest total investment yield, up 0.8 percentage points to 6.6%; China Life increased by 0.59 percentage points to 6.09%; China Taikang and PICC People’s Insurance increased by 0.1 percentage points each, both to 5.7%. Ping An disclosed its comprehensive investment yield, up 0.5 percentage points to 6.3%.

Behind the rise in total investment yield, insurers are collectively stepping up their pace of entering the market.

Data show that by the end of 2025, the stock investment amounts of all five listed insurers increased year over year, totaling approximately 2.51 trillion yuan, up sharply 75% compared with the end of 2024.

Meanwhile, by the end of 2025, the stock investment allocation of all five listed insurers had increased compared with the end of 2024. Among them, Ping An had the highest stock investment allocation at 14.8%, up 7.2 percentage points versus the end of 2024. New China Life’s stock investment allocation has remained at a high level for two consecutive years, at about 11.8% by the end of 2025.

A Haitong Securities research report states that in 2025, seven major listed insurance companies (in addition to the five A-share listed insurers above, also including China Taiping and Sunlight Insurance in Hong Kong) added 633.8 billion yuan to 1.2 trillion yuan in FVOCI stock (basically can be seen as high-dividend stocks) allocation scale, with the incremental allocation of more than twice the 312.0 billion yuan in 2024. “With interest rates staying low and rigid costs on the liability side remaining high and hard to lower, insurers still need to treat dividends as a necessary supplement to cash returns. It is expected that in the future every year they will still need to increase allocations by 400 billion to 600 billion yuan.”

It should be noted that although listed insurers benefit from higher investment income, capital market volatility is also relatively high, which will lead to significant swings in the quarterly profits of listed insurers.

For example, in the first three quarters of 2025, China Life’s attributable net profit was approximately 167.8 billion yuan, higher than the full-year 154.078 billion yuan from last year, which means China Life incurred a loss in the fourth quarter of 2025.

At China Life’s performance briefing, China Life’s president Li Mingguang said: “The profit in the fourth quarter of 2025 was negative, reflecting the netting of the full-year result against the results of the first three quarters. The main reason is that a structural adjustment occurred in the capital markets, and some of the company’s stock funds experienced a pullback in the fourth quarter of 2025.”

Li Mingguang said that most of this volatility is stage-based, reflecting changes in the capital markets. Life insurance companies have business characteristics with long cycles and cross-cycle operations. He advised everyone to reduce over-interpretation of profit figures for a single quarter.

Entering 2026, stock market volatility increased. The Shanghai Composite Index rose to a historical high of 4,197 points in early March, and then fell below 3,800 points during trading in late March. In such a market environment, how will listed insurers allocate equity assets this year?

At a company performance briefing, Qin Hongbo, vice president of New China Life, said the company is firmly optimistic about the medium- and long-term development prospects of China’s capital market. It mainly focuses on three core themes: industries with rising business conditions and sustained performance improvement; industries that align with the national strategic direction; especially areas related to new quality productive forces; and continuing to promote a high-dividend investment strategy in a low-interest-rate environment.

At a company performance briefing, Cai Zhiywei, vice president of PICC People’s Insurance, said that equity investment is the decisive factor in stabilizing and improving investment performance. The company will continue to focus on the allocation of high-dividend stocks with OCI (fair value changes recorded in other comprehensive income), and at the same time focus on growth opportunities embedded in the “14th Five-Year Plan into the 15th Five-Year Plan” strategy, strengthen research into key industries and key segments, and build a long-term equity investment portfolio with stable performance, market competitiveness, and a more balanced structure.

【Liability side】

Dividend insurance becomes the main product line Prevent risks related to interest spread losses

In 2025, while the asset side of listed insurers performed well as the stock market rebounded, the liability side also saw some new trends.

As observed by Shell Finance reporter, dividend insurance has become the main product type driving premium growth across various listed insurers.

In its annual report, China Life said that during the reporting period, the dividend insurance business achieved rapid growth, accounting for nearly 60% of first-year premiums in the individual agency channel, rising to become an important support for new policy premiums.

Taikang Life’s 2025 dividend-type new insurance business had premium for the new policy period of 22.156 billion yuan, up significantly year over year. Within the premium for the new policy period, the share of dividend insurance increased to 50.0%.

In 2025, New China Life’s premium income for dividend-type insurance from original insurance premiums was 37.604 billion yuan, up 33% year over year. The annual report said that the share of dividend insurance in total premium for term-by-term policies increased quarter by quarter, with the dividend insurance share reaching 77.0% in the fourth quarter.

In 2025, Ping An’s life and health insurance subsidiaries’ premium income from dividend insurance increased 41% year over year to 91.887 billion yuan. In its annual report, it said that in a low-interest-rate environment, the company strengthened the research and development of floating-return products, and enhanced the attractiveness of dividend products by building a differentiated dividend account system.

This is consistent with the broader industry trend. According to relevant statistics from the China Insurance Industry Association, in 2025, original premium income from dividend insurance reached 904.2 billion yuan, up 18.06%, making it the fastest-growing business in the life insurance industry.

A Kaiyuan Securities research report analyzed that in a low-interest-rate environment, dividend insurance has both a guaranteed return and floating returns, so product appeal has improved significantly and it has become a main channel for capturing the transfer of deposits. Meanwhile, regulatory policies support insurers to enhance floating-type products in order to address long-term interest spread loss risks, and the restart of dividend-type critical illness insurance has brought new opportunities to the industry. “An increase in the share of dividend insurance is beneficial for reducing insurers’ interest spread loss risk and lowering volatility in financial statement indicators.”

At a performance briefing, New China Life’s president Gong Xingfeng said that promoting the transformation of dividend insurance is an important measure to prevent interest spread loss risks. Dividend insurance products are also the most effective type of product for letting customers share the company’s development results. “But in terms of value rate, dividend insurance does indeed decline slightly compared with traditional insurance, which will pose certain challenges to the growth of new business value and the value rate. The company has implemented a series of initiatives to drive continuous and stable growth in new business value.”

【Channel side】

Growth in bancassurance far exceeds that in individual agency channels

In terms of channels, all listed insurers show a trend in which the growth rate of premiums in the bancassurance channel is far higher than that in the individual agency channel.

For example, in 2025, New China Life’s premium income in the individual agency channel grew 4.0% year over year, while premiums in the bancassurance channel grew 39.5% year over year; PICC People’s Insurance’s life insurance premium income from original insurance in the individual agency channel grew 5.4% year over year, while original insurance premium income in the bancassurance channel grew 33.5%; China Life’s total premiums in the individual agency channel grew 4.3% year over year, while total premiums in the bancassurance channel grew 45.5%.

On the one hand, this is related to the higher base of premiums in the individual agency channel. On the other hand, it also indicates that insurers are vigorously developing bancassurance channels, which is indeed an inevitable trend following changes in regulatory policies.

In August 2023, the bancassurance channel launched “one submission, one compliance” (meaning the insurance company submits product pricing assumptions used in materials for product approval or filing to the regulators, including assumptions such as expenses, and these must remain consistent with the company’s behavior in actual operations). In the first half of 2024, the premiums in the bancassurance channel for life insurance business of listed insurers declined across the board.

However, as the policy effects gradually released, and combined with the 2024 regulatory guidance that broke the rule that each commercial bank branch can cooperate with no more than 3 insurance companies for insurance agency business within the same fiscal year, there is no restriction on the number of insurance companies that local branches and outlets can cooperate with. In 2025, the bancassurance channel for life insurance business of listed insurers experienced a full-scale outbreak.

Looking ahead, the bancassurance channel will continue to be one of the main channels for listed insurers to focus on. At a performance briefing, Lan Yonghong, assistant to the president of China Life, said the company will fully leverage its brand, wide coverage of outlets, its workforce, and its advantages from long-term cooperation with banks, and seize the current development opportunities.

【Technology side】

AI becomes a hot annual-report buzzword Top-tier and mid/small insurers’ differences in AI investment affect the industry’s competitive landscape

Apart from operating performance, Shell Finance reporter also noticed that artificial intelligence has become a major buzzword in the annual reports of listed insurers.

A search by the reporter found that China Ping An’s 2025 annual report mentions AI or artificial intelligence 75 times; China Taikang’s annual report mentions it 31 times; and China Life’s annual report mentions it 12 times.

China Ping An’s annual report shows that its AI technology has been applied across multiple areas, including policy issuance, claims, risk control, auditing, and service. In 2025, relying on technologies such as AI digital robots and intelligent camera recognition, the insurer’s instant claim payout ratio was 59%; and Ping An Property & Casualty’s intelligent anti-fraud claims interception and loss reduction amounted to 10.51 billion yuan.

China Life uses AI to improve quality and efficiency. The share of AI-assisted programming code is 30%. In 2025, the operation rate of digital underwriting assistants exceeded 24%, and the intelligent audit rate for policy management services reached 99%.

At a performance briefing, Qin Hongbo said the company launched 11 large-model intelligent agents last year, covering front, middle, and back office; the problem-resolution rate is above 97%, and the answer accuracy is nearly 100%.

Zhu Junsheng, a postdoctoral researcher and professor of applied economics at Peking University, told Shell Finance reporter that AI is becoming the insurance companies’ “infrastructure.” When leading insurers apply AI in underwriting, claims, customer service, and other areas, essentially they are reshaping operational efficiency. What AI brings is not only cost reduction, but more importantly “improving efficiency + improving quality.” Therefore, insurers that complete AI capability deployment first will form ongoing advantages in the expense ratio, customer experience, and risk control capabilities.

Worth noting is that the big-ticket investment by leading insurers in new technologies such as AI stands in sharp contrast to mid/small insurers, and what impact will this have on the development of the insurance industry?

Zhu Junsheng further analyzed that AI investment has a distinct characteristic of “high upfront investment and later scale-based cost dilution.” Leading insurers, with stronger capital strength and more data accumulation, are more able to clear the initial investment threshold and lower unit costs through scale effects. Mid/small insurers, due to limited ability to invest, in the near term still rely more on manual work and traditional processes, with stronger cost rigidity. “If this difference continues, it will lead to a structural divergence in the industry’s expense ratio and operational efficiency.”

However, Zhu Junsheng believes that this difference does not mean mid/small insurers have no opportunities. Through third-party technology companies and others, mid/small insurers can, to a certain extent, “borrow power” to make up for capability gaps. Overall, the differences in AI investment will be reflected in efficiency and cost gaps in the short term, and in the long term they may evolve into a divergence in the competitive landscape. But as technology barriers gradually decline, this gap may not be irreversible. The key is whether insurers can find application paths that match their own resource endowments.

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责任编辑：Cao Ruitong