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

Another large state-owned insurance company has spoken out, revealing its investment situation in the capital market.

Recently, China Life Insurance held its 2025 annual performance briefing. At the meeting, it was disclosed that China Life has implemented the requirement for medium- and long-term funds to enter the market, exceeding the goal of “30% of new premiums used to invest in the A-share market.” In 2025, net additions to A-shares exceeded 40 billion yuan, with the proportion of secondary market equities in asset allocation increasing by 4.3 percentage points.

The annual report shows that last year, China Life received increased investments from peers in the insurance industry, with New China Life Insurance entering the top ten shareholders list. By the end of 2025, two product accounts under New China Life held 82.201 million shares and 76.609 million shares of China Life, respectively, with shareholding ratios of 0.19% and 0.17%, ranking as the fifth and sixth largest shareholders. These holdings were all newly added in 2025, with significant increases in the fourth quarter.

The proportion of stock investments increased by 5 percentage points.

By the end of 2025, China Life’s investment assets totaled 1.9 trillion yuan, a year-on-year increase of 15.8%. In 2025, total investment income reached 92.323 billion yuan, up 12.4% year-on-year; net investment income was 58.747 billion yuan, a year-on-year increase of 2.5%; total investment return rate was 5.7%, up 0.1 percentage points year-on-year; and net investment return rate was 3.6%, down 0.3 percentage points.

The annual report shows that by the end of 2025, China Life’s equity investment amount was 166.2 billion yuan, a year-on-year increase of 176%, with the proportion of investment assets rising from 3.7% at the end of the previous year to 8.7%, an increase of 5 percentage points. Among these, OCI stocks grew from 27.3 billion yuan at the end of 2024 to 70.5 billion yuan.

China Life President Zhao Peng introduced that in 2025, China Life’s TPL (Fair Value Changes Included in Current Profit and Loss) stocks and stock fund comprehensive return rate was 30.4%, while OCI (Fair Value Changes Included in Other Comprehensive Income) stocks had a comprehensive return rate of 19.2%.

China Life Vice President Cai Zhiwei responded to how to cope with the low interest rate environment by saying that first, they would strengthen active investment management in fixed income, honing their strengths and striving for excellence; second, they would increase the contribution of high-dividend stocks to net investment income; and third, they would promote alternative investment transformation, building new growth poles for stable income.

Regarding increasing allocation to high-dividend blue-chip stocks, Cai Zhiwei mentioned that the investment scale of China Life Group’s OCI stocks grew by 158% compared to the beginning of 2025, with its proportion in investment assets rising by 2 percentage points, and the average dividend yield of held stocks reaching 4.27%, further enhancing the contribution of dividend income to net investment income.

At the same time, he stated that China Life’s equity investment practices a long-term value investment philosophy, innovatively establishing a strategic stock investment portfolio, focusing on high-quality assets that align with national strategic directions, with the portfolio’s net asset value growth rate exceeding 40% for the entire year.

First Quarterly Loss Since New Standards Implemented

In terms of performance, on March 26, China Life released its 2025 annual report indicating a net profit of 63.033 billion yuan for 2025, a year-on-year increase of 9.0%; the net profit attributable to shareholders was 46.646 billion yuan, up 8.8%, continuing to set a new annual profit record.

However, on the day after the performance announcement (March 27), China Life experienced a significant decline in the capital market. Both A and H shares of China Life opened lower, closing down 3.74% and 7.18%, respectively; the H shares of China Life Property & Casualty also fell after opening, dropping more than 8% at one point, and the closing decline narrowed to 1.2%.

The decline in stock prices stems from the capital market’s sensitivity not only to year-on-year performance but also to marginal changes—specifically the performance in the fourth quarter. In terms of performance, China Life reported a loss of 176 million yuan in the fourth quarter of 2025. This marked the first quarterly loss since the implementation of the new insurance contract standards and new financial instrument accounting standards (hereinafter referred to as the “new standards”) beginning in 2023.

Since the implementation of the new standards, the net profit and net asset fluctuations of insurance companies have increased, and in the first year of the new standards, there were already life insurance companies that reported quarterly losses. As a comprehensive insurance group primarily focused on property insurance, China Life’s quarterly performance had previously been relatively stable.

In the three years since the new standards were implemented, China Life’s quarterly net profit attributable to shareholders generally ranged from tens of billions to over 20 billion yuan, and even during the depressed and most pressured third quarter of 2023 in the capital market, it still achieved a profit of 600 million yuan. Therefore, the fourth quarter of 2025 broke the record of maintaining quarterly profitability. Among the three listed insurance groups in A-shares, China Life was also the only insurance company to report a loss in the fourth quarter last year.

Both Dividend Per Share and Dividend Ratio Increased

In the context of increased volatility in net profit after the new standards, the profit distribution policies of listed insurance companies in recent years have attracted attention.

In 2025, China Life plans to distribute a cash dividend of 0.22 yuan per share for the whole year, a year-on-year increase of 22.2%; the cash dividend for property insurance will be 0.68 yuan per share for the whole year, a year-on-year increase of 25.9%.

Huatai Securities believes that China Life’s cash dividend per share for 2025 will grow by 22% year-on-year, significantly surpassing the net profit growth rate, with a dividend payout ratio of 21%, higher than the 19% in 2024, indicating the management’s increased intention to distribute dividends.

Zhao Peng stated that China Life has always attached great importance to shareholder returns, maintaining the continuity and stability of cash dividends. Over the past three years, the compound annual growth rates of cash dividends for the group and property insurance reached 18.8% and 17.9%, respectively.

He introduced that the current dividend policy needs to comprehensively consider the differences between the old and new standards, fully take into account capital constraints, and strive to achieve long-term stable growth of cash dividends per share. “Currently, regulatory authorities and supervising departments are still managing and assessing based on the old standards. Our 2025 dividend will continue to be based on the old standards, with the group’s dividend payout ratio maintained at over 30%, and the property insurance dividend payout ratio maintained at over 40%.”

This Year, Non-Car Insurance Expected to Achieve Underwriting Profit

Among the main businesses of China Life Group, the underwriting profitability of China Life Property & Casualty is a core indicator of concern. In 2025, China Life Property & Casualty achieved an underwriting profit of 12.443 billion yuan, a year-on-year increase of 75.6%. The comprehensive cost ratio was 97.6%, a year-on-year improvement of 0.9 percentage points, also the best level since the group was listed on A-shares in 2018. However, compared to the comprehensive cost ratio of 96.1% in the first three quarters, there was a significant increase in the fourth quarter.

Among the main insurance products of China Life Property & Casualty, auto insurance contributed nearly 60% of the insurance service revenue, achieving insurance service revenue of 305.335 billion yuan, a year-on-year increase of 3.6%. The comprehensive cost ratio for auto insurance was 95.3%, a year-on-year improvement of 1.5 percentage points; auto insurance underwriting profit was 14.258 billion yuan, a year-on-year increase of 53.6%. Among other insurance products, accident and health insurance achieved underwriting profit, with a cost ratio of 99.0%; agricultural insurance, liability insurance, and enterprise property insurance incurred underwriting losses.

Looking ahead to 2026, Zhang Daoming, a member of the Party Committee of China Life and Secretary of the Party Committee of China Life Property & Casualty, stated at the press conference that under normal circumstances, the company’s comprehensive cost ratio for auto insurance in 2026 will remain basically stable compared to 2025, while non-auto insurance is expected to achieve underwriting profit, with overall underwriting profits maintaining stable growth. In the coming years, the comprehensive cost ratio is expected to remain stable and continue to lead the industry.

He introduced that China Life expects that the effectiveness of “comprehensive governance” in non-auto insurance will be reflected first in the comprehensive expense ratios of property insurance, employer insurance, and liability insurance, which are expected to decrease by more than 2 percentage points year-on-year. Under the premise that other influencing factors are the same as the previous year, the company’s comprehensive cost ratio for non-auto insurance is expected to decrease year-on-year, achieving underwriting profit.