Net increase in A-shares exceeds 40 billion yuan! China People's Insurance Corporation's latest statement: receives massive additional investment from industry peers

Another large state-owned insurance company has made a statement, revealing its investment situation in the capital market.

Recently, China Pacific Insurance held its 2025 annual performance press conference. It disclosed that China Pacific Insurance has met the requirements for long-term capital to enter the market, exceeding the target of “30% of new premiums used for investment in A-shares.” By 2025, net additional investment in A-shares exceeded 40 billion yuan, with the proportion of secondary market equity in asset allocation increasing by 4.3 percentage points.

The annual report shows that China Pacific Insurance received increased investments from peers in the insurance industry last year, with New China Life Insurance entering the list of the top ten shareholders. As of the end of 2025, two funds under New China Life held 82.201 million shares and 76.609 million shares of China Pacific Insurance, accounting for 0.19% and 0.17% of the shares, respectively, ranking as the fifth and sixth largest shareholders. These shareholdings 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 Pacific Insurance’s investment assets reached 1.90 trillion yuan, a year-on-year increase of 15.8%. In 2025, it achieved a total investment income of 92.323 billion yuan, up 12.4% year-on-year; net investment income of 58.747 billion yuan, up 2.5% year-on-year; total investment yield of 5.7%, an increase of 0.1 percentage points year-on-year; and net investment yield of 3.6%, a decrease of 0.3 percentage points.

(China Pacific Insurance’s investment portfolio as of the end of 2025)

The annual report shows that by the end of 2025, China Pacific Insurance held stocks worth 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 them, OCI stocks increased from 27.3 billion yuan at the end of 2024 to 70.5 billion yuan.

Zhao Peng, president of China Pacific Insurance, introduced that in 2025, the comprehensive yield of TPL (fair value changes included in current profits and losses) stocks and stock funds reached 30.4%, while the comprehensive yield of OCI (fair value changes included in other comprehensive income) stocks reached 19.2%.

Cai Zhiwei, vice president of China Pacific Insurance, stated in response to how to cope with the low-interest-rate environment that the first step is to strengthen active investment management in fixed income, honing strengths and pursuing excellence; the second is to increase the contribution of high-dividend stocks to net investment income; and the third is to promote alternative investment transformation, establishing new growth points for stable income.

Regarding increasing the allocation of high-dividend blue-chip stocks, Cai Zhiwei mentioned that the investment scale of OCI stocks in the China Insurance Group has grown by 158% compared to the beginning of 2025, and the proportion in investment assets has increased by 2 percentage points, with 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 the equity investments of China Pacific Insurance adhere to the 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 the new standards were introduced.

From the performance perspective, on March 26, China Pacific Insurance released its 2025 annual report, showing a net profit of 63.033 billion yuan, a year-on-year increase of 9.0%; net profit attributable to shareholders reached 46.646 billion yuan, up 8.8%, continuing to set record highs for annual profits.

However, the day after the performance announcement (March 27), China Pacific Insurance experienced a significant drop in the capital market. Both A and H shares opened lower, closing down 3.74% and 7.18%, respectively; the H shares of China Pacific Property & Casualty also fell after opening, dropping over 8% at one point, with the closing loss narrowing to 1.2%.

The decline in stock prices is due to the capital market not only considering year-on-year performance but also being more sensitive to marginal changes—specifically, the performance of the fourth quarter. From a performance perspective, China Pacific Insurance had a loss of 176 million yuan in the fourth quarter of 2025. This is the first quarterly loss for China Pacific Insurance since the implementation of the new insurance contract standards and the new financial instrument accounting standards (hereinafter referred to as the “new standards”) began in 2023.

Since the implementation of the new standards, the net profit and net assets of insurance companies have experienced greater fluctuations, with some life insurance companies reporting quarterly losses in the first year of the new standards. As a comprehensive insurance group primarily focused on property and casualty insurance, China Pacific Insurance had previously maintained relatively stable quarterly performance.

In the three years since the new standards were implemented, the quarterly net profit attributable to shareholders of China Pacific Insurance has generally been at levels ranging from tens of billions to over 20 billion yuan, achieving a profit of 600 million yuan even in the third quarter of 2023 when the capital market was sluggish and under significant pressure. Therefore, the fourth quarter of 2025 broke the record of maintaining quarterly profitability. Among the three listed insurance groups in A-shares, China Pacific Insurance was also the only insurance company to report a loss in the fourth quarter last year.

Both the dividend per share and the dividend rate have increased.

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

In 2025, China Pacific Insurance plans to distribute an annual dividend of 0.22 yuan per share, a year-on-year increase of 22.2%; the property and casualty insurance business plans to distribute an annual dividend of 0.68 yuan per share, a year-on-year increase of 25.9%.

Huatai Securities believes that China Pacific Insurance’s dividend per share is expected to increase by 22% year-on-year in 2025, significantly surpassing the growth rate of net profit, with a dividend payout ratio of 21%, higher than 19% in 2024, indicating the management’s willingness to increase dividends.

Zhao Peng stated that China Pacific Insurance has always placed great importance on shareholder returns, maintaining the continuity and stability of cash dividends. Over the past three years, the group’s and property and casualty insurance’s cash dividend compound annual growth rates reached 18.8% and 17.9%, respectively.

He introduced that the current dividend policy must comprehensively consider the differences between the new and old standards, fully take into account capital constraints, and strive to achieve long-term stable growth in dividends per share. “Currently, regulatory agencies and competent authorities still manage and assess according to the old standards. Our 2025 dividends will continue to be based on the old standards, with the group’s dividend payout ratio maintained above 30% and the property and casualty insurance payout ratio maintained above 40%.”

This year, non-auto insurance is expected to achieve underwriting profitability.

Among the main businesses of China Pacific Insurance Group, the underwriting effectiveness of property and casualty insurance is a key indicator of interest. In 2025, China Pacific Property & Casualty achieved an underwriting profit of 12.443 billion yuan, a year-on-year increase of 75.6%. The combined cost ratio stood at 97.6%, a year-on-year improvement of 0.9 percentage points, which is also the best level since the group was listed in A-shares in 2018. However, compared to the 96.1% combined cost ratio in the first three quarters, the cost ratio in the fourth quarter rose significantly.

Among the main insurance products of China Pacific Property & Casualty, auto insurance contributed nearly 60% of the insurance service income, achieving an insurance service income of 305.335 billion yuan, a year-on-year increase of 3.6%. The combined cost ratio for auto insurance was 95.3%, a year-on-year improvement of 1.5 percentage points; the underwriting profit for auto insurance reached 14.258 billion yuan, a year-on-year increase of 53.6%. Other insurance products, such as accident and health insurance, achieved underwriting profits 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 Pacific Insurance and secretary of the party committee of China Pacific Property & Casualty, stated at the press conference that under normal conditions, the combined cost ratio of auto insurance in 2026 is expected to remain basically stable compared to 2025, and non-auto insurance is expected to achieve underwriting profitability, with overall underwriting profits maintaining stable growth. In the coming years, the combined cost ratio is expected to remain stable and continue to lead the industry.

He introduced that China Pacific Insurance anticipates that the effects of “comprehensive governance” on non-auto insurance will first be reflected in the combined expense ratios of commercial property insurance, employer’s liability insurance, and occupational accident insurance, with these expense ratios expected to decrease by more than 2 percentage points year-on-year. Assuming other influencing factors remain consistent with the previous year, the company’s non-auto insurance combined cost ratio is expected to decrease year-on-year, achieving underwriting profitability.

(Source: Securities China)