Listed insurance companies' investment accounts: increasing allocation to equity assets, focusing on technological frontiers

Ask AI · How do the new accounting standards affect quarterly profit volatility for insurance companies?

Zhongjing reporter Chen Jingjing, reporting from Beijing

Recently, China Life (601628.SH), China Ping An (601318.SH), PICC (601319.SH), China Taiping (601601.SH), and New China Insurance (601336.SH)—five A-share listed insurers—have released their 2025 “report cards,” with core profit indicators rising across the board.

By the end of 2025, the five listed insurers’ net profit attributable to shareholders totaled about CNY 4,252.91 billion, up 22.4% year over year, with their profitability scale continuing to grow; their total investment assets totaled about CNY 20.7 trillion, up 12.8%, with growth rates all above 10%; and the total amount of stock investments totaled about CNY 2.51 trillion, up 75% year over year.

《China Business Journal》 reporters learned that in 2025, the five listed insurers optimized their asset allocation, significantly increased their allocation to equity assets, seized opportunities in the capital markets, and saw investment returns substantially bolster results, lifting overall performance to a new level. However, behind the high growth in overall performance, quarter-by-quarter volatility is also being amplified. Under the new accounting standards, changes in equity assets are transmitted to the income statement in real time; some insurers saw single-quarter losses in the fourth quarter, drawing market attention.

Multiple non-bank industry analysts told reporters that quarterly net profits show a clear split, directly reflecting each company’s choice of investment strategy under complex market conditions and the deeper impact of the new accounting standards.

Investment returns drive profit

In 2025, listed insurers saw a year of strong profitability. Judging from net profit attributable to shareholders, China Life led with CNY 1,540.78 billion, up 44.1%; China Ping An followed with CNY 1,347.78 billion, up 6.5%; China Taiping, PICC, and New China Insurance were CNY 535.05 billion, CNY 466.46 billion, and CNY 362.84 billion, respectively, with year-on-year increases of 19%, 8.8%, and 38.3% in sequence.

Notably, looking at the reasons disclosed in each company’s earnings reports, investment returns have become the core engine driving growth in net profit. In 2025, the investment return rates of the five listed insurers all improved year over year. Among them, New China Insurance’s total investment return rate was the highest, reaching 6.6%, up 0.8 percentage points year over year, setting the highest level in recent years; full-year investment returns were about CNY 1,043 billion, up 30.9% year over year. China Life’s total investment return rate increased by 0.59 percentage points to 6.09%. China Taiping and PICC each rose by 0.1 percentage points to 5.7%. China Ping An disclosed its comprehensive investment return rate, which increased by 0.5 percentage points to 6.3%.

Behind the rise in investment return rates is also an important result of insurers stepping up their pace of entering the market. By the end of 2025, the stock investment allocation ratios of China Life, China Ping An, PICC, China Taiping, and New China Insurance were all higher than those at the end of 2024.

According to the earnings reports, comparing stock investment allocation ratios at the end of 2024 and at the end of 2025, China Ping An rose from 7.6% to 14.8%, New China Insurance rose from 11.1% to 11.8%, China Life rose from 7.58% to 11.25%, China Taiping rose from 9.3% to 11.1%, and PICC rose from 3.7% to 8.7%.

At an earnings meeting, Liu Hui, vice president and secretary to the board of China Life, said that in 2025 China Life steadily carried out high-dividend stock allocation, strategically increasing the equity proportion by nearly 5 percentage points. The scale of its equity investments exceeded CNY 1.2 trillion, and it focused on technology-related stock investments representing the direction of China’s new-quality productive forces.

PICC vice president Cai Zhihui said that in 2025, the scale of PICC’s OCI (fair value changes recognized in other comprehensive income) stock investments increased by 158% compared with the beginning of the year, and its share in investment assets rose by 2 percentage points. The average dividend yield of the OCI stocks it held reached 4.27%, further adding to the contribution of dividend income to net investment returns, while further strengthening the long-term orientation of equity investments. It also innovatively established a strategic stock investment portfolio, with a full-year net asset value growth rate of over 40%.

Multiple factors affect single-quarter net profit

It should be noted that although listed insurers benefit from investment returns, capital market volatility is also relatively high, which can lead to fluctuations in listed insurers’ single-quarter profit performance.

Wind data shows that in the fourth quarter of 2025, the CSI 300 Index fell by 0.23%, the ChiNext Index fell by 1.08%, the Hang Seng Index fell by 4.56%, and the Hang Seng China Enterprises Index fell by 6.72%. As a result, some listed insurers’ fourth-quarter net profits were negative.

At the earnings meeting, China Life President Li Mingguang said that currently, most investment assets and insurance contract liabilities of life insurers must be measured based on current market values. Changes in market value may be reflected in the income statement or in the balance sheet. It is normal—and a common occurrence—for net profit and net assets to fluctuate with changes in market value. China Life’s profit was negative in the fourth quarter of 2025 mainly because there was a structural adjustment in the capital markets, and some of the stocks and funds it held saw a pullback in the fourth quarter of 2025. Much of this volatility is phased, reflecting changes in the capital markets, and is a normal phenomenon.

Regarding the issue that different insurers show different single-quarter profit performance, multiple people in the industry told reporters that the key difference lies in how equity assets are classified and the investment structure under the new accounting standards.

Generally speaking, stock assets invested by insurers are usually divided into two categories: one is FVOCI (measured at fair value with changes recognized in other comprehensive income). For this type of asset, gains and losses are not recorded in profit; the other is FVTPL (measured at fair value with changes recognized in profit or loss for the period). For this type of asset, gains and losses are recorded in profit.

A non-bank analyst from Changjiang Securities told reporters that under the new insurance contract accounting standards, the classification of financial assets has a significant impact on the income statement. If the proportion of FVTPL is high in stock investments, the impact of unrealized gains and losses of stocks on current-period profit is relatively large. This structure enables insurance companies to enjoy investment returns more fully when the stock market rises, but it also amplifies risk when the market falls, increasing performance volatility. By allocating more assets to FVOCI, short-term volatility can be smoothed.

Ge Yuxiang, Chief Non-bank Financial Analyst at Zhongtai Securities, publicly stated that according to statistics, as of the end of 2025, the stock balances within the total FVOCI equity instruments of China Ping An, China Life, China Taiping, New China Insurance, PICC, and others were about CNY 1.08 trillion, up about 114.3% from the end of 2024. FVOCI accounted for nearly 40% of stock investment, up from 32.27% at the end of 2024.

At the earnings release, Fu Xin, vice president and chief financial officer of China Ping An, said that 57% of China Ping An’s stock classifications are FVTOCI. They contributed unrealized pre-tax gains of over CNY 90 billion, not included in profit, directly increasing net assets. Stocks classified as FVTPL accounted for 43%, capturing opportunities from high-growth stocks.

Li Jian, Chief Non-bank Analyst at Huatai Securities, analyzed that OCI stock price volatility does not show up in the income statement, but its dividend income can be recognized in the income statement; therefore, it can support insurers’ performance. Especially when the market declines, OCI stocks are mostly dividend-value stocks and thus have a certain degree of resilience. At the same time, dividends bring strong returns.

Focus on opportunities in high-growth industries

Entering 2026, capital market volatility will continue. In such an environment, how will listed insurers allocate assets?

At the earnings release, Qin Hongbo, deputy general manager of New China Insurance, said that it is expected that the interest-rate market trend in 2026 will continue to present a volatile pattern in the near term, with credit spreads narrowing and term spreads widening. Specifically, liquidity in the short end is relatively more relaxed with stronger certainty, but volatility in ultra-long-dated bonds may increase, and the interest-rate trends between the short end and the long end will diverge. Therefore, in a low-interest-rate era, to achieve relatively reasonable returns on fixed-income investments, it is necessary to grasp the interest-rate trend and capture structural opportunities.

For equity-market allocation, Qin Hongbo further said that New China Insurance is firmly optimistic about the long-term development prospects of China’s capital market. It will focus on three investment main lines: first, industries where conditions improve and performance continues to be optimized; second, industries aligned with national strategic directions, especially areas related to new-quality productive forces; third, continuously promoting a high-dividend investment strategy in a low-interest-rate environment.

Cai Zhihui said that for fixed-income investment, in 2026 PICC will, based on the differing characteristics of liability funds between property insurance and life insurance, do a good job in sub-accounting, differentiated allocation, and refined management. Specifically, for the property insurance account, emphasis will be placed on maintaining stable asset duration; for the life insurance account, it will manage the duration gap, so it will particularly pay attention to the allocation window for long-duration government bonds. For equity investment, on the one hand, it will continue to focus on allocating to OCI high-dividend stocks; on the other hand, it will focus on growth-oriented investment opportunities embedded in the “15th Five-Year Plan” and the “next 5-year” period, strengthen research into key industries and key segments of the industrial chain, and rationally plan TPL stock allocation.

Liu Hui introduced that for equity investment, China Life will focus on two categories of assets: first, technology stocks representing the direction of China’s new-quality productive forces; second, high-quality high-dividend stocks. For the equity investment direction during the “15th Five-Year Plan” period, it will follow the deployment to cultivate and strengthen emerging industries and to take a forward-looking stance on future industries. It will continue to use diversified tools such as merger and acquisition funds, PE funds, and S funds, focusing on three major directions: first, artificial intelligence and semiconductors—closely tracking the themes of technological iteration and domestic substitution to identify investment targets with explosive growth opportunities across the entire AI industry chain; second, health and biotechnology—investing in innovative drugs and medical devices, intelligent diagnosis and treatment, chronic disease management, and other related fields; third, green energy and new infrastructure—deeply cultivating clean-energy sectors such as wind power and nuclear power, and paying attention to investment opportunities such as new-type energy storage and computing-power synergy.