A Perspective on the Annual Reports of the Big Five Insurance Companies: How to Add Value through Equity Investments

Xue Jin China Securities Journal

The annual reports season for A-share insurance stocks has come to an end. A horizontal review of the investment performance of the five largest insurers in 2025 shows that, in a low-interest-rate environment, “seeking returns from equities” has moved from slogan and vision to reality. Based on the 2025 performance reports of various insurers, China Life, China Property & Casualty Insurance, New China Life, China Taiping, and Ping An together achieved attributable net profit of more than RMB 420 billion, up more than 20% year over year. Looking at the profit breakdown, investment income—especially the contribution from equity investments—should not be underestimated. At the same time, all insurers are adding to their positions in equities: on the one hand by increasing investment scale and the allocation ratio, and on the other by upgrading investment strategies and evolving toward more refined management.

Several insurers’ management teams said they will attach great importance to the allocation value and strategic significance of equity-type assets within the overall investment portfolio, actively respond to the policy direction for long-term capital to enter the market, and step up efforts to embrace the equity market. Meanwhile, based on their own asset-liability management needs and changes in the market environment, they will take overall account of the timing and scale of equity-type asset allocation, and enhance the resilience and the sustainability of investment returns through diversified and multi-pronged strategies.

Raising equity exposure

In a low-interest-rate environment, the biggest portion of insurers’ funds—fixed-income assets—cannot generate enough yield to cover liability costs, making increasing allocations to equity-type assets a must. One core change in insurers’ fund investments highlighted by the 2025 annual reports is adding to equity-type assets. In the eyes of industry insiders, this is both the result of regulatory guidance and a choice aligned with market trends.

From the data, the equity investments of the five insurers not only grew in scale but also increased their share within the portfolios. By the end of 2025, the five insurers’ total investable assets exceeded RMB 20 trillion. Of this, stock investments were RMB 2.5 trillion, up more than RMB 1 trillion from the end of 2024—an increase of as much as 75%. The proportion of stock assets in investable assets also rose from 7.8% to 12.2%, up 4.4 percentage points.

If equity fund investments are added on top, the trend of adding to equities becomes even more pronounced. For example, China Life’s publicly disclosed market equity investment scale exceeded RMB 1.2 trillion, and its allocation ratio rose by nearly 5 percentage points; Ping An’s stock and equity fund investment balance was RMB 1.24 trillion, with its allocation ratio increasing by 9.3 percentage points to 19.2%.

As the 2025 capital market warmed up, it brought relatively rich returns to insurers’ adding to equity exposure, opening up a favorable window for profit and also providing upside flexibility for performance—multiple insurers’ total investment yield reached new highs in recent years, with New China Life at 6.6% and China Life at around 6.1%.

Zhao Peng, President of China Property & Casualty Insurance, said that in 2025 China Property & Casualty Insurance net added more than RMB 40 billion to A-shares, and its share of equities in the secondary market increased by 4.3 percentage points to 13.3%, with investment in stocks and funds rising to more than RMB 200k. The company’s TPL (equity-type stocks and funds’ combined yield with fair value changes recognized in current profit or loss) comprehensive yield was 30.4%, while its OCI (equity-type stocks with fair value changes recognized in other comprehensive income) comprehensive yield was 19.2%.

“During periods when the market was sluggish, we laid out positions against the trend. In 2025, we strategically increased the equity proportion by nearly 5 percentage points. In particular, we focused on technology stocks that represent the direction of China’s new quality productive forces. The key reason for the performance improvement is that the investment follows historical trends and keeps pace with the tide of the times,” said Liu Hui, Vice President of China Life. “In 2025’s equity investments, we captured structural opportunities in the market, seized the main uptrend of the growth style, and the TPL equity combined investment yield was nearly 30%.”

More refined management of equity investments

Given the increasingly complex market environment, several insurers’ management teams believe that in the future, equity investments still need to adapt to circumstances and be managed more precisely.

“Equity investment is the decisive hand for stabilizing and improving investment performance. We will adhere to making steady progress and continue to focus on the allocation of OCI high-dividend stocks. At the same time, we will center on the growth opportunities embedded in the ‘15th Five-Year Plan and 15th Five-Year Plan Outline’ and strengthen research into key industries and key industrial areas, rationally plan the allocation of TPL stocks, and build a long-term equity investment portfolio that is steady in performance, competitive in the market, and more balanced.” Regarding the direction of equity investment ahead, Cai Zhiwei, Vice President of China Property & Casualty Insurance, said.

“We will effectively increase the proportion of equity investments in the public market.” Su Gang, Vice President of China Taiping, said that China Taiping will in the long run stick to a dividend-value core strategy, focusing on listed companies that have both relatively strong dividend distribution capability and a stable growth outlook, and using such high-quality assets as the core of its strategic baseline holdings. At the same time, it will strengthen the overall drawdown-resistance level of the equity investment portfolio and build a more comprehensive satellite strategy system covering multiple key areas such as technology innovation, healthy aging, and big consumer sectors.

Guo Xiaotao, Co-CEO of Ping An, said that Ping An’s core investment thinking this year is “finding certainty amid uncertainty.” “For long-cycle patient capital, the most important thing in investing is to align with the direction of the nation’s economic development,” he said. He noted that factors such as new quality productive forces, infrastructure, medical and healthcare for healthy aging, a strong financial system, and Healthy China are all sources of certainty—these are important directions for Ping An’s long-term allocation.

“By means of scientific large-class asset allocation and diversified investments, we reduce the portfolio’s overall sensitivity to volatility in a single market. We make appropriate use of the asset classification mechanism under the new financial instruments standards and properly manage the impact of fair value volatility of equity-type assets on the income statement,” Chen Yijiang, President of Xinhua Asset Management, said. “We will actively create excess returns by selecting excellent external asset managers, fully leverage the power of market-oriented mechanisms to diversify risk, and reduce the impact of volatility from single strategies. We will focus on enhancing multiple research-and-investment (投研) capabilities, and strive to obtain excess returns in periods of volatility through active management.”

Steady progress while maintaining balance

Insurers’ funds are stepping up efforts to embrace the equity market. Meanwhile, against the backdrop of new accounting standards amplifying the effect of profit volatility, they are trying to mitigate the impact of capital market volatility on the income statement through strategies such as diversified instruments and diversified allocation. Several insurers’ management teams said that they need to broaden the types of assets and enrich investment strategies to enhance the portfolio’s overall ability to generate returns and its resilience.

Liu Hui said, “For alternative investments, equity investments, and the like, the company has always placed great importance on them. Over the past two years, our alternative investments have mainly been distributed in debt-type financial products. At the same time, we also participate in investments in equities and private funds, as well as investments in REITs, ABS, and the like. Alternative investment is an important tool for the company to respond to the challenges of the overall low-interest-rate environment. The company will continue to enhance its ability in alternative investment so that it plays a more important role in the investment portfolio.”

“In 2026, we will continue to intensify the development and allocation of innovative alternative products such as asset securitization, and we will take the already established and planned private equity funds at the China Property & Casualty Insurance Group as our starting point. We will focus on areas related to the nation’s key strategies and the development of insurance business, and proactively seize investment opportunities embedded in the construction of strategic emerging industries and the modern industrial system,” Cai Zhiwei said.

Chen Yijiang said that New China Life will continue to step up efforts in diversified asset allocation. The long-term investment nature of insurance funds naturally aligns with asset categories such as alternative investments and equity investments. The company will actively leverage its advantage as patient capital to serve national strategies and the development of the real economy, while sharing the long-term investment returns brought by economic transformation and upgrading. Diversified allocation helps reduce correlations among different asset types, improve the risk-return profile of the portfolio, and enhance the sustainability and stability of investment performance.

(Editor: Qian Xiaorui)

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