While the industry sees a robust start to the year, Hetalife's spring has been notably chilly. The insurer, backed by shareholders from both Tencent and CITIC, recently disclosed its Q1 2026 solvency report. The data reveals a slight 2.79% year-over-year decline in insurance business revenue to 627 million yuan, ranking 48th among 57 non-listed life insurers. More concerning is the net loss of 112 million yuan, a widening from the 96 million yuan loss under the old accounting standards in the same period last year, placing it 7th from the bottom. Its investment performance also faltered, with an investment yield of -0.03%, ranking 4th lowest, and a comprehensive investment yield of just 0.18%. Notably, the quarter marked Hetalife's transition to new accounting standards.

This data paints a picture of a challenging operational start. In an industry recovery cycle, why did Hetalife's insurance revenue not grow but instead decline? With Chairman Hong Ning, a veteran with a Goldman Sachs partner background, at the helm for nearly four years, why has the investment side failed to show "investment bank-level" prowess, instead delivering negative returns? To answer these questions, one must look beyond the surface figures to the underlying logic of channels, products, and strategic asset-liability management.

**Premium Decline Against the Trend, Urgent Correction to New Business Value Data** The first quarter is a crucial period for life insurers. Many peers capitalized on high household savings rates for significant growth. The new business value (NBV), a key indicator of future profitability and growth potential, showed strong performance for many non-listed insurers in Q1. For instance, Haibao Life reported an NBV of 33.9094 million yuan, Ruitai Life 41.9194 million yuan, and Junlong Life 65.2182 million yuan.

Surprisingly, Hetalife's solvency report initially showed an NBV of only 1,137.63 yuan despite over 600 million yuan in premiums, an implausible figure suggesting a data entry error. Following media inquiry, Hetalife urgently corrected this metric. The revised report shows an NBV of 11.3763 million yuan for Q1.

Even with this correction, Hetalife's NBV remains significantly lower than its peers, indicating a stark contrast between high premium volume and low value output. This exposes deep-seated concerns about its business structure, channel efficiency, and strategic planning.

A singular and imbalanced channel structure limits Hetalife's expansion. Since its 2017 founding, Hetalife has branded itself as an "internet life insurer." This asset-light model initially helped it grow rapidly. Data shows its top-selling product in 2025, the Heta Xinying Whole Life Insurance, contributed 601 million yuan in premium growth primarily through internet channels.

However, over-reliance on third-party internet platforms is a double-edged sword. Stricter internet insurance regulations have driven up customer acquisition costs, making the old, extensive traffic monetization model unsustainable. Furthermore, internet channels typically sell low-premium, short-term policies with weak customer loyalty.

Critically, Hetalife has failed to build a strong traditional agency channel. In Q1, agency channel premiums accounted for less than a single-digit percentage of total signed premiums. While bancassurance accounted for 53.26% of signed premiums, the company lacks deep integration with bank branches. In the "peak season" battle requiring heavy human resources and deep channel penetration, Hetalife, lacking a strong offline "armored force," struggles against competitors' multi-channel synergy.

Consequently, Hetalife's new business margin suffered. This margin represents the net profit earned per unit of premium, reflecting product competitiveness and channel efficiency. In Q1, Hetalife's new business margin was only 2.49%, lower than Huagui Life (3.64%), which also has a strong internet focus, and significantly lower than similarly-sized Haibao Life (6.43%), Junlong Life (8.91%), and Ruitai Life (10.21%). Even Xiaokang Life (3.92%), ranking third from bottom in premium size, performed better.

The product portfolio lacks core differentiation. In an environment of declining interest rates and asset scarcity, product strength is no longer just about pricing but about offering comprehensive "protection + service + wealth planning" solutions. Historically, Hetalife's products have focused on highly cost-effective internet-simple policies or certain term/whole life insurance. 2025 annual report data shows that of its 2.57 billion yuan in premium income, over 1.7 billion yuan came from ordinary life insurance, accounting for 66.23%. Such products are easily replicated, trapping the company in price wars.

While the industry pushed participating and annuity insurance with tax benefits, elderly community access, or high-end medical add-ons in Q1, Hetalife's thin product matrix failed to address the needs of mid-to-high-end clients, putting pressure on premium scale.

The issues reflected in channels and products appear to be the main constraints behind Hetalife's lagging premium income and severely low new business value during the industry's favorable period.

**The Dual Pressures of Net Loss and Investment Underperformance** If the decline in insurance revenue represents the eruption of accumulated liabilities-side issues, the over-100-million-yuan net loss and negative investment yield point to deeper hidden risks in asset management and corporate governance.

Two core drivers are at play: the transition to new accounting standards amplified unrealized losses on underlying assets, and the investment strategy led by Chairman Hong Ning may have deviated in direction.

Hetalife's switch to the new financial instrument standard (IFRS 9) in Q1 is a direct factor behind the seemingly "avalanche" in net loss. Under the old standard, insurers' large holdings of bonds and non-standard assets were often measured at amortized cost; market price declines not triggering default did not directly impact the profit and loss statement. However, IFRS 9 introduces a stricter "expected credit loss" (ECL) model and requires most equity investments to be measured at fair value through profit or loss.

This means that against the backdrop of capital market volatility and interest rate curve fluctuations in Q1, previously "hidden" unrealized losses in Hetalife's asset pool were forcibly brought to light. If the credit rating of underlying assets (like certain credit bonds or non-standard products) is slightly adjusted, the new standard requires the company to provision significant credit impairment losses upfront, directly eroding current net profit.

From this perspective, the 112 million yuan loss is not entirely a "fresh" operational loss for Q1 but largely reflects historical asset quality issues exposed by the "dissecting scalpel" of the new accounting standard.

However, attributing the loss entirely to the accounting change is overly simplistic. Another important reason is the deterioration of Hetalife's absolute return capability on the investment side. Its -0.03% investment yield in Q1 ranks 4th from the bottom industry-wide.

For comparison, leading listed insurers like China Life, Ping An, and New China Life maintained positive investment yields in the same period, even if growth slowed. Among non-listed insurers, only a few, including Hetalife, Zhonghua Life, and Xingfu Life, reported negative yields.

This brings the focus to the company's "helmsman," Chairman Hong Ning. With a background as a Goldman Sachs global partner and chairman of Greater China Investment Banking, Hong Ning took the helm at Hetalife in July 2022. At the time, the company was mired in consecutive annual losses and shareholder disputes. The market held high hopes that this leader with top-tier international investment bank experience would reshape Hetalife's investment landscape with Wall Street sophistication.

But the reality has fallen short of expectations. As of Q1 2026, nearly four years into Hong Ning's tenure, not only has the company failed to emerge from losses, but the investment side has become a drag on performance. The logic behind this stark contrast warrants deeper thought.

**Why Does Investment Performance Remain Under Pressure Under Veteran Banker Hong Ning?** Analysis suggests three levels of reasons for the underperformance of Hetalife's investment side under Chairman Hong Ning's leadership:

First, a mismatch in investment logic. Hong Ning's extensive investment banking experience centers on "pursuing high growth and capital games." However, the core principles of insurance fund investment are "absolute return, duration matching, and safety margin." The investment logics of these two fields are entirely different.

Hetalife's recent investment activities suggest a preference for using insurance funds for primary market equity investments or participating in strategic placements of new shares to chase high returns. For example, the company participated in strategic placements for IPOs like Huadian New Energy and Xi'an Eswin Material Technology on the STAR Market and main board, and ventured into warehousing logistics REITs.

While these projects align with national policies for "technology finance" and "green finance," from a short-term financial return perspective, such equity assets face drawdown risks during market volatility. For a small-to-medium insurer with consecutive annual losses urgently needing investment returns to strengthen its balance sheet, this investment structure, which may prioritize financial assets over tangible assets and overlook short-term liquidity risks, clearly requires further refinement.

Second, a lack of defensive asset allocation and a heavy historical burden. In the Q1 environment of declining interest rates and pressure on fixed-income asset valuations, Hetalife did not build a sufficient defensive asset buffer. Its past investment track record shows the company has suffered from aggressive styles—it previously encountered risks multiple times by investing in products related to the "Baoneng Group," leaving significant risk exposure.

While the company now claims that 100% of its non-standard assets are of high credit grade, the negative investment yield under the new standard in Q1 also proves, to some extent, that Hetalife's existing asset pool still contains "zombie assets" that struggle to generate positive cash flow or equity assets in an unrealized loss position.

Third, a disconnect between macro judgment and market timing. In Q1 2026, the bond market experienced significant adjustments; holding a portfolio tilted towards long-duration interest rate bonds would face substantial market value shrinkage. Simultaneously, the structural trends in the stock market increased the difficulty of managing equity positions. This was a common challenge for the entire industry.

However, in this environment, several peers in the small-to-medium insurer tier managed to achieve better returns through flexible tactical trading and dividend enhancement strategies. For instance, Xiaokang Life led this tier in Q1 with a 1.97% investment yield and 1.88% comprehensive investment yield. Its winning strategy was a forward-looking focus on dividend enhancement—increasing allocations early in the year to undervalued, high-dividend blue-chip stocks in sectors like banking and utilities. During the Q1 stock market's structural trends, these high-dividend assets not only effectively hedged against market value volatility but also significantly boosted the safety cushion and absolute return of the overall investment portfolio through real cash dividends.

From this perspective, Hetalife's investment team, under Hong Ning's leadership, may have failed to timely optimize the underlying structure of major asset classes and grasp the timing of allocations. Both fixed-income and equity investments were more or less affected by market fluctuations, putting pressure on the investment yield.

In summary, the operational pressure Hetalife faced in Q1 2026 is a concentrated reflection of the deepening transformation phase in the life insurance industry combined with the company's own developmental stage characteristics. This is not merely a technical reflection of the accounting standard change but also indicates that the company is undergoing a critical磨合 and adjustment period in liabilities-side channel development, product structure optimization, and asset-side macro allocation strategy.

Facing the current market environment, Hetalife urgently needs a thorough internal and external strategic review and an upgrade in精细化管理. It must consolidate existing advantages while addressing shortcomings in macroeconomic研判 and long-term asset-liability matching to regain its footing in future industry competition.