Shares of The People's Insurance Company (Group) Of China Limited surged 6.17% today, leading the insurance sector higher. The company recently released its half-year results, reporting insurance service revenue of RMB 286.873 billion, up 2.4% year-on-year. Net profit reached RMB 49.812 billion, a 38.8% increase, while net profit attributable to parent shareholders rose 38.5% to RMB 36.745 billion.

Beneath the impressive headline figures, the divergence between the property and casualty (P&C) and life insurance businesses remains stark. As the undisputed leader in P&C insurance, the company continued to shine, with the comprehensive cost ratio for auto insurance hitting a decade-low. Meanwhile, the life insurance segment continued to underperform, with its previously dominant bancassurance channel contracting across the board.

In the Hong Kong market, PICC Property and Casualty Company Ltd (02328.HK) holds a market capitalization of HKD 385.9 billion, whereas The People'S Insurance Company (Group) Of China Limited (01339.HK) is valued at only HKD 262.4 billion, a gap of HKD 123.5 billion. Notably, the life and health insurance arms are not just failing to add positive market value for the group—they have become active detriments.

Where the P&C business outperforms

The group's operations are divided into four segments: P&C, life, health, and investment. In the first half of this year, the P&C arm reported original insurance premium income of RMB 327.529 billion, up 1.3% year-on-year, capturing a 33.3% share of the property insurance market. Insurance service revenue for the segment grew 2.2% to RMB 254.617 billion, while underwriting profit rose 19.8% to RMB 14.01 billion. The comprehensive cost ratio improved by 0.8 percentage points year-on-year to 94.5%, and net profit climbed 33.2% to RMB 31.248 billion.

P&C insurance remains the primary profit driver, contributing 88.76% of the group's total insurance service revenue. The auto insurance business maintained steady growth, with insurance service revenue of RMB 153.168 billion, up 1.9%. The comprehensive cost ratio for motor vehicles fell 0.7 percentage points to 93.5%, while underwriting profit increased 13.6% to RMB 9.917 billion.

The company's auto insurance premium income reached RMB 144.227 billion in the first half, up just 0.1% year-on-year—the weakest growth in recent years. However, given that industry-wide auto premiums have largely stalled, this performance is considered acceptable. The 93.5% comprehensive cost ratio for auto insurance represents a ten-year low.

Accident and health insurance generated insurance service revenue of RMB 35.251 billion, up 13.8%, with a comprehensive cost ratio of 99%—down 2.8 percentage points—and underwriting profit of RMB 362 million. Agricultural insurance contributed RMB 21.406 billion in service revenue, with an underwriting profit of RMB 268 million. Liability insurance delivered RMB 20.144 billion in service revenue, up 8.4%, but posted the only underwriting loss in the P&C segment at RMB 628 million, despite its comprehensive cost ratio improving 0.5 percentage points to 103.1%.

Clearly, the P&C division continues to demonstrate exceptional performance.

Challenges in the life insurance and bancassurance channels

In the first half, life insurance premium income fell 5.9% year-on-year to RMB 85.156 billion, making it the only listed insurer to record a decline. New business premiums dropped 23.78% to RMB 31.45 billion, with regular premiums particularly hard hit, falling 24.63% to RMB 17.393 billion. The main culprit behind these deteriorating figures was a broad decline in bancassurance channel premium income.

Bancassurance premiums totaled RMB 46.159 billion, down 13.1% year-on-year, with new business from this channel plunging 35.95% to RMB 19.007 billion. While bancassurance has historically been the primary distribution channel for the life arm, its share is now gradually shrinking as the agency channel gains ground, narrowing the gap between the two.

The agency channel generated RMB 37.122 billion in premiums, up 4.8% year-on-year. It achieved new business value of RMB 2.521 billion in the half, up 23.4% on a comparable basis, with first-year regular premiums for ten years or longer surging 93.7% to RMB 1.75 billion. By contrast, bancassurance new business value fell 10% to RMB 2.633 billion.

Health insurance expansion and initiatives

The health insurance arm reported premium income of RMB 45.55 billion, up 12%, with insurance service revenue of RMB 16.717 billion, up 7.1%, and net profit of RMB 5.147 billion. Contract service margin balance stood at RMB 25.235 billion, up 7.7% from the start of the year. The drugstore initiative was launched in Wuhan, Hubei, with co-branded partnerships with ten rehabilitation hospitals, offering rehabilitation experiences targeting the elderly, corporate employees, and those with occupational injuries or diseases.

Health management services generated nearly RMB 200 million in revenue in the first half, up 17.4%, serving 5.4 million people, an increase of 12.4%. The president of the health arm stated that the company has defined four strategic positions: a major health services platform, a core risk-reduction support platform for the insurance business, an operating platform for integrating medicine, pharma, and insurance, and a top-tier domestic professional health management service provider. Looking ahead, the company will continue to integrate internal and external resources, enhance the health ecosystem, accelerate drugstore operations, build a dual-track online-offline pharmacy model, streamline special drug claim direct payment services, and focus on expanding drug purchase scenarios for specialty drugs, outpatient insurance, and medical funds.

Strategic equity reductions lock in substantial gains

As of the end of June, the group's total investment assets stood at RMB 1.997723 trillion, with fixed-income investments accounting for 63.69% at RMB 1.272416 trillion. Funds and equities combined totaled RMB 308.712 billion, or 15.45% of the portfolio, representing an increase of RMB 55.206 billion, or 21.78%, compared to the end of 2025.

Total investment income for the first half reached RMB 66.327 billion, up 59.91% year-on-year, while net investment income rose 0.71% to RMB 30.539 billion. Dividend income from equity investments climbed 35.62% to RMB 4.843 billion, and gains from disposal of financial instruments surged 389.21% to RMB 21.085 billion. These figures indicate that the company significantly reduced or exited certain equity positions during the period, locking in substantial profits.

Conversely, gains from fixed-income disposals fell sharply to RMB 600 million, suggesting the company is holding onto its high-yield bonds, keeping them as stable core holdings on its books. The vice president noted that the company invested in ChangXin Memory Technologies in 2021, which successfully listed on the STAR Market on July 27 of this year. Based on the closing price on its debut day, the early-stage investment has returned over 20 times, validating the company's strategy of long-term value investing and deep engagement in the real economy while delivering significant financial gains.