China's insurance industry, under the policy guidance of the 2024 version of the "National Ten Articles," has accelerated its transformation toward high-quality development centered on value creation. The sector has spent nearly two years completing an initial reconstruction of its development logic. However, in the first half of 2026, this transformation entered a substantive stress-testing period.

This pressure stems from a confluence of multiple factors: first, low interest rates combined with the full implementation of the new insurance contract standards have intensified the impact of interest rate fluctuations on both the asset and liability sides; second, the implementation of the second phase of the "C-ROSS" framework has further tightened capital constraints; third, on the liability side, the deepening of the "unified reporting and pricing" policy, the lowering of participating policy illustrative rates, and the expansion of the negative product list have continuously increased pressure across fees, costs, and products. Amidst such industry changes, SUNSHINE INS (06963), which has delivered steady results, serves as a noteworthy sample for observation. According to the company's 2026 interim financial report released on August 28, during the reporting period, SUNSHINE INS's total premium income reached RMB 90.906 billion, a year-on-year increase of 12.5%; net profit attributable to shareholders was RMB 4.694 billion, a year-on-year increase of 38.5%; the group's embedded value stood at RMB 124.93 billion, up 7.2% from the end of the previous year; and total assets reached RMB 702.834 billion, a year-on-year increase of 4.4%. The achievement of these interim results stems from SUNSHINE INS's keen insight into industry trends and its proactive early planning. The company has actively internalized external regulatory guidance into its own operational strategies, continuously advancing the "New Sunshine" strategy. This has demonstrated strategic resolve and operational resilience in the face of multiple industry pressures, stabilizing its core business and opening up space for future value release and structural optimization, which may lead to a revaluation of its standing in the capital markets.

Channel Transformation Demonstrates Life Insurance Resilience, Actuarial Technology Runs Through the Entire P&C Insurance Chain

Since 2026, compliance regulation in the insurance industry has continued to escalate, with multiple documents successively issued to standardize industry development. Notably, in March, the Life Insurance Regulatory Department of the National Financial Regulatory Administration issued the "Notice on Further Strengthening the Management of Bank Agency Channel Fee-Related Matters" (Jin Shou Xian Han [2026] No. 65), which was fully implemented on July 1. As a further deepening of the bank-insurance "unified reporting and pricing" policy from August 2023, Document No. 65 upgrades fee control from "managing total commissions" to "managing fee structures," aiming to eliminate the inflated portions of actual fees rather than allowing them to move from the visible to the hidden. Under these constraints, the industry's channel logic has undergone a substantive shift: the bancassurance channel has moved from "competing on handling fees" to "competing on value rates, service capabilities, and deep integration with bank ecosystems"; the individual agency channel has shifted from a "manpower-intensive strategy" to a focus on "team quality," mitigating scale contraction by enhancing the productivity of core agents.

In this accelerated shift of industry logic, SUNSHINE INS, as a mid-sized listed insurer that started its channel transformation relatively early, had already demonstrated notable development resilience during the standardized promotion phase of the "unified reporting and pricing" policy in 2025. Against the backdrop of further deepening of the policy in the first half of 2026, the company's response strategy and operational performance hold typical observational value. During the reporting period, Sunshine Life adhered to a strategy of "dual focus on individual and bancassurance channels," matching customer group needs with differentiated models; Sunshine P&C Insurance used its "life table project" as a core lever to enhance risk pricing and cost management capabilities. This enabled the company to demonstrate strong proactiveness in responding to the current round of regulatory deepening.

Specifically, the individual agency channel firmly advanced its high-quality development transformation, deepened the "One Body, Two Wings" strategy, strengthened customer operations capabilities, implemented the standardized "Five-Step Customer Management Method" workflow, upgraded the tiered management and development system for agents, and improved operational efficiency. The per-agent monthly productivity in the individual agency channel reached RMB 37,000, a year-on-year increase of 31.3%. Following the notable improvement in per-agent productivity, the individual agency channel's total premium income for the reporting period reached RMB 18.52 billion, up 20.7% year-on-year, with new single premium payments amounting to RMB 4.62 billion, a year-on-year increase of 60.0%.

Meanwhile, the bancassurance business anchored its focus on the value mainline. On the channel front, it consolidated advantageous channels, expanded new strategic channels, and deepened the co-construction of outlets and team ecosystems; on the team front, it optimized quality and implemented tiered management; on the product and service front, it perfected a full-category, multi-tiered product and service matrix. In the first half, bancassurance total premiums reached RMB 44.68 billion, up 26.1% year-on-year; among which, new single policy scale premiums hit RMB 23.61 billion, a year-on-year increase of 83.4%, with per-agent monthly productivity reaching RMB 154,000.

On the P&C insurance front, SUNSHINE INS employs its "three life tables" as the core, integrating precise pricing and resource allocation capabilities across auto insurance, non-auto insurance, and agricultural insurance segments. This drives the business transformation from a "scale-driven" model to one focused on "risk screening, structural optimization, and value creation." The essence of this arrangement is upgrading actuarial technology into a full-chain capability that runs through P&C products, channels, claims, and services. During the reporting period, P&C original premiums (excluding guarantee insurance) reached RMB 24.012 billion, up 5.3% year-on-year, with net profit of RMB 800 million, a year-on-year increase of 55.1%. The auto insurance structure also continued to optimize, with the premium proportion from family-use vehicles and new energy vehicles on the rise.

Building an "Anti-Fragile" Asset Allocation System, Accelerating Asset-Liability Linkage Initiatives

The deepening of the "unified reporting and pricing" policy has not only impacted the channel side but also affects the profit side. The rigid constraints on the expense side directly cut off fee-based profits as a source of earnings. Combined with other pressures—such as the spread loss risk brought by the current low-interest-rate environment, the full implementation of new accounting standards amplifying the impact of asset volatility on profits, and the hard capital constraints imposed on alternative investments by the second phase of the C-ROSS framework—the expansion of the liability side can no longer mask weaknesses on the asset side. "Asset-liability linkage management" has shifted from a strategic slogan to a hard constraint tied to survival. Facing this pressure, the response logic of Sunshine Asset Management has not been passive defense. Instead, with asset-liability matching as its core, it has built an "anti-fragile" asset allocation system. On one end, long-duration government bonds lock in a spread safety cushion, while the amortized cost method and high-dividend OCI assets smooth profit fluctuations under the new standards. On the other end, counter-cyclical primary market allocations and reserves for new quality productive forces expand the income boundary while controlling drawdowns.

This three-layer structure—"fixed income as a foundation to match liabilities, equities to enhance returns and hedge inflation, and accounting classification to manage volatility"—essentially finds a dynamic optimal solution between capital constraints and return targets. Based on this "anti-fragile" asset allocation system, in the first half of 2026, SUNSHINE INS's total asset management scale reached RMB 667.76 billion, up 4.3% from the end of the previous year; total investment income of RMB 12.43 billion was realized, a year-on-year increase of 16.2%. Furthermore, Sunshine Asset Management's capabilities have surpassed merely "managing its own funds," evolving into a market-oriented asset management platform. Its multi-asset, multi-strategy system drives resilient growth in third-party business. With four consecutive years ranked in the IPE Global Top 500 (250th globally and 50th in China in 2026), this underscores that its asset management capabilities have achieved an industry stance capable of exporting value externally. During the reporting period, the scale of entrusted third-party assets under management reached RMB 191.015 billion. Meanwhile, the company's debt-related business is deeply embedded in national strategies such as the Beijing-Tianjin-Hebei coordinated development, advanced manufacturing, and the Belt and Road Initiative, generating long-term stable returns while elevating insurance funds from mere "financial investors" to "patient capital for the real economy," establishing a unique coordinate for a mid-sized insurer in the financial sector's "five major articles."

Deepening Customer Lifecycle Demands to Build a Differentiated Advantage

As industry transformation and changes continue to deepen, the underlying logic of the sector is undergoing a fundamental shift. The inadequacy of the old "scale-driven" development path is becoming increasingly evident, and building long-term differentiated competitiveness under the new industry landscape has become a strategic imperative for mid-sized insurers' long-term development. In SUNSHINE INS's current results, the answer it provides is becoming increasingly clear: constructing a customer operations closed loop that synergizes "sales, products, and services." This is one of the key pillars supporting the company's stable growth even as the industry faces multiple pressures. During the reporting period, SUNSHINE INS, guided by precise insight and proactive satisfaction of customers' differentiated needs across their lifecycles, built a customer operations closed loop with coordinated sales, products, and services.

Specifically, Sunshine Life deepened its "Zhi Xin Sunshine" strategy: on the sales front, it enhances operations for mid-to-high-end customers; on the product front, it relies on the "Three-Five-Seven" system to cover "the elderly, the young, and high-net-worth individuals." For the elderly segment, it launched scenario-based products combining "annuities plus long-term care"; for the young segment, exclusive critical illness insurance; and for high-net-worth clients, it established an agile customization mechanism. On the service front, it continues to iterate health, elderly care, and education offerings, launching 22 new health services centrally, building a multi-tiered ecosystem matrix for elderly care, and providing full-process educational planning. Sunshine P&C Insurance upgraded its top-level customer operations design: on the individual customer front, teams are transitioning to become all-around insurance advisors, products are innovated around high-frequency scenarios such as travel and health, driving auto insurance customers toward comprehensive protection conversion, with claims robots online 24/7 and maintaining satisfaction scores above 9. On the group customer front, the "Partner Action" initiative has been implemented in depth, completing the iteration of the ABCD tiering system. Risk reduction services in segments such as hospitality, warehousing, and onshore wind power doubled in volume year-on-year, building a model of "online monitoring plus offline response." By deeply cultivating customers' full lifecycle needs, SUNSHINE INS converts one-time sales relationships into long-term customer value operations. This allows the company to build sustainable sources of mortality and expense gains on the liability side, and on the channel front, establish a differentiated advantage beyond fee competition. It thereby secures an advantageous position in the inevitable industry trend of shifting from "selling policies" to "selling full-lifecycle risk services."

Conclusion

SUNSHINE INS has proven through its steady performance that it possesses the capability to navigate cycles through its differentiated competitive advantages during the industry's painful transition toward high-quality development. This performance is prompting a reassessment of SUNSHINE INS's investment value in the capital markets, with several securities firms providing strong corroboration. Among them, Orient Securities noted that SUNSHINE INS's life insurance segment is driving rapid growth in new business and NBV through bancassurance, while its P&C core business is seeing improved underwriting profitability, with investment asset expansion and increased equity allocation enhancing earnings elasticity. Based on expectations of continued fundamental improvement, Orient Securities has assigned a "Buy" rating to SUNSHINE INS with a target price of HKD 5.35, implying significant upside from its closing price of HKD 3.45 on August 28. The typical characteristics of "high dividend plus low valuation" further highlight the allocation value of SUNSHINE INS. In 2025, SUNSHINE INS distributed dividends of RMB 0.19 per share, with a payout ratio of 34.65%, maintaining stability for four consecutive years. Based on the stock price at the end of August 2026, the TTM dividend yield is approximately 6.3%, ranking among the top of H-share listed insurers. Alongside its high dividend, SUNSHINE INS's low valuation feature is equally significant. Industrial Securities noted that SUNSHINE INS's current PEV stands at only 0.27, at the 23rd percentile of its historical range, indicating relatively high allocation cost-performance.