Founder Securities released a research report stating that the insurance industry is witnessing simultaneous improvements on both the asset and liability sides, with stable growth expected to continue during the peak sales season. Valuations may see sustained recovery.

Stabilizing interest rates and improving equity markets are driving steady rebounds in investment yields. Regulatory policies such as unified reporting and pricing, along with reductions in guaranteed interest rates, are helping to lower liability costs, mitigating spread risks. Coupled with significant equity market elasticity, both performance and valuations are poised for a dual boost. Key insights from Founder Securities include:

**Performance Overview: Accelerated Net Profit and Sequential Net Asset Improvement** Net profit growth has notably accelerated, with Q4 2025 expected to maintain steady momentum. Profit growth rankings: China Life (+60.5%) > New China Life (+58.9%) > PICC P&C (+50.5%) > PICC Group (+28.9%) > CPIC (+19.3%) > Ping An (+11.5%). Divergence in profit growth is attributed to differences in investment structures and elasticity. With a low base in Q4 2025, profit growth is projected to stabilize.

Net assets improved sequentially, supported by rising interest rates, which helped listed insurers offset bond depreciation pressures. Year-to-date growth rankings: China Life (+22.8%) > PICC Group (+16.9%) > PICC P&C (+12.4%) > Ping An (+6.2%) > New China Life (+4.4%, turning positive YTD) > CPIC (-2.5%).

**Steady NBV Growth in Life Insurance, Expected to Continue in 2026** New Business Value (NBV) growth varied but is likely to sustain momentum in 2026. Rankings: PICC Life (+76.6%) > New China Life (+50.8%, prior-year data not adjusted for YE 2024 assumptions) > Ping An (+46.2%) > China Life (+41.8%) > CPIC (+31.2%) > AIA (+18%). China Life, Ping An, and PICC Life showed accelerating growth, while New China Life and CPIC slowed due to base effects.

NBV growth in 2026 is expected to persist, driven by enhanced product competitiveness and rising demand. Lower guaranteed rates are also boosting NBV margins (NBVM), supporting steady NBV expansion.

**Divergence in P&C Premium Growth, Improved COR** P&C premium growth varied: Ping An (YoY +7.1%) > PICC P&C (YoY +3.5%) > CPIC (YoY +0.1%), reflecting differences in risk clearance timing and base effects.

Combined ratios (COR) improved across the board: PICC P&C (96.1%, YoY -2.1 ppts) < Ping An (97.0%, YoY -0.8 ppts) < CPIC (97.6%, YoY -1 ppt). The improvement stems from reduced catastrophe losses and unified auto insurance pricing. Full implementation of unified pricing in non-auto insurance could further sustain lower COR levels.

**Rising Investment Yields and Strong Equity Elasticity** Total investment yields rose YoY, though comprehensive yields declined due to bond depreciation from falling rates. New China Life’s comprehensive yield fell 1.4 ppts YoY to 6.7% (annualized). Total investment yields improved on strong equity returns, with annualized rankings: New China Life (8.6%) > China Life (8.56%) > PICC Group (7.2%) > CPIC (6.9%).

Despite a focus on OCI (high-dividend allocations), insurers are actively capitalizing on structured investment opportunities. With long-term funds flowing into the market, equity elasticity remains robust, positioning insurers to benefit from market rallies.

**Risks:** Equity and bond market volatility, pressure on dividend insurance sales, and heightened catastrophe risks.