The real test for Wang Xuze, the newly appointed General Manager of Taiping Life, begins this year.

On the evening of March 25th, China Life Insurance Company Limited (601628.SH; 02628.HK) and CHINA TAIPING (00966.HK) simultaneously disclosed their 2025 annual performance reports.

Evaluating the 2025 performance during the results conference on the morning of the 26th, China Life's Chairman, Cai Xiliang, described it as an "across-the-board success." The company demonstrated excellence across multiple key performance indicators, with its total investment yield reaching the best level in recent years. In contrast, CHINA TAIPING continued its transformation within the life insurance sector, significantly increasing the proportion of participating insurance to counter the declining interest rate cycle. However, CHINA TAIPING experienced a drop in its investment yield, and its new business value performance was mediocre.

Divergent Performance in New Business Value

The reports indicate that China Life's total assets reached 7.59 trillion yuan, a year-on-year increase of 12.1%. Total premium income was 729.887 billion yuan, up 8.7% year-on-year, surpassing the 700 billion yuan mark for the first time. Operating revenue was 615.678 billion yuan, increasing by 16.5% year-on-year. Net profit attributable to equity holders of the company was 154.078 billion yuan, surging 44.1% year-on-year. Its embedded value stood at 1.47 trillion yuan, firmly holding the top position in the industry.

It is noteworthy, however, that considering China Life's net profit attributable to equity holders for the first three quarters of 2025 was 167.804 billion yuan, this implies the company incurred a loss in the fourth quarter. According to Huatai Securities analysis, this was possibly due to investment volatility and increased impairment of other assets during that quarter.

CHINA TAIPING's total assets exceeded 1.9 trillion Hong Kong dollars in 2025, a 14.5% year-on-year increase. Profit attributable to shareholders was 27.059 billion Hong Kong dollars, skyrocketing by 220.9% year-on-year. The company attributed this substantial growth primarily to improvements in both insurance service performance and net investment performance compared to the previous year, as well as a one-time benefit from the new corporate income tax policy for China's insurance industry.

Regarding the key life insurance metric of new business value, the two companies showed a divergence in growth rates.

China Life's new business value for 2025 reached 45.752 billion yuan, a significant increase of 35.7% year-on-year, marking the highest growth rate for annual new business value since 2017. By channel, new business value from the individual agency channel increased by 25.5% year-on-year, while new business value from other channels surged by 169.3%, driven by robust growth in bancassurance.

The annual report shows that in 2025, China Life's bancassurance channel total premiums reached 110.874 billion yuan, breaking the 100-billion-yuan threshold, with a year-on-year increase of 45.5%. New single premiums amounted to 58.506 billion yuan, up 95.7% year-on-year, with the proportion of participating insurance in new single premiums rising by approximately 15 percentage points. First-year regular-premium policies reached 26.478 billion yuan, increasing by 41.0% year-on-year. Renewal premiums were 52.368 billion yuan, up 13.1% year-on-year, accounting for 47.23% of the channel's total premiums.

In contrast, CHINA TAIPING's life insurance new business value for 2025 was 9.589 billion Hong Kong dollars, increasing by only 5.34% year-on-year. By channel, the individual agency channel grew by 6.86%, the bancassurance channel increased by 5.66%, while other channels declined by 15.80%. Taiping Life's overall new business value margin was 21.3%, with the individual agency channel margin at 22.0% and the bancassurance channel margin at 20.3%.

The market expressed some disappointment with this new business value performance. J.P. Morgan Securities described CHINA TAIPING's 2025 fiscal year results as "mixed," citing impressive dividend per share as the positive aspect and the mediocre new business value as the negative.

A Tale of Two Investment Performances

Regarding investment capability, China Life's investment assets reached 7.42 trillion yuan by the end of 2025, growing 12.3% from the end of 2024. Total investment income realized was 387.694 billion yuan, an increase of 79.443 billion yuan compared to 2024. The total investment yield was 6.09%, hitting a new high in recent years, up 59 basis points from 2024. The average investment yield over the past three years was 4.76%.

Commenting on these results during the earnings conference, Liu Hui, Vice President and Board Secretary of China Life, stated that the investment performance was primarily attributable to China's high-quality economic development, the stabilizing effect of the capital market, the company's long-standing commitment to value investing, and its accurate market analysis and flexible tactical operations in 2025. Examples included actively promoting the entry of medium- and long-term funds into the market and making counter-cyclical investments in technology stocks representing China's new quality productive forces during market downturns, as well as seizing opportunities in previous years during periods of high interest rates and large-scale long-term bond issuance to increase long-term bond allocation across cycles.

Conversely, CHINA TAIPING's investment yields experienced a comprehensive decline. By the end of 2025, its investment assets were 1.7 trillion Hong Kong dollars, an 11.6% increase from the end of the previous year. Net investment income was 52.972 billion Hong Kong dollars, up 5.2% year-on-year, but the net investment yield was 3.21%, down 0.25 percentage points from the previous year. Total investment income was 66.826 billion Hong Kong dollars, a slight increase of 0.4% year-on-year. The total investment yield was 4.04%, down 0.53 percentage points from the previous year. The comprehensive investment yield was 1.73%, a sharp decrease of 8.59 percentage points from 10.32% the previous year.

Liu Xinqi, Chief Non-Bank Financial Analyst at Guotai Juntong, believes the decline in CHINA TAIPING's net investment yield is likely mainly due to the gradual maturity of its portfolio of high-quality fixed-income assets. The drop in the total investment yield is expected to be primarily affected by capital market volatility. The significant decline in the comprehensive investment yield is anticipated to be largely caused by unrealized losses on OCI (Other Comprehensive Income) bonds due to rising interest rates.

Taiping Life's Market Share Declines

In March 2025, Cheng Yonghong, the former General Manager of Taiping Life, retired upon reaching retirement age. In the year preceding her retirement, Cheng Yonghong strongly advocated for a shift towards participating insurance. In June of last year, Wang Xuze was appointed as the interim responsible person for Taiping Life. On March 9th of this year, Taiping Life announced that Wang Xuze officially assumed the position of General Manager.

Public records show that Wang Xuze was born in August 1972 and graduated from Tianjin University of Technology. He previously held positions including Assistant General Manager and Deputy General Manager of Taiping Life's Tianjin Branch, Deputy General Manager (acting in charge) and General Manager of the Dalian Branch, and General Manager of the Liaoning Branch. In January 2020, Wang Xuze was transferred to Taiping Life's headquarters, serving as the company's Marketing Director, and was subsequently promoted to Deputy General Manager in April 2022.

At CHINA TAIPING's full-year 2025 results conference on March 26th, Wang Xuze, responding to questions, stated that in 2026 the company would firmly maintain development confidence and strategic focus, advancing its "three-pronged" transformation: product diversification, diversification of term structures, and refinement of interest rate risk management. The aim is to achieve organic unity of stable profits, stable channels, and capital creation while strictly adhering to risk control boundaries. Simply put, the strategy involves focusing on participating insurance as the mainstay, while broadening the product lines for health, pension, and annuity insurance, lengthening policy terms, and reducing the impact of interest rate fluctuations on profitability. The annual report indicates that participating insurance already accounts for 86.1% of the first-year regular premiums for long-term policies at Taiping Life.

If a significant portion of Taiping Life's performance last year could still be credited to the efforts of former General Manager Cheng Yonghong, then the real test for Wang Xuze truly begins this year. The annual report shows that by the end of 2025, Taiping Life's market share had decreased to 4.2% from 4.5% in 2024. Simultaneously, the company experienced customer attrition, with the number of individual clients dropping from 13.907 million to 12.7474 million, a reduction of 1.1596 million, which is uncommon among leading insurance companies.