Guoren Property & Casualty Insurance Co., Ltd. (referred to as Guoren Insurance) recently released its solvency report for the fourth quarter of 2025, revealing a stark contrast that has captured market attention: while cumulative profit for the first three quarters reached 338 million yuan, the full-year net profit stood at a mere 67 million yuan. This indicates a substantial loss of 271 million yuan in the fourth quarter alone. This marks the second consecutive year of a similar pattern, where performance takes a sharp downturn at year-end, making the final quarter a significant drag on annual results.
Concurrently, the company's solvency adequacy ratio declined in the fourth quarter, and its investment yield turned negative. Notably, against a backdrop of an overall bullish stock market, Guoren Insurance's equity investment scale for the full year decreased instead of increasing, shrinking by approximately 1 billion yuan, a near one-third reduction year-over-year.
Although Guoren Insurance has maintained profitability for seven consecutive years since 2019, beneath the surface of seemingly stable performance lie underlying concerns. Premium income has declined for the first time in nearly eight years, profits are volatile, and the sustainability of earnings is being tested.
Amid this performance volatility, two of Guoren Insurance's state-owned shareholders plan a complete exit. However, given the ongoing deep transformation within the insurance industry and intensifying market divergence, equity transactions for small and medium-sized insurers frequently face a cold reception. Whether this "withdrawal" will proceed smoothly remains fraught with uncertainty.
According to Guoren Insurance's latest solvency report, full-year 2025 insurance revenue reached 12.162 billion yuan, a decrease of 3.44% year-over-year, marking the first premium decline in nearly eight years. The full-year net profit was 67 million yuan, an increase of 22.34% year-over-year. This profit level appears relatively thin compared to revenue exceeding 10 billion yuan, with Return on Equity (ROE) and Return on Total Assets at 2% and 0.3% respectively, showing a considerable gap compared to leading property and casualty insurers.
Information from Far East Credit Rating's bulletin indicates that Guoren Insurance's insurance revenue for the first three quarters of 2025 decreased by 9.08% year-over-year, primarily due to regulatory policy adjustments and the contraction of credit guarantee and health insurance businesses.
It is noteworthy that the net profit for the first three quarters had already reached 338 million yuan, meaning the company incurred a loss of 271 million yuan solely in the fourth quarter. Similarly, in 2024, Guoren Insurance experienced a comparable situation: a profit of 218 million yuan in the first three quarters, but a full-year net profit of only 55 million yuan, resulting in a fourth-quarter loss of 163 million yuan. This "high start, low finish" profit pattern has drawn market scrutiny.
Looking at 2024, despite year-over-year growth in both premium income and total operating revenue, net profit attributable to the parent company declined. This was mainly because the growth in operating expenses outpaced the growth in operating revenue. Specifically,手续费及佣金支出 (handling and commission expenses) increased by 29.41% to 1.705 billion yuan, and业务及管理费 (business and management expenses) grew by 13.4% to 2.757 billion yuan.
Industrial economist Zhi Peiyuan suggests that sharp quarterly profit fluctuations in insurance companies result from a combination of factors including underwriting losses, investment business volatility, seasonal elements, and industry transformation pressures. This phenomenon reflects deep-seated issues within some insurers regarding business structure, risk pricing, expense control, and asset-liability management.
From a seasonal perspective, the fourth quarter is typically the peak claim period for insurers. Auto insurance claims often rise at year-end, and non-auto insurance lines like commercial property insurance and engineering insurance also frequently see concentrated claim settlements towards the year's end. Insurers usually conduct centralized channel fee settlements and marketing campaign investments in Q4, leading to increased expense ratios.
Regarding the investment business, under new accounting standards, fair value changes in financial assets are directly recorded in the income statement, significantly increasing the volatility of net profit. With intensified capital market fluctuations in 2025, the uncertainty of investment returns was further amplified, negatively impacting fourth-quarter profits.
In the fourth quarter, Guoren Insurance's investment yield and comprehensive investment yield were -0.08% and -0.19% respectively, making it the only quarter in 2025 with a negative investment yield. The full-year figures for investment yield and comprehensive investment yield were 5.51% and 5.36% respectively.
As of the end of 2025, Guoren Insurance's investment assets stood at 13.8 billion yuan, a 7% decrease from the end of the third quarter. Within this, equity investments totaled 2.92 billion yuan, down 15.84% quarter-over-quarter and 25.93% year-over-year.
Among various asset classes, equity investments accounted for 21.16% of the total, a decrease of 5.67 percentage points from the end of the previous year. Against the backdrop of a continuously heating stock market in 2025, Guoren Insurance's equity investment assets decreased by about 1 billion yuan, contrasting with the strategy of most peers who increased their positions, thus failing to capitalize on the trend to bolster equity investment returns.
Bond assets surpassed equity investments to become the largest asset class in Guoren's portfolio. By the end of 2025, various bonds (including government, financial, corporate, and company bonds) totaled 3.494 billion yuan, an increase of 8.01% year-over-year, accounting for 25.32% of investment assets.
In the fourth quarter, Guoren Insurance's solvency came under pressure. Its core solvency adequacy ratio dropped from 136.34% in Q3 to 124.28%, and its comprehensive solvency adequacy ratio fell from 272.69% to 248.55%. It is projected that both metrics will continue to decline in the next quarter. A decrease in solvency adequacy ratios is typically associated with various factors, including underwriting losses, poor investment returns, the impact of market interest rate changes on asset values, and insufficient capital replenishment from shareholders.
Examining the business structure of property and casualty insurers, auto insurance remains the largest business line. However, auto insurance has recently hit a growth bottleneck, with slowing new car sales, intensifying competition in the existing market, declining average premiums per vehicle, and rising loss ratios. Consequently, insurers are actively optimizing their business structures, with non-auto insurance lines (such as health, agricultural, and liability insurance) contributing more, driving the business structure towards diversification and higher quality.
From a broader market perspective, the original insurance premium income for auto insurance from P&C companies in 2025 was 940.9 billion yuan, a growth of 2.98% year-over-year. This growth rate was slower than the 5% growth rate for non-auto insurance premiums. Auto insurance's share of total premiums was 53.55%, slightly down from 54.04% the previous year, showing a general declining trend in recent years.
Around 2018, auto insurance business一度 accounted for over 80% of Guoren Insurance's premium income. This share was significantly reduced in subsequent years, falling below 50% in recent times and reaching 40.22% in 2022. However, in the following years, it showed a rising trend again. In 2025, Guoren Insurance's auto insurance written premiums were 6.064 billion yuan, up 0.91% year-over-year, accounting for 49.93% of total written premiums, an increase of 2.66 percentage points from the previous year, marking the third consecutive year of increase.
Beyond performance fluctuations, changes in Guoren Insurance's equity ownership have also attracted market attention. On December 19, 2025, a block of Guoren Insurance equity was listed for transfer on the Beijing Financial Assets Exchange. The transferor was China Railway Construction Investment Group Co., Ltd. (CRCC Investment Group). This transfer involved 200 million shares, representing 4.991% of Guoren Insurance's total equity, with a base price of 331 million yuan, equating to 1.654 yuan per share. The original information disclosure period ended on February 2 but has since been extended to February 9.
CRCC Investment Group is Guoren Insurance's fifth-largest shareholder. The 200 million shares being transferred represent its entire holding, constituting a complete sell-off. As CRCC's holding did not exceed 5%, it did not meet the threshold for a significant shareholder. Guoren Insurance publicly stated that the equity listing stems from the shareholder's own strategic adjustments and policy compliance requirements and will not have a substantive impact on the company's operations.
However, in recent years, several small and medium-sized shareholders have transferred their stakes in Guoren Insurance. In 2024, Beijing Dongcheng District State-owned Capital Operation Co., Ltd., then a joint fifth-largest shareholder, also planned to fully divest its 4.991% stake, with the price subject to negotiation. This equity transfer has not yet been completed.
On February 14, 2025, according to an announcement from Guoren Insurance, the company's original shareholder, CNFMC (presumably referring to a financial company within the Sinomach system, though the exact English name is unclear from context), transferred its entire 0.499% stake in Guoren Insurance via a non-public agreement to Sinomach Asset Management Co., Ltd. Both entities are member companies of China National Machinery Industry Corporation (Sinomach).
In recent years, it has become relatively common for central and state-owned enterprises (CSOEs) to list financial institution equity for transfer, significantly influenced by the "retreat from finance" directive. The entities primarily "retreating" are non-financial CSOEs. However, the market for financial institution equity transactions is characterized by many listings but few successful deals, with frequent occurrences of failed auctions or terminated transfers.
Li Runhua, a senior figure in the financial industry, believes the "retreat from finance" directive is a consistent and important measure in national financial regulation, with the core purpose of preventing the cross-transmission of financial risks and real economy risks. This move helps guide CSOEs to better focus on their main businesses, promote new quality productive forces, serve the real economy, and genuinely achieve high-quality economic development. However, due to high barriers to entry in the financial sector and the concentrated selling of equity, supply pressure increases, making transfers difficult.
Apart from multiple transfers by small and medium shareholders, Guoren Insurance also faces issues with some smaller shareholders being subject to失信 (credit失信, often meaning being listed as dishonest debtors) or enforcement actions.
The seventh-largest shareholder, Shanghai Mingjia Real Estate Development Co., Ltd., holds a 2.496% stake. This company has encountered severe operational issues, has been listed as a失信被执行人和被执行人 (dishonest person subject to enforcement and person subject to enforcement), and is entangled in judicial cases. Its Guoren Insurance shares are also pledged.
The ninth-largest shareholder, Yima Coal Industry Group Co., Ltd., holds a 1.497% stake. In December 2025, it was listed as a被执行人 (person subject to enforcement) by the Zhengzhou Intermediate People's Court, with total enforcement amounts of 13.8188 million yuan. In 2025, it also had four historical records as a被执行人, with total enforcement amounts of 3.02 million yuan.
The tenth-largest shareholder, Hubei Hongxin Industrial Co., Ltd., holds a 1.248% stake. This company is also experiencing severe operational problems, having entered bankruptcy review proceedings in 2023. Its Guoren Insurance shares are currently in a state of being seized for debt settlement due to litigation.
In Zhi Peiyuan's view, issues like shareholder失信 can lead to ongoing instability in the shareholding structure, affecting the company's capital operations and strategic execution. Problematic shareholders may struggle to participate effectively in corporate governance, leading to inefficiencies in board decision-making and even triggering risks related to connected transactions.
Currently, Shenzhen Investment Holdings Co., Ltd. holds a 41% stake in Guoren Insurance, making it the largest and controlling shareholder. Guoren Insurance is also the only property and casualty insurer controlled by Shenzhen's municipal state-owned assets. Overall operations are stable, and the company has been profitable for six consecutive years since 2019.
Guoren Insurance held its 2026 annual work conference on January 26, where the issue of "reducing costs, improving quality, and increasing efficiency" was mentioned multiple times. On one hand, auto insurance, as the foundational business, is squeezed by market competition and high channel costs, with its comprehensive cost ratio persistently exceeding the industry's healthy benchmark of 100%, making it difficult to translate premium growth into underwriting profits. On the other hand, in the complex and volatile capital market, the capabilities for asset allocation and risk control are being tested, failing to effectively act as a profit "stabilizer."
Therefore, the key to whether Guoren Insurance can break through in 2026 lies in the precise implementation of its "reduce costs, improve quality, increase efficiency" deployment. Specifically, the core indicators for testing the effectiveness of its reforms and alleviating profit pressure will be its ability to effectively reduce the comprehensive cost ratio on the underwriting side, optimize the structure of its non-auto insurance business, and simultaneously enhance asset allocation capabilities on the investment side to secure more stable returns.