After a profitable first quarter, Xiaokang Life Insurance recorded a sharp loss of 601 million yuan in the second quarter of 2026. The company disclosed in its Q2 solvency report on July 30 that it posted total insurance premium income of 505 million yuan for the first half of the year, with a cumulative net loss of 508 million yuan. Specifically, the second quarter saw insurance premium income of 280 million yuan and a net loss of 601 million yuan, marking a significant reversal from the first quarter's performance.
Accompanying the heavy losses was a notable weakening of the company's investment returns. In Q2 2026, Xiaokang Life's investment yield stood at -1.06%, while its comprehensive investment yield plummeted to -7.30%. For the first half of the year, the cumulative investment yield was 0.98%, and the cumulative comprehensive investment yield was -5.24%. In contrast, the company's three-year average investment yield and average comprehensive investment yield were 6.74% and 8.92%, respectively. By the end of the second quarter, the book value of the company's investment assets had fallen to 15.021 billion yuan, a decrease of approximately 745 million yuan from the end of the first quarter.
The losses also directly impacted the company's capital position. As of the end of Q2, Xiaokang Life's actual capital stood at 2.869 billion yuan, a decrease of 724 million yuan or 20.15% from the end of the first quarter. Core Tier 1 capital declined by 917 million yuan. The company attributed the drop in core Tier 1 capital primarily to a 749 million yuan reduction in net assets during the quarter.
By the end of Q2, Xiaokang Life's core solvency adequacy ratio was 231.46%, down 33.95 percentage points from the previous quarter. Its comprehensive solvency adequacy ratio was 248.70%, a decline of 17.17 percentage points. The company's risk comprehensive rating for the last two periods remained at BB. Xiaokang Life expects that by the end of the third quarter, these two solvency adequacy ratios could further decline to 198.23% and 213.07%, respectively.
Regarding changes in minimum capital, Xiaokang Life stated in its solvency report that the decrease in the current quarter was mainly due to asset allocation adjustments: first, a reduction in bond assets led to a decline in the minimum capital required for spread risk under credit risk; second, fluctuations in the market value of overseas equity assets caused a decrease in the minimum capital for market risk. The company also noted that no major investment activities or significant investment losses, as defined by solvency regulatory rules, occurred during the reporting period.
From a business scale perspective, Xiaokang Life's premium income did not shrink significantly. In the first half of the year, the company's cumulative signed premiums totaled 791 million yuan, with Q2 contributing 386 million yuan, down about 4.8% from 405 million yuan in Q1. For new business, Xiaokang Life achieved first-year regular premium signed premiums of 175 million yuan in the first half, including 98.81 million yuan in Q2. The new business value for the first half was 19.56 million yuan, with Q2 contributing 12.4 million yuan, accounting for over 60% of the half-year total. The new business margin in Q2 was 5.65%, higher than the 4.81% recorded for the entire first half. These indicators suggest that the company's insurance operations maintain some growth momentum.
In terms of distribution channels, among the 791 million yuan in cumulative signed premiums for the first half, the bancassurance channel contributed nearly 90%, amounting to 711 million yuan. Other channels contributed 74.27 million yuan, the internet channel added 5.75 million yuan, while individual and group insurance channels generated no signed premiums.
During Q2, Xiaokang Life also disclosed its first equity transfer plan since rebranding. On May 14, the company announced that its shareholder, Guizhou Guixing Automobile Sales Service Co., Ltd. (Guizhou Guixing), intended to transfer its entire 7% stake to a new shareholder, Tibet Junjie Investment Co., Ltd. The shareholding change is subject to approval by the Shanghai Regulatory Bureau of the National Financial Regulatory Administration.
Currently, Xiaokang Life has four shareholders: Hongshang Industry Holding Group Co., Ltd. (Hongshang Group, 33%), Contemporary Amperex Technology Co., Ltd. (CATL, 300750.SZ; 03750.HK, 30%), Tsingshan Holding Group Co., Ltd. (Tsingshan Holding, 30%), and Guizhou Guixing (7%).
Xiaokang Life was formerly Sino-French Life Insurance, a joint venture between China National Post Bureau and CNP Assurances. In 2015, China Post exited the joint venture, and Hongshang Group became a shareholder. For an extended period, Sino-French Life faced liquidity crises, leading to solvency issues and consecutive losses, relying on multiple shareholder loans to survive. In December 2020, the two old shareholders, CNP Assurances and Beijing Renji Jiuding Asset Management Co., Ltd., exited, while three new investors—Tsingshan Holding, CATL, and Guizhou Guixing—joined, increasing the company's registered capital to 3 billion yuan. In July 2021, Sino-French Life was officially renamed Xiaokang Life. In 2024, Xiaokang Life recorded its first profitable year post-rebranding, with a net profit of 514 million yuan. In 2025, the company’s net profit was 442 million yuan.
Amid the financial reversal, Xiaokang Life also experienced management changes in Q2. Starting from June 2026, Huo Kang resigned from his roles as director and chief financial officer. Luo Zhenhua joined Xiaokang Life as interim head, Sun Xiaoyu was approved as chief actuary, and Yuan Qingsong was approved as assistant general manager and chief investment officer. Notably, since the departure of former Sino-French Life general manager Tang Gengrong in 2016, the formal general manager position at Xiaokang Life has remained vacant for nearly a decade. Luo Zhenhua is not new to the company; he served as deputy general manager of Sino-French Life from 2015 to 2017 and later as general manager of Huagui Life Insurance. His return as interim head may pave the way for him to fill the general manager role.
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