According to analysis, Guotai Haitong Securities Co., Ltd. has released a research report stating that listed insurers are expected to achieve improved profitability in the first half of 2026, benefiting from a recovery in the external equity markets and flexible, proactive asset allocation strategies. However, profit performance among insurers may show divergence. Both property and casualty and life insurance operations continue to improve, and shareholder return policies are expected to remain steady. The current stock prices imply a 10-year government bond yield significantly lower than the actual level, suggesting an opportunity for valuation repair in insurance stocks. The firm maintains an "Overweight" rating on the sector.
Key Points from Guotai Haitong's Analysis
Profitability Recovery and Divergence in H1 2026
The recovery in the equity markets is expected to drive a significant expansion in profit growth for listed insurers in the first half of 2026 compared to the first quarter, though differences in equity portfolio structures may lead to varied profit outcomes. The projected net profit growth rates for H1 2026 are: China Life Insurance Co Ltd (153.9%) > China Taiping Insurance Holdings Co Ltd (87.2%) > New China Life Insurance Co Ltd (61.4%) > Ping An Insurance (Group) Company of China, Ltd. (33.3%) > The People's Insurance Company (Group) of China Ltd. (30.9%) > PICC Property and Casualty Company Limited (21.7%) > Sunshine Insurance Group Co., Ltd. (15.6%) > China Pacific Insurance (Group) Co., Ltd. (9.2%).
Contractual Service Margin (CSM) for life insurance is expected to be released steadily, while underwriting profits for property and casualty insurance are forecast to grow robustly. Improvements in investment service performance and the ongoing clearing of impairment risks are projected to drive steady growth in Operating Profit After Tax (OPAT). Ping An is expected to see a year-on-year increase of 7.5% in H1 2026, while China Pacific Insurance is forecast to grow by 7.0%.
Listed insurers are anticipated to continue their steady shareholder return policies in H1 2026. Profit growth combined with improvements on the asset and liability sides is expected to lead to a steady increase in net assets attributable to parent company shareholders by the end of H1 2026 compared to the beginning of the year.
Steady Growth in Life Insurance NBV for H1 2026
Regarding premiums, life insurance original premiums showed steady growth from January to May 2026. Growth slowed somewhat in the second quarter due to new bancassurance regulations and base effects, but strong demand for savings-type insurance products is expected to persist amid a trend of household deposit migration, supporting continued steady growth in new premium income for listed insurers.
In terms of value margin, factors such as the reduction in assumed interest rates, stricter channel cost controls, and insurers' efforts to optimize policy duration structures are expected to further improve the value margin. The projected New Business Value (NBV) growth rates for listed insurers in H1 2026 are: China Life Insurance Co Ltd (42.1%) > New China Life Insurance Co Ltd (15.3%) > Ping An Life Insurance Co of China Ltd (13.3%) > CPIC Life Insurance Co., Ltd. (12.2%) > PICC Life Insurance Co Ltd (7.2%).
Slower P&C Premium Growth, Stable Underwriting Profit for Leading Firms
Property and casualty insurance premium growth for listed insurers is expected to be slow in H1 2026. Growth in auto insurance faces pressure due to fluctuations in new car sales.
Despite potential periodic disruptions from catastrophes, the trend of continuous improvement in underwriting profitability for leading insurers is expected to remain intact. Leading P&C companies are maintaining strict underwriting quality controls and deepening comprehensive management of non-auto insurance lines, supporting a continued improvement in underwriting profits. The projected Combined Ratios (COR) for listed insurers in H1 2026 are: PICC Property and Casualty Company Limited (95.1%, down 0.10 ppt year-on-year), Ping An Property & Casualty Insurance Company of China, Ltd. (96.1%, down 0.20 ppt year-on-year), and CPIC Property & Casualty Insurance Co., Ltd. (94.6%, down 0.19 ppt year-on-year).
Risk Factors to Consider
Key risks include a decline in long-term interest rates, volatility in equity markets, and liability cost improvements falling short of expectations.
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