As the interim reports for 2026 from China's five major listed insurers are released one after another, their first-half investment performance has now been officially disclosed. Data shows that PICC Group, China Life Insurance, Ping An Insurance, China Pacific Insurance, and New China Life Insurance achieved total investment income of RMB 641.32 billion in the first half of the year, a year-on-year surge of 74.6%. This investment momentum propelled their combined net profit attributable to shareholders to RMB 317.387 billion, up 78.1% year-on-year, firmly establishing investment gains as the decisive factor behind the sector's earnings growth.
According to the financial reports, the total investment assets of these five insurers reached RMB 21.6 trillion by the end of the first half, with allocation ratios for equity assets such as stocks and equity funds generally on the rise. This backdrop has put the future direction of insurance capital under the market's spotlight. At the recently held interim results conferences, senior executives from multiple listed insurers indicated that raising equity allocation ratios has become an industry consensus amid the low-interest-rate environment, with plans to intensify investments in tech innovation and new quality productive forces in the second half of the year.
Investment Becomes the Core Engine Driving Earnings Growth
With the interim reports now fully disclosed, the investment side has emerged as the primary engine of profit growth, with China Life Insurance serving as a prime example. The company's financial report shows total investment income of RMB 314.504 billion for the first half of 2026, an increase of RMB 186.998 billion from the same period last year, representing a substantial year-on-year growth of 146.7%. This surge in investment returns fueled a massive profit increase, with net profit attributable to shareholders exceeding RMB 130 billion, up 228.6% year-on-year.
China Life Insurance attributes its first-half profit growth to deepened coordination between assets and liabilities, alongside steady progress in sectors such as new quality productive forces, which delivered favorable investment results. The company's allocation to stocks and funds rose from 16.89% at the end of 2025 to 19.14% by the end of June 2026, primarily driven by its long-term equity positioning and fluctuations in equity asset market values. Securities analysts suggest that the company's substantial holdings of stocks and funds classified as financial assets measured at fair value through profit or loss, with a relatively higher share in growth sectors like tech innovation, have significantly boosted overall equity investment returns.
However, such high-beta growth positions, while contributing to returns, also imply greater sensitivity to market volatility. During the first half of 2026, the A-share market exhibited a clear pattern of sector divergence with tech stocks rallying strongly, particularly the semiconductor sector. Yet, since July, market volatility has intensified, with tech and semiconductor stocks experiencing notable pullbacks. In response, China Life Insurance management stated that after increasing investment intensity in new quality productive forces, short-term profit fluctuations from an accounting perspective are inevitable, urging investors to evaluate the company's performance from a long-term viewpoint rather than focusing on temporary swings.
Beyond China Life Insurance, the other four listed insurers also posted year-on-year gains in total investment income. Ping An Insurance recorded total investment income of RMB 136.942 billion in the first half of 2026, up 42.3%; PICC Group reached RMB 66.327 billion, up 59.9%; China Pacific Insurance posted RMB 66.022 billion, up 16.1%; and New China Life Insurance saw RMB 57.525 billion, up 27%. This surge in investment earnings drove notable profit increases across the board, with net profits attributable to shareholders reaching RMB 92.585 billion for Ping An Insurance (up 36.1%), RMB 36.745 billion for PICC Group (up 38.5%), RMB 30.775 billion for China Pacific Insurance (up 10.4%), and RMB 22.793 billion for New China Life Insurance (up 54%).
In tandem with these strong results, the five insurers also announced interim dividends, with combined cash payouts planned to exceed RMB 39 billion, marking a record high for mid-year distributions.
Divergent Approaches to Measuring Investment Returns
Amid the broad uptick in investment income, the "investment return rate" has become the yardstick for assessing insurer performance, though disclosure standards vary across companies. China Life Insurance reported a total investment return rate of 5.58% for the first half, up 2.29 percentage points year-on-year, with a three-year average (arithmetic mean) of 4.76% from 2023 to 2025. Ping An Insurance disclosed a net investment return rate (non-annualized) of 1.4% for the first half, down 0.4 percentage points, and a comprehensive investment return rate (non-annualized) of 2.1%, down 1 percentage point. Its three-year average net and comprehensive return rates stand at 3.9% and 5.2%, respectively, while decade averages are 4.8% and 4.9%.
China Pacific Insurance offered a more comprehensive disclosure, reporting a comprehensive investment return rate (non-annualized) of 1.8% for the first half, down 0.6 percentage points; a total investment return rate (non-annualized) of 2.4%, up 0.1 percentage points; and a net investment return rate (non-annualized) of 1.5%, down 0.2 percentage points. Its three-year average total return rate is 3.9%. PICC Group, which did not disclose a comprehensive return rate, posted a total investment return rate (non-annualized) of 3.7% for the first half, up 1.1 percentage points, and a net return rate (non-annualized) of 1.7%, down 0.2 percentage points, with a three-year geometric average total return rate of 5%.
In contrast to the non-annualized figures used by its peers, New China Life Insurance reported annualized data for the first half of 2026: a net investment return rate of 2.6%, down 0.4 percentage points; a total investment return rate of 6.7%, up 0.8 percentage points; and a comprehensive return rate of 6.4%, flat year-on-year. Its three-year averages for net, total, and comprehensive return rates are 3.2%, 4.7%, and 5.4%, respectively.
Behind the varied metrics and figures lies a divergence in investment strategies among insurers. Executives from several listed insurers noted that current strategy differences across insurance groups are substantial, stemming from complex factors such as main product structures, parameter settings in asset-liability models, solvency constraints, and shareholder dividend policies. When evaluating these disparate indicators, industry observers suggest that simple comparisons of short-term return metrics may not provide a full or fair perspective. As typical long-term and patient capital, insurance funds must navigate economic cycles by adhering to the discipline of strategic asset allocation, leveraging both disciplined and flexible tactical positioning to seize structural shifts and enhance long-term returns.
Ramping Up New Quality Productive Forces Allocations in H2 2026
The financial reports show that as of the end of the second quarter of 2026, the combined investment assets of the five major listed insurers totaled RMB 21.6 trillion, with equity allocations including stocks and equity funds exceeding RMB 4 trillion, a net increase of approximately RMB 490 billion from the end of 2025. Stock holdings alone amounted to around RMB 2.8 trillion, with equity allocation ratios ranging between 9.7% and 14.6% across the five firms.
By the end of the second quarter, China Life Insurance's stock holdings surpassed RMB 1 trillion for the first time, nearing RMB 1.04 trillion. Ping An Insurance's combined stocks and equity funds reached RMB 1.28 trillion, accounting for 19.4% of its investment assets, up 0.2 percentage points from year-end. China Pacific Insurance raised its combined allocation to stocks and equity funds to 13.9%, an increase of 0.5 percentage points. New China Life Insurance's stock and fund allocations stood at 13.2% and 12.4%, respectively, up 1.4 and 3 percentage points from the end of 2025. PICC Group's stock and fund ratios reached 9.7% and 5.7%, respectively, rising 1 and 1.1 percentage points.
Looking ahead to the second half of 2026, executives at several listed insurers have clearly stated their commitment to further increasing equity allocations and expanding investments in new quality productive forces. This direction was foreshadowed on July 20, when the five insurers jointly announced their confidence in China's capital markets, pledging to leverage their strengths as long-term and patient capital to boost investment in tech innovation and new quality productive forces.
China Life Insurance Vice President and Board Secretary Liu Hui outlined plans for "systematic allocation," focusing on key tracks such as AI and semiconductors, health and biotechnology, and green energy and new infrastructure across development stages, while diversifying through multi-asset approaches and strengthening post-investment management. By the end of the first half, the company's investments in new quality productive forces exceeded RMB 540 billion, with a compound annual growth rate of 30%, utilizing models including direct equity, PE funds, fund-of-funds, M&A funds, and secondary transactions. China Pacific Insurance Vice President and CFO Su Gang stated that the company will steadily raise its equity allocation ratio, with tactical adjustments favoring growth-style targets in satellite strategies selected by internal and external managers.
Overall, a "barbell strategy" has become standard across the industry: one end anchored by high-dividend OCI assets for stability, and the other by high-growth assets tied to new quality productive forces for enhanced upside. Ping An Insurance Co-CEO Guo Xiaotao remarked, "High-dividend stocks form our solid base, while we are very optimistic about the tech sector among growth stocks, with long-term confidence in technology, AI, high-end manufacturing, innovative drugs, and energy." New China Life Asset Management President Chen Yijiang added that there is a current pool of high-quality, high-yield, dividend-paying investment targets suitable for large-scale, long-term allocation by insurance funds, alongside significant opportunities emerging from new quality productive forces, particularly in AI, biomedicine, new materials, and new energy, which represent key focus areas for the next wave of technological revolution.
Disclaimer: This content and data are for reference only and do not constitute investment advice. Please verify before use. Trading based on this information is at your own risk.
Comments