Life insurers' original premiums in October totaled RMB 149.1 billion, down 4.6% year-on-year, with the decline widening by 0.4 percentage points compared to September. This is attributed to companies shifting focus to preparations for the 2026 strong start campaign. Meanwhile, property insurers' premiums reached RMB 119.6 billion, down 5.5% year-on-year, turning negative after a 7.2% growth in September, with both auto and non-auto insurance premiums declining.
From January to October, life insurers' original premiums amounted to RMB 4.2519 trillion, up 9.6% year-on-year, while total premiums reached RMB 4.801 trillion, up 8.8%. Policyholder investment contributions (mainly universal insurance) rose 2% year-on-year, and unit-linked insurance surged 17%. However, in October alone, policyholder investment contributions grew 7%, slowing by 22 percentage points from September, while unit-linked insurance fell 35%, reversing from a 312% surge in September.
The strong start campaign for 2026 is progressing steadily, with sustained market demand expected. Insurance products' guaranteed interest rates remain higher than bank deposits, maintaining their relative appeal. Optimism persists for new premium growth.
Health insurance premiums in October rose 0.5% year-on-year, slowing by 2.8 percentage points from September. From January to October, health insurance premiums grew 2.3%, accounting for 21% of total premiums by October-end, up 0.4 percentage points from September. Regulatory guidelines issued on September 30 aim to boost high-quality health insurance development, supporting products like participating long-term health insurance and personal account-based long-term medical insurance, which could further stimulate market growth.
Property insurers' premiums from January to October reached RMB 1.4908 trillion, up 4.0% year-on-year. However, October premiums fell 5.5%, reversing from a 7.2% rise in September. Auto insurance premiums dropped 6.6% year-on-year in October, impacted by a high base effect, despite robust auto production and sales growth (12.1% and 8.8% year-on-year, respectively). New energy vehicle (NEV) production and sales surged 21.1% and 20%, respectively, with higher premiums per NEV policy expected to support future auto insurance growth.
Non-auto insurance premiums also declined in October, down 3.4% year-on-year, reversing from a 9.6% rise in September. Health/accident/liability/agricultural insurance premiums in October changed by +18%, -3%, -3%, and -6% year-on-year, respectively, all slowing from September. While short-term growth may face pressure due to regulatory adjustments, long-term profitability is expected to improve.
Soochow Securities maintains that strong demand, coupled with lower guaranteed rates and a shift to participating products, will optimize liability costs and ease spread loss pressures. The 10-year government bond yield has rebounded to around 1.84%, and further economic recovery could alleviate insurers' investment yield pressures.
Insurance sector valuations remain historically low, with 2025E P/EV ratios of 0.55-0.94x and P/B ratios of 1.07-2.00x as of November 28, 2025. The sector retains an "overweight" rating.
Risks include a sustained decline in long-term interest rates and weaker-than-expected new premium growth.
Comments