New China Life Insurance Company Ltd. (NCI) (601336.SH, 01336.HK) is planning to issue RMB 10 billion in perpetual bonds to replenish capital.
Recently, NCI released materials for its fourth interim shareholders' meeting in 2025, which included proposals such as issuing capital bonds. According to the announcement, the company intends to issue up to RMB 10 billion in domestic perpetual capital bonds (a type of perpetual bond) to enhance its capital strength and improve its core solvency adequacy ratio. The raised funds will primarily be used to supplement core capital and allocate fixed-income assets. The issuance is still subject to approval from shareholders and regulators.
It is worth noting that multiple insurance companies have already issued capital replenishment bonds or perpetual bonds in 2025, with total issuance exceeding RMB 70 billion—surpassing the same period last year in terms of both volume and number of issuers.
In the first three quarters of 2025, benefiting from the stabilization and recovery of China's capital markets, NCI's investment income continued to grow significantly year-on-year, building on the high growth of the previous year. This drove substantial increases in both operating revenue and net profit attributable to shareholders, with growth rates of 28.3% and 58.9%, respectively.
On the liability side, NCI's original premium income continued to rise. For the first 10 months of 2025, the company reported original premium income of RMB 181.973 billion, up 17% year-on-year. Meanwhile, the surrender rate has improved, standing at 1.2% for the first three quarters—a 0.1 percentage point decline compared to the same period last year.
**Plans to Issue RMB 10 Billion in Perpetual Bonds to Strengthen Capital** According to the announcement, NCI released materials for its fourth interim shareholders' meeting on December 4, 2025, with key agenda items including the issuance of capital bonds.
Specifically, the company plans to issue up to RMB 10 billion in domestic perpetual capital bonds to enhance its capital base and improve its core solvency adequacy ratio. The bond term aligns with the company's duration, with the first call option set at the end of the fifth year. The proceeds will mainly be used to supplement core capital and allocate fixed-income assets. The issuance still requires approval from shareholders and regulators.
Unlike traditional bonds with maturity dates, perpetual bonds have no fixed term, allow for deferred interest payments without constituting default, and include write-down or equity conversion clauses if core solvency ratios decline—directly addressing insurers' solvency concerns.
Although NCI's core solvency adequacy ratio remains well above regulatory requirements, it has declined in 2025. The Q3 report shows that the ratio dropped from 170.72% at the end of Q2 to 154.27%, while the comprehensive solvency adequacy ratio fell from 256.01% to 234.15%.
The perpetual bond issuance is expected to partially improve NCI's core solvency. In fact, as market interest rates continue to decline, solvency ratios across insurers have generally weakened. This year, perpetual bonds have dominated insurers' bond issuances, accounting for over half of issuers and more than 70% of total issuance volume—already exceeding 2024 levels.
In 2023 and 2024, NCI also issued capital replenishment bonds. In November 2023, it issued RMB 10 billion in 10-year fixed-rate capital replenishment bonds in the interbank market, followed by another RMB 10 billion issuance in June 2024 with a 10-year term, a 2.27% coupon for the first five years (significantly lower than 2023), and a call option at the fifth year. Both issuances aimed to strengthen capital and support sustainable business growth.
Alongside the perpetual bond plan, NCI announced that its eighth board's term is ending, and the meeting will elect the ninth board. Nominees include executive directors Yang Yucheng and Gong Xingfeng, non-executive directors Yang Xue, Mao Sixue, Hu Aimin, and Zhang Xiaodong, as well as independent directors Xu Xu, Guo Yongqing, Zhuo Zhi, and Zhang Xiufen (pending regulatory approval).
**Annualized Investment Yield of 8.6% in First Three Quarters** While bond issuances can quickly replenish capital, insurers' long-term sustainability ultimately depends on profitability.
NCI delivered strong earnings in the first three quarters of 2025. Operating revenue reached RMB 137.252 billion, up 28.33% year-on-year, while net profit attributable to shareholders surged 58.9% to RMB 32.857 billion. The company attributed this to robust investment income, which soared 687.16% year-on-year to RMB 40.413 billion, compared to RMB 5.134 billion in the same period last year.
As of September, NCI's investment assets totaled RMB 1.77 trillion. Notably, its investment yield improved progressively: the annualized total investment yield rose from 5.7% in Q1 to 5.9% in H1, and further to 8.6% for the first three quarters—up 1.8 percentage points year-on-year. The gains were driven by market recovery and higher equity investment returns.
Investment income growth has been a key driver of listed insurers' profits. Many insurers capitalized on Q3 market opportunities by deploying long-term funds, while the new financial instruments standard allowed more equity assets to be classified as trading securities, boosting reported profits.
In long-term investments, NCI's joint venture with China Life Insurance—the three-phase Honghu Fund—has performed well. To date, NCI has contributed nearly RMB 50 billion to the fund series, innovating long-term investment models. The first phase, with RMB 25 billion each from NCI and China Life, has fully deployed capital, delivering above-benchmark returns and below-benchmark risk, with total comprehensive income reaching RMB 5.684 billion by end-Q2. Recently, NCI's "Long-Term Capital Entry into Markets" case was selected as a 2025 "Financial Reform" model by CCTV Finance.
On the liability side, NCI's premium income grew steadily, with the surrender rate improving year-on-year. Original premium income for the first 10 months reached RMB 181.973 billion, up 17%.
While Q3 premium breakdowns were not disclosed, the first nine months saw original premium income rise 18.6% to RMB 172.705 billion. Long-term insurance first-year premiums surged 59.8% to RMB 54.569 billion, with first-year regular premiums up 41% to RMB 34.9 billion and single-premium products jumping 109.2% to RMB 19.669 billion. Renewal premiums grew 5.9% to RMB 114.62 billion, maintaining stability.
The surrender rate for the first three quarters was 1.2%, down 0.1 percentage point year-on-year. Persistency rates for 13-month and 25-month individual life policies improved, while first-year regular premium growth and enhanced business quality drove a 50.8% surge in new business value.
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