The 58 unlisted life insurance companies posted a combined net profit of 617 billion yuan in the first half of 2026, doubling from 296 billion yuan in the same period last year. Compared to 90 billion yuan two years ago, this represents a nearly sevenfold increase. While this performance is impressive, for some companies, the label "impressive" may only apply to the first half of the year.
Given the long-term nature of insurance funds, the market should focus on the long-term performance of investments, particularly over 3, 5, or even 10-year horizons. However, an objective fact is that in recent years, insurance company profits have become increasingly dependent on the current performance of capital markets. While all investments are influenced by market conditions to some extent, the persistently low interest rates and operational bottlenecks faced by life insurers have created pressures across the board. A bull market, from the perspective of insurers, could be seen as an opportunity to escape a difficult situation. As early as 2008, Taikang demonstrated how to seize bull market opportunities, using them to strengthen its liability side and emerge as a top-tier insurer. But every gift comes with a price.
As we noted in a recent video titled "Insurance Companies Earned 420 Billion Yuan in the First Half Year, but Lost It All in July," when including the performance of unlisted life and property insurers, combined with pre-profit announcements from listed insurers and assuming a 50% year-on-year growth in net profit for the remaining listed companies, the entire insurance industry's net profit in the first half could reach up to 420 billion yuan. However, July saw a sharp 6.4% decline in the A-share market, virtually erasing all gains since the beginning of the year. Based on disclosed first-half insurance fund utilization data, life and property insurers' stock holdings total about 3.8 trillion yuan, and including securities investment funds, the scale approaches 6 trillion yuan. Such a decline suggests that the profits from the first half have been largely wiped out. This is a snapshot of the industry's half-year performance.
The focus, however, is not solely on profits. The negative growth in the health insurance sector of life insurers is a significant pain point for the industry. This area represents a key future growth avenue but also a major current bottleneck. Whether the health insurance market can break through and stabilize on the trillion-yuan platform could be a transformative moment. We touched on this in a previous article titled "Insurance Industry Half-Year Profit Might Reach 420 Billion Yuan; Finance Has No Elites, Exceptions, or Special Cases." Next, let's examine the companies that performed well and those that struggled.
51 Companies Profitable, Only 7 in Loss
Bank-Owned Insurers' Profits Exceed 200 Billion Yuan; Joint Venture and Foreign Companies Surpass 100 Billion Yuan; Regional Firms End Three-Year Loss Streak, Turning Profitable in the First Half
Among the 58 unlisted insurers, 51 were profitable, with total profits of 625.2 billion yuan, while only 7 incurred losses totaling 8.3 billion yuan. This performance is rare. In the same period last year, only 38 companies were profitable, and two years ago, it was 29. The top performer, Taikang Life Insurance, reported a net profit of 158.21 billion yuan, roughly flat compared to 159.98 billion yuan in the first half of the previous year. Following were several bank-owned insurers: China Post Life Insurance (70.7 billion yuan, up 36.5%), ICBC-AXA Life Insurance (43.2 billion yuan, up 258.5%), ABC Life Insurance (33.1 billion yuan, up 345.8%), and CCB Life Insurance (32.0 billion yuan, up 466.4%).
On a category basis, bank-owned companies collectively achieved a net profit of 229.1 billion yuan, a 169% increase year-on-year. Joint venture and foreign companies posted a total net profit of approximately 113.3 billion yuan, up 222% year-on-year. Notable among them were CITIC-Prudential Life Insurance (23.0 billion yuan, up 124.3%), Zhonghong Life Insurance (18.3 billion yuan, up 723.7%), and Cigna-CMB Life Insurance (16.2 billion yuan, up 468.7%). Even the typically pressured small and medium-sized insurers achieved a profit of 82.6 billion yuan, a sharp increase of about 60 billion yuan from 23.1 billion yuan in the same period last year. The most struggling regional insurers also ended a three-year streak of first-half losses, posting a profit of 33.6 billion yuan. Thus, nearly every type of insurer saw a significant improvement in profit levels compared to the previous year or two. This was largely attributed to the second quarter.
Of the 58 companies, 49 derived their profits primarily from the second quarter. Among the top 10, second-quarter net profits accounted for over 60% of the half-year total. For instance, Happy Life Insurance reported a first-quarter loss of 10.4 billion yuan but reversed its financial statements with a 30.9 billion yuan profit in the second quarter. In March of this year, a sharp correction in the A-share market made the first-quarter performance of life insurers quite poor. Fortunately, the second quarter saw a notable recovery in the market.
Median Investment Return Rate at 1.94%; Median Comprehensive Investment Return Rate at 2.45%
The Former Median Dropped by 0.13 Percentage Points, the Latter Rose by 0.13 Percentage Points; 21 Companies Still Saw Net Asset Declines
Based on data from the 58 companies, compared to the same period last year, 30 companies saw an improvement in their investment return rate, while 28 saw a decline, roughly split in half. The median investment return rate was only 1.94%, a decrease of 0.13 percentage points, contrasting sharply with the significantly increased net profits. Specifically, only bank-owned insurers saw a 0.52 percentage point increase in their median investment return rate to 2.33%, while all other insurer types experienced declines. Joint venture and foreign companies had a median rate of 1.71%, down 0.35 percentage points year-on-year; regional companies were at 2.48%, down 0.20 percentage points; and other small and medium-sized companies were at 1.82%, down 0.45 percentage points. In reality, investment returns were primarily affected by the first quarter's poor performance. The March correction in the A-share market made the first-quarter results for life insurers quite poor. Although the second quarter saw a significant recovery, from a broader market perspective, it only recouped the losses from March's decline. For example, Hainan Boao Life Insurance had a negative investment return rate, while others like Minsheng Life Insurance remained below 1%. Looking at the second quarter alone, the median investment return rate was about 1.14%. Small and medium-sized companies like Guofu Life Insurance, Beijing Life Insurance, and Happy Life Insurance had impressive returns, with some achieving single-quarter rates exceeding 3% or even 4%.
Regarding comprehensive investment returns, about 32 companies saw an improvement over the same period last year. Zhonghong Life Insurance, Hetai Life Insurance, and Beijing Life Insurance showed notable increases of 2.6, 1.9, and 1.7 percentage points, respectively. However, comprehensive investment returns do not affect the income statement; they are primarily transferred to retained earnings, impacting net assets. Net asset data shows that in the first half of the year, 21 of the 58 companies saw a decline in net assets. The number of companies with negative net asset growth is roughly flat compared to the first quarter, but the first quarter statistics included 72 insurers. Considering the existing 58 companies and the fact that over a dozen listed system insurers are yet to report, the number of companies with declining net assets may continue to increase. This suggests that more companies might have seen net asset declines compared to the first quarter.
First Half-Year After the Second Phase Solvency Transition Period; Two Insurers Fail to Meet Solvency Standards; 11 Companies Have Core Solvency Ratios Below 100%
But the Situation Has Improved Significantly Compared to the First Quarter
The pressure on insurers extends beyond the asset side. With the end of the second phase of the solvency transition period, solvency pressures are increasing. In a previous article titled "Another 'Hardest' Opening: One-Third of Life Insurance Companies Have Negative Net Asset Growth," we noted that in the first quarter, 17 companies had core capital adequacy ratios below 100%, compared to 13 at the beginning of the year and 8 in the same period last year. By the half-year mark, compared to the first quarter, the situation appears slightly better. Among the 58 companies that have disclosed data, 11 have core solvency adequacy ratios below 100%, a significant reduction from 17 in the first quarter. Although over a dozen companies within the listed insurer system have not yet disclosed data, none of the 17 companies with ratios below 100% in the first quarter belonged to the listed insurer system. The reason is, of course, aggressive bond issuance. Subordinated capital can be supplemented through bond issuance, while core capital requires either retained earnings, shareholder capital increases, or perpetual bonds to supplement core Tier 2 capital, which is one of the few market-based tools available. This is why perpetual bonds have become a major focus in life insurance capital management in recent years.
Since 2026, insurers have continued to use perpetual bonds to supplement core Tier 2 capital. As of August 3, eight insurers have completed nine perpetual bond issuances, with a total actual issuance size of 293.4 billion yuan. Notable issuances include CITIC-Prudential Life Insurance issuing 90 billion yuan in two tranches, New China Life Insurance issuing 100 billion yuan, Cigna-CMB Life Insurance and China Merchants Reinsurance issuing 31 billion and 23 billion yuan respectively, Taikang Pension issuing 20 billion yuan, BOV Life Insurance issuing 12.4 billion yuan, China Post Life Insurance issuing 12 billion yuan, and Aviva-COFCO Life Insurance issuing 5 billion yuan. The improvement in solvency pressure is a positive sign. Additionally, the two companies failing to meet solvency standards remain Great Wall Life Insurance and Huahui Life Insurance. The former has a comprehensive solvency adequacy ratio of only 68.4%, far below the regulatory requirement of 100%, and a risk composite rating of D, ranking at the bottom of the industry. The latter's issue remains a risk composite rating of C.
Postscript: The Critical Liability Side Unveiled
Nearly 10% Growth Rate; 50 Companies with 370,000 Agents; What Struggles Lie Behind?
Profits are good, and premium growth is also strong. In the first half of 2026, unlisted insurers collectively achieved premium income of 7961.73 billion yuan, a year-on-year increase of 9.68%, up from 5.09% in the previous period, nearly doubling. 36 companies achieved positive premium growth, but 22 still experienced negative growth. Among them, bank-owned companies achieved premium income of 3142 billion yuan, up 8.34% year-on-year; joint venture and foreign companies achieved premium income of 1842 billion yuan, up 17.60% year-on-year, the fastest growth among all groups. Regional insurers and other small and medium-sized companies had premium incomes of 590 billion and 943 billion yuan, respectively, with growth rates of 8.82% and 0.21%. It must be acknowledged that small and medium-sized companies have relatively small liability sides, and such low growth rates indicate friction in liability channels. Historically, small and medium-sized companies have hoped to use bancassurance and professional intermediary channels to "sustain warfare through warfare" in order to develop their own insurance distribution channels. While a well-controlled channel is crucial for any company in any industry, unfortunately, this development model has not been achieved by small and medium-sized companies.
This is reflected in the weak insurance distribution channels. Among the 58 companies, 50 disclosed their agent numbers, totaling 371,700 agents. Taikang Life Insurance alone accounts for 237,600 agents. Thus, the remaining 49 companies have a combined agent force of about 134,000. In other words, the current insurance distribution landscape can be roughly divided into nine camps: China Life Insurance with 600,000 agents, Ping An Insurance with 350,000, Taikang Life Insurance, CPIC Insurance, and Taiping Life Insurance with 200,000, New China Life Insurance and small and medium-sized company groups with 150,000, and PICC Life Insurance and AIA Group with 10,000-agent teams. After Taikang, the real competition among small and medium-sized companies' agent forces begins. Following Taikang is CITIC-Prudential Life Insurance with a team of 14,000 agents, and then Huatai Life Insurance with 11,000 agents. Among bank-owned insurers, CCB Life Insurance has 9,223 agents. Next are three joint venture companies: MetLife-Sino-US United, Generali China Life Insurance, and Zhonghong Life Insurance, each with about 7,500 agents. Most other small and medium-sized companies have agent numbers below 5,000, with some even in the single digits. Compounding the problem, the industry's agent attrition rate remains high. Based on the data disclosed by the 50 companies, the weighted average agent attrition rate is about 28.32%. This means that about one-third of an insurer's agent force is "unstable." Compared to companies with stronger control over their insurance distribution like Zhonghong Life Insurance, even major players like Taikang Life Insurance and joint venture and foreign companies like Aviva-COFCO Life Insurance and MetLife-Sino-US United have near 30% "elimination rates." For companies at the bottom of the list, a low attrition rate may indicate the decline of a company's insurance distribution channel: there are no agents left to lose. This is a more concerning scenario.
Comments