Insurance stocks offer dividend yields above the market average, providing clear allocation value due to their high-dividend attributes. However, future performance of the sector is ultimately tied to insurers' profitability and earnings, with equity market volatility being a core influencing factor.
Recently, New China Life Insurance Co., Ltd. surged by the daily limit and China Life Insurance Company Limited once rose over 9%, drawing market attention to these established insurance stocks.
On June 26th, with the review of New China Life's 2025 profit distribution plan, the "cash bonuses" for the five A-share listed insurers for the 2025 fiscal year are set to be finalized. Overall, these five insurers plan to distribute cash dividends totaling approximately 1.024 trillion yuan for 2025, a year-on-year increase of 12.78%, representing an increase of 11.605 billion yuan from 2024. Notably, this marks the first time the annual cash dividend total for listed insurers has exceeded one trillion yuan.
Specifically, Ping An Insurance (Group) Company Of China, Ltd. has increased its total dividend for 14 consecutive years, with its 2025 total reaching a high of 48.891 billion yuan, a growth of 5.9%. China Life Insurance Company Limited recorded the highest growth rate at 31.7%, with a total dividend of 24.195 billion yuan. The total dividends for China Pacific Insurance (Group) Co., Ltd., People's Insurance Company (Group) of China Limited, and New China Life Insurance Co., Ltd. were 11.063 billion yuan, 9.729 billion yuan, and 8.516 billion yuan, with growth rates of 6.5%, 22.2%, and 7.9% respectively.
Looking at the Hong Kong market, AIA Group Limited's 2025 dividend per share is 193.08 Hong Kong dollars, a 10% increase year-on-year. China Taiping Insurance Holdings Company Ltd.'s 2025 total dividend reached 4.421 billion Hong Kong dollars, setting a new record high and representing a massive 251.4% increase from the 2024 total. Sunshine Insurance Group Company Limited's total 2025 dividend was approximately 2.185 billion yuan, flat compared to the previous year.
Against the backdrop of this trillion-yuan cash dividend distribution, the market is focused on whether insurance stocks can stage a counteroffensive and whether the dividends can be sustained. Industry insiders note that, firstly, insurance stocks offer dividend yields in the medium-to-high range. Secondly, the overall performance growth of the insurance sector in recent years and its relatively significant investment returns in the capital markets give insurance stocks investable characteristics. However, they believe future dividends for insurance stocks will still depend on the companies' future profitability and performance, which will be significantly influenced by capital market conditions.
From the perspective of the broader capital market environment, driven by policy guidance and market development, A-share listed companies are strengthening their efforts to reward investors with "real money," marking a deeper transformation of the capital market from emphasizing financing to emphasizing returns.
From a policy standpoint, the new "National Nine Articles" in April 2024 emphasized "strengthening supervision of cash dividends from listed companies." In November of the same year, the China Securities Regulatory Commission (CSRC) issued the "Supervisory Guidelines for Listed Companies No. 10 – Market Value Management," encouraging listed companies to formulate and disclose medium to long-term dividend plans. In October 2025, the CSRC revised and issued the "Code of Corporate Governance for Listed Companies," encouraging companies to increase the frequency of cash dividends when profit distribution conditions are met.
Backed by Over 400 Billion Yuan in Profits
The confidence behind the substantial dividends from listed insurers stems most critically from profitability. Looking at the 2025 performance of the listed insurers, the five A-share companies—China Life, Ping An, PICC, CPIC, and New China Life—collectively achieved a net profit attributable to shareholders of 425.291 billion yuan, an increase of over 70 billion yuan from 2024, representing growth of 22.4%. This follows the record high set in 2024, reaching a new level.
An analysis suggests that in 2025, alongside the downward adjustment of assumed interest rates for new business and the product shift towards floating-rate products, capital market performance was also relatively strong. This led to outstanding profit performance for insurance companies, with some room in solvency margins, thus providing a stronger foundation for dividends.
On the other hand, the "National Nine Articles" proposed requirements for multiple annual dividends and interim dividends. Also, due to market value management needs, listed insurers are showing a trend towards regularizing interim dividends and distributing dividends on a large scale. From the perspective of dual dividend arrangements, insurance companies are not necessarily paying out more in total dividends but are adjusting the timing of payments. This reduces the "pulse-like" impact of a single year-end payout on the insurers' capital and solvency. For investors, it smoothens cash inflows, improves the predictability of returns, and is also beneficial for market value management.
Regarding the rationale behind the dividend policy, the President of People's Insurance Company (Group) of China Limited responded at the 2025 annual results press conference: First, to coordinate the differences between the old and new accounting standards. The 2025 dividend continues to be based on the old standards, with PICC Group maintaining a payout ratio above 30% and PICC Property & Casualty Company Limited above 40%. Second, PICC Group's dividend funds mainly come from profit distributions of its subsidiaries. Currently, there is a significant difference in profits under the old and new standards for the insurance subsidiaries. Simply using the net profit figure under the new standards as the basis for dividends would directly affect the core capital strength and solvency adequacy ratio of the insurance subsidiaries, ultimately impacting the long-term stability and sustainability of the dividend policy. Therefore, the company needs to fully consider capital constraints.
While the trillion-yuan dividend scale is impressive, investors measure return levels by looking at the dividend yield. According to an analysis, due to net profit growth, the dividend per share for listed insurers generally increased, with China Taiping Insurance Holdings Company Ltd. showing a significant rise. Dividend returns for listed insurers in 2025 generally grew. Except for Sunshine Insurance Group Company Limited, which was flat year-on-year, the increases in dividend per share for Ping An, CPIC, and AIA were concentrated in the 5%-10% range. The increases for China Life, PICC Group, and PICC P&C were 32%, 22%, and 26% respectively, while China Taiping increased by 251% year-on-year, significantly higher than other listed peers.
However, the analysis points out that insurance companies' short-term profits are more volatile under the new accounting standards. Dividend levels need to be determined after comprehensive consideration of long-term operations and shareholder returns. Currently, most insurers' dividend policies primarily aim to maintain stable dividend per share performance rather than a fixed payout ratio.
Can High Dividends Be Maintained?
Another market concern is whether the high dividends from listed insurers can continue.
Industry insiders state that future dividends for insurance stocks will still depend on the insurers' future profitability and performance. The core factor for insurer profitability is investment returns, so future dividends will be significantly influenced by capital market performance.
Looking at the 2025 performance of listed insurers, they clearly benefited from the rise in the equity market. Specifically, in 2025, New China Life Insurance Co., Ltd. achieved a total investment yield of 6.6%, up 0.8 percentage points year-on-year, ranking among the top in the industry. China Life Insurance Company Limited realized total investment income of 387.694 billion yuan, an increase of 79.443 billion yuan year-on-year, with a total investment yield of 6.09%. People's Insurance Company (Group) of China Limited achieved total investment income of 92.323 billion yuan, a year-on-year increase of 12.4%, reaching a historical best level, with a total investment yield of 5.7%.
From the perspective of listed insurers' management expectations, the Deputy General Manager and Chief Financial Officer of Ping An Insurance (Group) Company Of China, Ltd. stated that the steady increase in the company's dividend payout ratio in recent years also reflects the transformation of the company's development stage: the core insurance business has shifted from the earlier "scale expansion" to "high-quality development," and capital consumption has gradually stabilized. Implementing a consistent and stable dividend policy at this time can solidify market confidence in the company's profit quality and cash flow stability, and better attract long-term value funds. "Ping An has full confidence in future earnings growth and the sustainability of its dividend policy."
The President of PICC Group stated that striving to achieve long-term stable growth in dividend per share is a consistent goal of the company. The company will deepen its focus on the core insurance business, continuously improve quality and efficiency, strengthen liability management, enhance performance assessment, and exert efforts from both the liability and investment sides to achieve sustained and stable profit growth, thereby rewarding the trust and support of investors.
The Board Secretary of China Pacific Insurance (Group) Co., Ltd. mentioned that investors can reasonably anticipate potential dividend returns by tracking and assessing the medium to long-term development potential of insurers. The company's management team can also focus more on shaping endogenous development momentum, consolidating the foundation for shareholder returns by strengthening capabilities in acquiring sustainable business, releasing profits, and controlling risks. At the same time, they can appropriately realize the positive contribution of current investment performance, sharing the company's operational and investment results with investors.
Looking ahead, what is the investment value of insurance stocks? According to analysis by a senior market participant, insurance companies are capital-intensive enterprises that need to continue expanding investment. Therefore, while their dividends are good, they are not the highest across all industries, with dividend yields in the medium-to-high range. Because overall economic activity is relatively low, it is more difficult for the insurance industry to expand business, and indicators like new premiums are not as strong as before. Consequently, whenever such news is disclosed, it affects stock prices.
The participant believes that from an investor's perspective, one should look at the intrinsic investment value of insurance stocks and focus on dividend yield. On the other hand, one should also consider the growth potential of insurance stocks. In recent years, the overall performance growth of the insurance sector and its relatively significant investment returns in the capital markets give insurance stocks investable characteristics. However, the participant notes that insurance stocks themselves have relatively large floating capital, and their stock price activity is generally not particularly high.
Regarding the future trend of insurance stocks, one securities firm is optimistic about the investment opportunities in the insurance sector. Recent valuation fluctuations in insurance stocks are mainly affected by capital flows. In the short term, equity investments in the second quarter are expected to improve significantly, which is likely to drive mid-year profits back to growth. From a medium to long-term perspective, the trend of improving profit margins driven by policy price increases and premium scale expansion has not changed. The long-term growth potential of insurance has not been fully priced in, and a new stage of value re-rating may begin.
Another securities firm believes that the insurance sector has seen an overall pullback due to capital flow disturbances. However, from a fundamental perspective, insurance sector profits in the second quarter are expected to grow significantly. Once the market refocuses on the logic of the second-quarter earnings reports, insurance stocks are expected to see valuation recovery. Since April, the overall market has warmed up. It is expected that insurers' investment returns in the second quarter will improve significantly, driving high growth in net profit. Simultaneously, the liability side continues to show high prosperity, further solidifying the foundation for earnings growth. The firm is optimistic about the stock price recovery of insurance stocks driven by the high earnings growth in the second quarter.
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