In the final year of the "14th Five-Year Plan," China Life Insurance Company Limited achieved comprehensive success, with total premiums exceeding 700 billion yuan and net profit attributable to parent shareholders reaching 154 billion yuan. However, beneath this success, concerns have emerged: despite achieving full-year profitability, the company incurred a loss of 13.7 billion yuan in the fourth quarter, disrupting the positive trend of annual earnings. Since 2026, the company and its subsidiaries have repeatedly faced regulatory penalties, indicating ongoing compliance challenges.
Nevertheless, as the leading player in the life insurance industry, China Life Insurance continues to hold the top position, ranking first globally among life insurers in 2025. This raises the question: how has the industry leader managed to thrive despite facing dual pressures of short-term losses and compliance issues?
The company disclosed its 2025 annual report on March 26, revealing total premium income of 729.887 billion yuan by the end of 2025, an increase of 8.7% year-on-year. Total assets reached 7.6 trillion yuan, with total investment income amounting to 387.694 billion yuan and an investment return rate of 6.09%, marking the best performance in recent years.
Chairman Cai Xiliang stated during the earnings presentation that the company achieved outstanding results across multiple dimensions, including scale, value, growth, and quality, with several core indicators reaching historic highs.
In terms of premium business, the company’s operational structure showed significant optimization. The proportion of first-year regular premiums with a term of ten years or more increased to 58.5% of total first-year regular premiums. Among these, participating insurance products accounted for nearly 60% of first-year regular premiums in the individual insurance channel, serving as a key driver of new premium growth. Additionally, floating-yield products represented close to 50% of first-year regular premiums, with the figure rising to nearly 60% in the individual insurance channel.
Industry experts believe that China Life’s strong focus on floating-yield products has effectively enhanced the quality of its new business. As a result, the sensitivity of new business value to a 10% decline in investment returns improved by 9.1 percentage points year-on-year, narrowing to -16.4%. The duration gap also continued to shrink, strengthening the company’s resilience to interest rate fluctuations.
On the investment side, the company closely followed policy directions, actively positioning itself as "patient capital." In 2025, China Life achieved total investment income of 387.694 billion yuan, a significant increase of 25.8% year-on-year. The total investment return rate reached 6.09%, up 59 basis points from the previous year. However, net investment income declined by 1.0% to 193.795 billion yuan, affected by lower interest rates and a shortage of high-quality assets. Vice President and Chief Investment Officer Liu Hui commented, "Insurance investment involves long-term allocation; patient capital will navigate cycles through steady and profound strategies."
By the end of 2025, the company reported a net profit attributable to parent shareholders of 154.078 billion yuan, a robust increase of over 44% year-on-year. However, it was observed that the net profit for the first three quarters stood at 167.8 billion yuan. This implies that the company not only failed to generate profit in the fourth quarter but also recorded a loss of approximately 13.7 billion yuan.
President Li Mingguang explained that the sudden quarterly loss was primarily due to structural adjustments in the capital market during the fourth quarter, which led to a decline in the value of certain stocks and funds held by the company. He emphasized that such fluctuations are mostly temporary and reflect broader market conditions rather than the company’s long-term operational performance. In other words, the loss can be attributed to investment losses influenced by macroeconomic factors, unrelated to the underwriting side of the business.
Although a single-quarter loss is relatively rare among the five major listed insurers, it is not unique to China Life. Incomplete statistics show that The People's Insurance Company (Group) of China Limited also experienced a similar loss in the fourth quarter of 2025, though to a lesser extent of 176 million yuan. Historically, China Pacific Insurance encountered a single-quarter loss in 2008; Ping An Insurance experienced it twice; New China Life Insurance recorded three instances in 2008, 2015, and 2023; while China Life had previously faced similar situations in 2012 and 2018, making this the third occurrence.
In 2025, encouraged by policies promoting long-term investment, insurers generally increased their equity allocations. China Life notably expanded its holdings, purchasing 835.342 billion yuan in stocks, an increase of nearly 334.3 billion yuan year-on-year, and 421.842 billion yuan in funds, up 115.3 billion yuan from the previous year. Combined, the company’s additional investments in stocks and funds amounted to approximately 449.6 billion yuan compared to the prior year.
In terms of asset allocation, the proportions allocated to bonds, time deposits, and debt-type financial products remained relatively stable. However, the allocation to stocks and funds (excluding money market funds) rose from 12.18% at the end of 2024 to 16.89% by the end of 2025.
The significant correction in the A-share market during the fourth quarter of 2025, coupled with the company’s high equity exposure, directly impacted China Life’s investment performance, thereby affecting overall net profit.
From a long-term perspective, China Life’s total assets of 7.6 trillion yuan, a solid base of 3 trillion yuan in long-term high-quality fixed-income assets, and strategic investments in areas such as advanced productivity and healthcare continue to provide strong support for profit stability.
While operational performance demonstrates resilience, compliance remains a weak point. Since 2026, the company and its branches have faced a series of regulatory penalties, creating a stark contrast with its leading industry status.
An analysis of penalties issued in March reveals concentrated and typical violations. For instance, China Life’s Tonghua branch was fined 74,000 yuan for inadequate training of individual insurance agents and providing policyholders with benefits outside the insurance contract. The Shenzhen branch was penalized 260,000 yuan by the local regulatory bureau for false advertising and offering unauthorized benefits.
The Ledu branch was ordered to rectify issues related to "inducement in sales" and fined 55,000 yuan. The Wangqing branch was penalized 100,000 yuan for deceiving policyholders and providing extra-contractual benefits. Additionally, the company was fined 71,000 yuan for lax academic verification of individual agents and insufficient management of product seminars.
Furthermore, the State Administration of Foreign Exchange imposed a warning and a fine of 350,000 yuan on the company for violating foreign exchange account and registration regulations.
Most penalties were issued at the municipal and county levels, indicating that the company’s organizational framework—centered on group headquarters coordination and subsidiary collaboration—has encountered implementation discrepancies at the grassroots level. This exposes issues such as delayed supervision and post-violation penalties.
As the leading life insurer, "compliant operation" is a fundamental principle that China Life must uphold. Only by adhering to this can the company continue to soar freely and maintain its prominent position in the insurance sector.
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