As 2026 begins, insurance stocks have been on a steady climb, with many even hitting record highs. Concurrently, influenced by factors such as persistently low deposit rates, insurance product sales are experiencing a mini-boom, with many sales agents feeling so confident they are already "kicking back" to wait for the Lunar New Year.
The new year started with a bang for insurance stocks. Among them, New China Life Insurance has taken the lead, with its shares rising 17.78% year-to-date (as of January 16).
Extending the timeline further, the five major listed insurers have all seen double-digit gains over three months. Ranked from highest to lowest, the increases are: New China Life Insurance (23.83%), China Pacific Insurance (20.24%), Ping An Insurance (17.07%), China Life Insurance (16.44%), and People's Insurance Company (Group) of China (10.32%).
The prevailing market view is that a bull market is a key driver for insurance stock performance. Soochow Securities cited historical data showing that since 2014, the insurance sector has experienced five typical upward trends, occurring in 2014-2015, 2017, 2019, 2020, and 2022-2023. This pattern suggests that stock market rallies are the most direct and effective short-term catalyst.
From an operational performance perspective, strong insurance sales coupled with substantial investment gains have also led investors to place high hopes on insurance stocks.
The insurance sales sector is welcoming a spring season. Over the past few years, the industry grappled with multiple pressures including agent attrition, slowing liability-side growth, and investment setbacks, all under the shadow of spread loss risks, making times tough. Now, the situation is changing.
"After New Year's Day, it took less than four days for our marketing channels to exceed 30 billion yuan in first-year premiums underwritten for January! Surpassing the entire first quarter of 2025," an employee of an insurance company boasted on social media. Other industry insiders also revealed online: "I asked several peers, and they all said products are selling well; they're already relaxing and waiting for the New Year holiday."
"The spring for insurance sales has arrived, driven by a confluence of factors from policy, products, and demand," a veteran insurance professional stated. On the policy front, multiple rounds of reductions in the assumed interest rate have lowered liability costs. On the product side, participating insurance has played a major role. The demand side is even more straightforward: low interest rates have made "stable happiness" scarce for residents, and insurance products恰好 address the triple demand for safety, long-term value, and certainty, naturally leading to rising sales.
Multiple data points clearly indicate that the insurance industry's time to shine has come. Data on the insurance industry's operations released by the National Financial Regulatory Administration shows that as of November 2025, the industry's total original premium income nationwide reached 5.76 trillion yuan, 0.4 trillion yuan more than the 5.36 trillion yuan recorded in the same period last year.
Drilling down to individual companies, the performance figures are equally impressive. For instance, in the first three quarters of 2025, China Life Insurance's total premium scale reached 669.645 billion yuan, a record high for the period, with total premiums, new business premiums, and renewal premiums all achieving double-digit growth. The renewal premium growth rate hit its highest level for the same period since 2021. Looking at New China Life Insurance, its first-year regular premium for long-term insurance from individual agent and bancassurance channels increased by 49.2% and 32.9% year-on-year respectively, driving a 50.8% increase in new business value.
Multiple industry insiders stated that participating insurance, a key focus area for insurers, is the crucial support behind this premium growth.
Participating insurance is a type of floating-return product that combines protection and investment. As assumed interest rates continue to be lowered, the advantage of its "guaranteed base + floating dividend" return structure becomes increasingly apparent. For insurers, its guaranteed rate is low, reducing pressure from rigid liabilities. For policyholders, it provides basic protection while also offering potential economic returns.
"Overall, the rise of participating insurance reflects the profound impact of changing interest rate environments on both insurance product design and consumer behavior," said Mo Kaiwei, a researcher at the China Local Financial Research Institute.
Looking at the main products promoted by listed insurers for their 2026 kick-off campaigns, the design type is uniformly participating insurance, primarily participating whole life insurance and participating annuities. Examples include China Life's Xinhongfu Pension Annuity (Participating), Ping An's Yuxiang Jinyue Whole Life Insurance (Participating), and China Pacific Insurance's Shengshi Hongyun Whole Life Insurance (Participating). The assumed interest rate for these products is 1.75%, with illustrated rates (hypothetical interest rate indicators used by insurers for future return projections) mainly set at three tiers: 3.5%, 3.75%, and 3.9%.
In contrast, bank deposit rates have been successively cut, 5-year large-denomination certificates of deposit have been widely withdrawn, and short-term large-denomination CD rates have even entered the "0% range."
It is precisely against this backdrop that numerous insurers are setting their sights on savers considering "moving their deposits." Huatai Securities estimates that the scale of time deposits maturing in 2026 with terms over one year is about 50 trillion yuan, an increase of 10 trillion yuan from 2025. This massive 50 trillion yuan in "unlocked" funds could either remain in savers' accounts or flow into stocks, funds, bank wealth management products, and the insurance sector. Insurers hope to capture this wave of liquidity with participating insurance products.
On one hand, optimized product structures are driving strong kick-off sales for insurance companies. On the other hand, data growth from bancassurance channels is also significantly boosting insurer confidence. Ping An reported that bancassurance, community financial services, and other channels contributed 35.1% to the new business value of Ping An Life Insurance. China Pacific Insurance stated that its life insurance subsidiary achieved scale premiums of 58.310 billion yuan in the first three quarters of 2025, a year-on-year increase of 63.3%.
Many savers visiting banks are increasingly noticing that selling insurance has become routine. "My relationship manager told me that interest rates will likely fall further, and wealth management returns will worsen, suggesting I consider some long-term allocations. Then, he sent me several products for reference—all of them were insurance products," one sapper remarked with resignation.
Strong investment performance is driving impressive financial results. However, judging an insurance company's operational quality requires more than just premium growth; liability management capability truly determines its long-term profitability and risk resilience.
In their financial reports for several consecutive quarters, insurers' investment performance has impressed the market. Soochow Securities statistics show that the total investment income of listed insurers in the first three quarters of 2025 was 887.5 billion yuan, a year-on-year increase of 35.64%. Notably, the third quarter alone contributed 542.4 billion yuan, surging 66.64% year-on-year.
This performance is closely related to insurers' increased allocation to the stock market.
Interim reports for 2025 showed significant growth in the scale of stock + equity fund investments for the five major insurers. China Life's allocation reached 970.8 billion yuan, up 35.7% year-on-year; Ping An's reached 778.4 billion yuan, a sharp 75.9% increase. People's Insurance Company (PICC), China Pacific Insurance (CPIC), and New China Life Insurance saw increases of 32.1%, 25.4%, and 22.6% respectively. Furthermore, the proportion of stock + equity fund investments relative to total assets exceeded 10% for all five insurers, with New China Life having the highest ratio at 18.7%.
Third-quarter reports did not disclose new changes to investment portfolios. However, boosted by improved investment returns, their net profits for the first nine months all achieved exceptionally high growth. China Life and New China Life grew the fastest, increasing 60.5% and 58.9% year-on-year respectively, while PICC, CPIC, and Ping An grew 28.9%, 19.3%, and 11.5%.
Recall that at the end of 2023, all five listed insurers were mired in a collective decline in net profit. In less than two years, the stock market surge has completely turned their performance around.
Some insurers have openly acknowledged this. When explaining the reasons for its high profit growth, New China Life stated that the Chinese capital market stabilized and improved in the first three quarters of 2025, and the company's investment income in Q3 2025 saw a significant year-on-year increase on top of the high growth in Q3 2024. Ping An also attributed its performance changes to "fluctuations in the capital market." China Life said that since the beginning of the year, the stabilizing and improving trend of the stock market has been continuously reinforced. The company actively promoted the entry of medium- and long-term funds into the market, seized market opportunities to decisively increase equity investments, made forward-looking layouts in areas related to new quality productive forces, and continuously optimized its asset allocation structure, leading to a substantial year-on-year increase in investment income.
What commonalities and differences exist in the investment strategies of insurance companies?
During the 2025 interim results briefings, senior executives from various insurers provided insights and direction. Liu Hui, Vice President of China Life, stated they would continuously monitor sector rotation within the rising market, including investment opportunities in technological innovation, consumer manufacturing, advanced manufacturing, new consumption, and companies focused on overseas expansion. Qin Hongbo, Vice President of New China Life, said the company would place greater emphasis on the allocation value of high-dividend stocks and actively support strategic emerging industries. Zhao Peng, President of PICC, stated that in their next steps, for investment targets aligned with national strategic direction, demonstrating stable long-term operational performance, and possessing strong development potential, they would increase investment力度 through methods like private placements, significant share acquisitions, and strategic investments at appropriate times.
A financial commentator noted that insurers increasing equity market investment is essentially an inevitable choice in a low-interest-rate environment to "exchange risk for return and duration for space," especially since the state encourages insurance capital to enter the market. However, regulatory relaxation is premised on ensuring the safety of the large capital pool, guiding insurance funds to support the real economy more efficiently rather than blindly chasing high risk and high returns. Therefore, the balance between enhancing returns and risk prevention is precisely the core metric for evaluating an insurer's investment capability.
Can the strong performance continue through 2026?
Regarding the future trend of insurance stocks, Mo Kaiwei holds an overall optimistic attitude. He stated, "Insurance institutions are experiencing robust premium growth, coupled with improved business quality and strong support from the investment environment. Valuations are within a reasonable range, and the upward trend is expected to continue. Furthermore, since 2025, over a trillion yuan in incremental insurance capital has entered the stock market, and the scale in 2026 might be even larger, especially as adjustments to solvency rules could further relax capital consumption for equity investments, enhancing allocation flexibility."
However, an undeniable fact is that, in the long term, the risk of spread losses in the insurance industry has not been fundamentally resolved. While insurers talk loudly about expanding stock market investments, their investment portfolios remain dominated by bond-based fixed income. As the anchor for bond market pricing, the 10-year government bond yield is currently below 2%, stabilizing at a low level around 1.8%. Yan Lingyi, a fixed income analyst at Zhongtai Securities, predicts the 10-year government bond yield in 2026 may fluctuate between 1.7% and 2.1%.
On the product optimization front, the heavily promoted participating insurance is seen by some policyholders as having issues such as long capital return cycles and actual returns falling short of expectations. Some bank staff, when selling participating insurance, often compare it to savings deposits and overemphasize its "high returns," leading to consumer misunderstandings.
"It's undeniable that banks possess a broad customer base and mature sales channels, giving them a natural advantage in promoting insurance products. Selling insurance helps banks diversify their revenue sources, reduce reliance on traditional deposit and loan businesses, and thereby increase non-interest income," admitted an insurance client manager. Based on his experience, customers purchasing insurance through bancassurance channels often do so based on trust in the bank. However, bank sales staff tend to focus more on one-time sales rather than maintaining long-term customer relationships, which can ironically lead to lower customer satisfaction and renewal rates.
In Mo Kaiwei's view, relying solely on bank channels for growth breakthroughs is not a sustainable long-term strategy for insurance companies, as it is constrained by various factors. These include a singular product structure that struggles to meet diverse customer needs, and compressed profit margins from lowered assumed interest rates creating obstacles for incremental breakthroughs. "For insurance companies to enhance market competitiveness, they need coordinated efforts across multiple dimensions," he said. "They must formulate strategies based on industry characteristics and market trends, while simultaneously improving operational efficiency and risk management, leveraging their capital advantages and long-term investment functions, and enhancing customer experience and digital capabilities."
For investors focusing on insurance stocks, Mo Kaiwei advises them to pay close attention to financial indicators, market and competitive metrics, and macroeconomic indicators to conduct a comprehensive assessment of the investment value of insurance stocks.
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