Insight into the annual reports of five major insurance companies: How to add value to equity investments

The annual report season for A-share insurance stocks has come to an end. A horizontal analysis of the investment situation of the five major insurance companies in 2025 shows that in a low-interest-rate environment, "seeking returns from equities" has transformed from a slogan and vision into reality. According to the performance reports of various insurance companies for 2025, China Life, PICC Group, NCI, CPIC, and Ping An collectively achieved a net profit attributable to shareholders of over 420 billion yuan, a year-on-year increase of more than 20%. Analyzing the profit composition, the contribution of investment income, especially from equity investments, should not be underestimated. At the same time, each insurance company is increasing its equity investments: on one hand, the scale of investments and the proportion of positions are rising, and on the other hand, investment strategies are being upgraded, evolving towards refined management. Management from several insurance companies stated that they will place great importance on the allocation value and strategic significance of equity assets within the overall investment portfolio, actively responding to the policy direction of mid- to long-term capital entering the market, and increasing efforts to embrace the equity market. Additionally, in light of their own asset-liability management needs and changes in the market environment, they will comprehensively consider the allocation rhythm and scale of equity assets, and enhance the resilience of investment portfolios and the sustainability of returns through diversification and multi-faceted strategies. Increase in Equity Positions In a low-interest-rate environment, the bulk of insurance capital allocation in fixed-income assets is unable to cover liability costs, making the increase in equity assets a necessary option. A core change highlighted in the 2025 annual reports of insurance capital investments is the increase in equity assets. Industry insiders believe that this is both a result of regulatory guidance and a choice that aligns with market trends. From the data, the equity investments of the five major insurance companies have not only increased in scale but also in proportion within their portfolios. By the end of 2025, the total investment assets of the five major insurance companies exceeded 20 trillion yuan, with stock investments amounting to 2.5 trillion yuan, an increase of over 1 trillion yuan compared to the end of 2024, representing a growth rate of 75%; the proportion of stock assets in total investment assets rose from 7.8% to 12.2%, an increase of 4.4 percentage points. When combined with equity fund investments, the trend of increasing equity positions becomes even more pronounced. For example, China Life's public market equity investment scale surpassed 1.2 trillion yuan, with an allocation ratio increasing by nearly 5 percentage points; Ping An's stock and equity fund investment balance reached 1.24 trillion yuan, with an allocation ratio increasing by 9.3 percentage points to 19.2%. The recovery of the capital market in 2025 has brought substantial returns to the equity increases of insurance capital, opening a favorable profit window and providing upward elasticity to performance—many insurance companies achieved their highest total investment return rates in years, with NCI reaching 6.6% and China Life approximately 6.1%. PICC Group President Zhao Peng introduced that in 2025, PICC Group net increased its A-share positions by over 40 billion yuan, with the proportion of secondary market equities rising by 4.3 percentage points to 13.3%, and the amount invested in stocks and funds increasing to over 250 billion yuan. The company's TPL (fair value changes included in current profit and loss) stock and stock fund comprehensive return rate reached 30.4%, while the OCI (fair value changes included in other comprehensive income) stock comprehensive return rate reached 19.2% "We strategically increased our equity ratio by nearly 5 percentage points during the market downturn in 2025, particularly focusing on technology stocks that represent China's new productive forces. The primary reason for our performance improvement is that our investments align with historical trends and keep pace with the tide of the times," said Liu Hui, Vice President of China Life. "In our equity investments for 2025, we seized structural opportunities in the market and captured the main upward trend of growth style, achieving a nearly 30% comprehensive investment return on TPL equity." Refined Management of Equity Investments Faced with an increasingly complex market environment, the management of several insurance companies believes that future equity investments need to be managed more meticulously in response to changing circumstances. "Equity investment is the key to stabilizing and enhancing investment performance. We will adhere to a steady approach while seeking progress, continuously focusing on the allocation of OCI high-dividend stocks, while also concentrating on growth opportunities embedded in the 14th Five-Year Plan, strengthening research on key industries and sectors, reasonably planning TPL stock allocation, and building a long-term performance-stable, competitive, and more balanced equity investment portfolio," said Cai Zhiwei, Vice President of PICC Group, regarding the direction of future equity investments. "We will effectively increase the proportion of public market equity investments," said Su Gang, Vice President of CPIC. CPIC will persistently adhere to a core strategy of dividend value, focusing on listed companies with both high dividend distribution capabilities and stable growth prospects, using such quality assets as the core of its base. At the same time, it will enhance the overall drawdown resistance of the equity investment portfolio and build a more comprehensive satellite strategy system covering key areas such as technological innovation, health care, and consumer goods. Guo Xiaotao, Co-CEO of Ping An, stated that Ping An's core investment philosophy this year is "to seek certainty amid uncertainty." "For patient capital over the long term, the most important thing in investment is to align with the direction of national economic development." He noted that new productive forces, infrastructure, healthcare and elderly care, a strong financial nation, and a healthy China are all certain factors, which are important directions for Ping An's long-term allocation. "We reduce the overall sensitivity of the portfolio to single market fluctuations through scientific asset allocation and diversified investments. We will reasonably utilize the asset classification mechanism under the new financial instrument standards to properly manage the impact of fair value fluctuations of equity assets on the profit and loss statement," said Chen Yijiang, President of Xinhua Asset. He emphasized that they will actively create excess returns by selecting excellent external managers, fully utilizing market forces to diversify risks, and reducing the volatility impact of single strategies, while focusing on enhancing multiple investment research capabilities to strive for excess returns amid volatility through active management. Steadily Advancing in Balance Insurance capital is increasing its efforts to embrace the equity market, while also striving to mitigate the impact of capital market fluctuations on profit and loss statements through diversified tools and allocation strategies in the context of new accounting standards amplifying profit volatility effects. Management from several insurance companies stated that it is necessary to enhance the overall return capability and resilience of the portfolio by broadening asset types and enriching investment strategies. Liu Hui noted that the company has always placed great importance on alternative investments and equity investments. "In the past two years, our alternative investments have mainly been in debt-type financial products. At the same time, we have also participated in equity and private equity fund investments, as well as investments in REITs and ABS." Alternative investments are an important tool for us to cope with the challenges of the overall low interest rate environment. The company will continue to enhance its alternative investment capabilities, allowing it to play a more significant role in the investment portfolio." "In 2026, we will continue to increase the development and allocation of innovative alternative products such as asset securitization, and focus on areas related to national key strategies and the development of insurance business by leveraging the private equity funds already established and planned by PICC Group, actively seizing investment opportunities embedded in the construction of strategic emerging industries and modern industrial systems," said Cai Zhiwei. Chen Yijiang stated that NCI will continue to strengthen its efforts in diversified asset allocation. The long-term investment attributes of insurance funds naturally align with alternative investments, equity investments, and other asset classes. The company will actively leverage the advantages of patient capital to share the long-term investment returns brought by economic transformation and upgrading while serving national strategies and the development of the real economy. Diversified allocation helps reduce the correlation between various asset classes, enhance the risk-return ratio of the portfolio, and improve the sustainability and stability of investment performance