According to a research report released by Huachuang Securities, listed insurance companies generally saw substantial growth in net profit attributable to shareholders in the first half of 2026, with China Life standing out and the sector moving in tandem with the equity market. However, during the first six months, the insurance segment continued to decline due to liquidity conditions and the "siphoning effect" of tech stocks. Since the second half of the year, the market has shifted from a "K-shaped" to a "rebalancing" pattern, and the insurance sector has already started to recover.
At present, most insurers' valuations sit below the 50th percentile of their ten-year range, suggesting that pessimistic expectations may have been fully priced in and that the bottom value is becoming increasingly evident. In the short term, the sector faces relatively high earnings base pressure in the third quarter. Over the long term, although the net investment yield remains on a downward trajectory, optimized liability costs are offsetting interest spread pressures. The risk of "interest spread losses" is expected to gradually converge, and the ability to manage both assets and liabilities is projected to improve continuously, driving PEV valuation recovery. For property and casualty insurance, risk reduction management systems are lowering loss ratios, strict industry regulation is promoting expense ratio optimization, and COR improvements are steadily lifting ROE and supporting PB gains.
Life Insurance: Dividend Insurance Transformation Deepens, Individual Agency Channels See Broad Recovery
In the first half of 2026, all listed insurers reported positive NBV growth, with China Life, Sunshine Insurance, CPIC, New China Life, and Ping An maintaining double-digit increases. The drivers of this growth differ: China Life is driven by both volume and quality, Sunshine Insurance, Ping An, and Taiping are volume-led, while CPIC, New China Life, and PICC are price-led. By channel, individual agency businesses have broadly recovered, with all seven listed insurers posting positive new policy growth. The bancassurance channel, however, shows significant divergence, likely due to intensifying channel competition and expense controls. In terms of product structure, New China Life, CPIC, and Taiping have seen substantial increases in the share of new dividend insurance policies. The industry's dividend insurance transformation is deepening, and new policies are gradually diluting the cost pressure of existing policies.
Property and Casualty Insurance: COR Generally Improves, Auto Insurance Growth for Major Players Slows
In the first half of 2026, premium growth in the property and casualty insurance industry slowed overall. Taiping and Ping An outperformed their peers, PICC and CPIC recorded slight increases, while Sunshine Insurance faced downward pressure due to the deliberate reduction of guarantee insurance. By line of business, auto insurance growth slowed for most companies except Taiping. Non-auto insurance showed divergence, with Ping An standing out due to strong growth in health and accident insurance. From a profitability perspective, all listed insurers except Taiping saw improved COR, with PICC leading its peers. Auto insurance COR improved across the board, while non-auto insurance performed unevenly, with liability insurance remaining the primary drag. The effects of the "reporting and execution alignment" policy in non-auto insurance are expected to become more apparent.
Investment: Increased Equity Allocations in the First Half, Most Investment Returns Rose
In the first half of 2026, the long-term interest rate center continued its downward trend, putting pressure on net investment yields across the board. Against the backdrop of a structural equity market, insurers actively seized investment opportunities, leading to increases in total investment returns for most companies. In terms of asset allocation, listed insurers continued to increase their equity holdings, with the combined proportion of stocks and funds generally rising. Changes in bond allocations were mixed. Under accounting classification, the proportion of FVOCI in stock allocations varied, likely reflecting different equity strategies among insurers, while the proportion of FVTPL in bond portfolios mostly declined. Following the implementation of new asset-liability management regulations, insurers are expected to focus more on a strategy of "dividend stocks as a foundation, growth stocks for excess returns" in their equity allocation.
Risk warning: Declines in long-term interest rates, equity market volatility, transformation underperformance, and frequent natural disasters.