China Life sees sharp jump in earnings

China Life Insurance Co Ltd, the country's largest life insurer, reported a sharp jump in annual profit for 2025, fueled by strong investment returns and a shift toward higher-value products, although premium growth slowed amid an industry-wide transition.

Net profit attributable to shareholders rose 44.1 percent year-on-year to 154.08 billion yuan ($21.2 billion) in 2025, while total premium income rose 8.7 percent to 729.9 billion yuan, the company said in its annual results.

The insurer's total investment income climbed 25.8 percent to 387.7 billion yuan, with the overall investment yield rising to 6.09 percent, one of its strongest performances in recent years.

"As one of the world's largest life insurers, China Life achieved a 'full harvest' in 2025 with stronger growth momentum, improved resilience and expanded customer protection," Cai Xiliang, the company's chairman, said during the earnings briefing.

China Life remained the dominant player in China's life insurance market. Total assets rose to 7.59 trillion yuan, while investment assets reached 7.42 trillion yuan. Embedded value — a key measure of long-term profitability for insurers — climbed to 1.47 trillion yuan.

The company also maintained solid capital buffers, with its core solvency ratio at 128.77 percent and its comprehensive solvency ratio at 174.01 percent, comfortably above regulatory requirements.

However, the company reported a net loss of 13.73 billion yuan in the fourth quarter, mainly due to short-term volatility in stock and bond markets, which executives said reflected market swings rather than a structural shift.

Investment performance was the main driver of the profit surge as the insurer increased its exposure to equities and captured market opportunities during the year.

Liu Hui, vice-president of the company, said China Life raised its equity allocation by nearly 5 percentage points in 2025, bringing publicly traded equity investments to more than 1.2 trillion yuan.

China Life also expanded holdings in technology-related stocks tied to China's emerging industries while maintaining large allocations to long-term bonds to match its long-duration liabilities, she said.

The company currently holds around 3 trillion yuan of long-dated bonds, which helps stabilize returns amid declining interest rates.

At the same time, overseas exposure remains limited. Liu said China Life's offshore investments account for less than 0.9 percent of total assets, helping shield the firm from global geopolitical volatility.

China Life also accelerated a shift toward participating and market-linked insurance products, which tie policyholder returns partly to investment performance.

The transition helped lift its new business value by 35.7 percent to 45.75 billion yuan, the fastest pace since 2017, outperforming most peers in China's life insurance sector.

Executives said the company is also expanding equity investments in emerging industries as part of its long-term strategy.

Through direct investments and private equity funds, China Life has backed companies in sectors including artificial intelligence, semiconductors and healthcare, as well as renewable energy projects.

The insurer said earlier this year it committed 4 billion yuan to a technology innovation fund, targeting advanced manufacturing, semiconductors and AI.

Going forward, the company said it plans to push ahead with digital transformation, asset-liability management reforms and expansion of healthcare and eldercare services, as China's aging population drives demand for insurance and retirement products.

China Life has already participated in more than 70 pilot programs for long-term care insurance across China and plans to deepen its presence in the sector.

Its push in the sector comes as China issued guidelines on Wednesday to build a nationwide long-term care insurance system, aiming to meet basic care needs for people with limited ability to care for themselves.

Executives said the insurer expects steady growth in 2026 as it launches a series of reforms tied to the outline of China's 15th Five-Year Plan (2026-30).

lijing2009@chinadaily.com.cn