What are the investment directions for equity investments in 2026, and why was there a loss in Q4 2025... During this press conference, China Life provided the answers.

Daily Economic News Reporter | Yuan Yuan Daily Economic News Editor | Huang Sheng

As the first listed insurance company to disclose its 2025 performance this year, China Life Insurance has set an impressive start for listed insurance companies.

On the evening of March 25, 2026, China Life Insurance (SH601628, stock price 37.74 yuan, market value 1.07 trillion yuan) released its 2025 performance report. The report shows that in 2025, China Life’s total premiums reached 729.887 billion yuan, an 8.7% increase year-over-year; net profit attributable to the parent company shareholders was 154.078 billion yuan, up 44.1% year-over-year.

China Life Chairman Cai Xiliang praised the company’s achievements in 2025 as a “full house of red” at the earnings release. In his view, this performance not only reflects China Life’s economic value but also demonstrates its social value.

Image source: Tu Yinghao Photography

“2026 is the first year of the ‘14th Five-Year Plan’ start. We are confident and capable of maintaining steady growth, continuing to optimize our business structure, enhancing our value creation ability, and advancing the quality and sustainability of growth based on reaching new highs in multiple indicators,” Cai Xiliang said.

However, market attention is not only on the “full house of red” data but also on issues such as the allocation of insurance funds in 2026 and why there was a loss in the fourth quarter of 2025. On March 26, 2026, China Life’s management provided answers during the earnings conference.

The high net profit growth in 2025 is closely related to its high investment returns. The annual report shows that as of December 31, 2025, China Life’s investment assets totaled 74.237 trillion yuan, a 12.3% increase from the end of 2024. The allocation ratios for bonds, fixed deposits, and debt-type financial products remained stable, while the proportion of stocks and funds (excluding money market funds) increased from 12.18% at the end of 2024 to 16.89%. The main reason is that the company seized market opportunities and decisively increased equity investments, significantly expanding its equity investment scale.

In 2025, China Life achieved a total investment return of 387.694 billion yuan, an increase of 79.443 billion yuan from 2024; the total investment yield was 6.09%, up 59 basis points from the same period last year.

“2025 was the best year for our investment performance in recent years, with a total investment yield of 6.09%, a 25.8% increase year-over-year. This high growth was achieved on a high base,” said Liu Hui, Vice President and Secretary of the Board of China Life. He attributed this performance to China’s high-quality economic development, the stabilization and warming of capital markets, and the company’s long-term adherence to value and prudent investment strategies. Additionally, it was due to accurate market analysis and flexible tactical operations.

Regarding investment strategies, Liu Hui said that equity investment is the key to boosting returns, fixed income is the ballast for stable income, and alternative investments are the growth engine for diversified gains. In 2025, China Life actively promoted the entry of medium- and long-term funds into the market, seized favorable market opportunities, strategically increased equity proportion by 5 percentage points, and focused on high-quality assets with new productivity and high dividends. The overall equity investment exceeded 1.2 trillion yuan. Meanwhile, the company maintained steady long-term fixed income allocations, accumulating 3 trillion yuan in high-quality long-term assets. In a low-interest-rate environment, it further strengthened strategic allocation and active management, continuously optimized asset-liability matching, and solidified its fixed income base. Furthermore, leveraging the advantages of long-term and patient capital, the company increased product and strategy innovation, building a comprehensive alternative investment ecosystem across all asset classes and life cycles, with total alternative investments exceeding 1 trillion yuan, opening long-term growth space.

Regarding the 2026 equity investment strategy, Liu Hui said China Life will focus on three major directions: first, AI and semiconductors; second, health and biopharmaceuticals; third, green energy and new infrastructure, with deep cultivation in wind power, nuclear power, and new energy storage. “The ‘14th Five-Year Plan’ has opened a broad strategic space for insurance funds’ equity investments. The nine strategic emerging industries and six future industries represent the core directions of China’s economic transformation and are fertile ground for future core assets. Wherever China’s future lies, our long-term funds will flow there,” Liu Hui stated.

Despite high growth in various indicators, due to intensified fluctuations in the stock and bond markets in the fourth quarter of 2025, the fair value change gains and losses narrowed significantly, resulting in a net loss of 13.726 billion yuan for that quarter.

In response, China Life President Li Mingguang said that most of the insurance company’s investment assets and insurance contract liabilities are measured at current market value. Changes in market value will be reflected in the profit and loss statement or the balance sheet, so net profit and net assets fluctuate with market conditions—this is normal and industry standard.

Li Mingguang pointed out that the negative net profit in the fourth quarter of 2025 was mainly due to structural adjustments in the capital markets during that period, with some stocks and funds experiencing declines. These fluctuations are mostly temporary and reflect market changes, not the company’s long-term operation trend.

He further emphasized that life insurance companies operate over long cycles and across cycles. China Life’s investments are value-based and long-term, and asset-liability and investment management should be viewed over longer periods. He advised reducing overinterpretation of quarterly profits. China Life has always adhered to long-termism, maintained “asset-liability linkage,” and continuously improved management capabilities across long and cross cycles, striving to create sustainable value for investors. The solid economic foundation, multiple advantages, resilience, and great potential of China’s economy remain unchanged, providing a strong basis for the company’s development.

Meanwhile, Cai Xiliang stated that although the external environment during the “14th Five-Year Plan” remains complex and volatile, the next five years will still be a golden strategic opportunity for China Life, containing “four major dividends”:

First, the economic environment dividend. The “14th Five-Year Plan” outline states that in the next five years, efforts will be made to “lay a solid foundation for doubling per capita GDP by 2035 compared to 2020 and reaching the level of moderately developed countries.” China’s economic fundamentals remain stable, with many advantages, strong resilience, and great potential. The long-term positive trend and supporting conditions have not changed, laying a solid foundation for industry development.

Second, the policy dividend. The “14th Five-Year Plan” mentions “insurance” 27 times, explicitly proposing to “fully leverage commercial health insurance as supplementary protection,” “vigorously develop commercial pension insurance,” and “promote long-term care insurance,” bringing significant opportunities to the industry. Meanwhile, “risk prevention, strengthened regulation, and high-quality development” have become the main themes. With ongoing deepening of regulatory policies such as “integrated reporting,” dynamic adjustment mechanisms for guaranteed interest rates, and new health insurance regulations, the industry’s development remains positive, increasingly favoring well-regulated and stable market entities.

Third, the demand dividend. China’s insurance depth and density are only about 60% of the global average. The total assets of the insurance industry account for less than 10% of the total financial assets. The development of the third pillar is still in its infancy, with scale, share, and substitution ratios all relatively low compared to developed markets. There is significant room for growth in health insurance payouts, which could greatly increase the proportion of health, pension, and financial management needs, providing broad space for industry development.

Fourth, the technological dividend. Technologies represented by artificial intelligence will deeply empower all aspects of insurance operations, significantly improve industry productivity, expand the scope of customer groups and insurable boundaries, and reshape organizational operation modes.