Insurance companies increase holdings in peers again! Ping An of China: Insurance stocks are still undervalued

Amid market pullbacks, the pace at which insurers bid for or increase holdings in fellow insurance companies has not slowed down.

According to the latest disclosure from the Hong Kong Exchanges and Clearing House, China Pacific Insurance (H shares) recently received another share increase from China Ping An Group: 3.1044 million shares were added at an average price of HK$32.39 per share, totaling about HK$101 million. The stake ratio will rise to 12.08%.

Last month, China Ping An also increased its holdings of China Life by about HK$326 million, bringing its stake ratio to 10.12%. According to the annual report, Xinhua Insurance has also made it into the list of China’s top ten shareholders of China Life Insurance and Property, indicating that insurers increasing holdings in peers is no longer an isolated case.

Insurers once again increasing holdings in peers cannot hide the scarcity of high-quality dividend assets behind it, as well as confidence in the insurance industry. Recently, in an exclusive interview with a reporter, Lu Haoyang, deputy chief investment officer of China Ping An, said that insurance stocks are still undervalued. The industry not only benefits from policy tailwinds, but also has strong growth potential as population structure, consumer habits, and investment philosophies change.

China Pacific Insurance’s H shares receive further peer-share increase

On March 30, according to the latest disclosure from the HKEX, China Pacific Insurance (02601.HK) increased its holdings in China Ping An Insurance (Group) on March 25 by 3.1044 million shares at an average price of HK$32.3919 per share, involving about HK$101 million. After the increase, China Ping An (Group) holds 33,539 million shares of China Pacific Insurance’s H shares, and its stake ratio rose from 11.97% to 12.08%.

This is at least the third time since last year that China Ping An has increased its holdings of China Pacific Insurance’s H shares. The first time was in August 2025, when the stake ratio reached the 5% “tender/spot-bid” threshold. At that time, it bought about 1.7414 million shares at an average price of about HK$32.07 per share. The second time was in September 2025, when it cumulatively bought 140 million shares, and the stake ratio jumped to 10%.

It is worth noting that although the interval between the first and third increases was more than half a year, the average price per share was still about HK$32. During that period, China Pacific Insurance’s H-share price once rose to HK$40.46, suggesting China Ping An’s long- and medium-term capital strategy of “buying on dips.”

China Ping An responds to “insurance stocks still undervalued”

Since last year, China Ping An has frequently conducted share bids and capital increases targeting insurance and bank stocks, drawing widespread market attention due to insurers’ increasing holdings in peers.

In addition to increasing holdings of China Pacific Insurance’s H shares, China Ping An has also twice bid for and increased holdings in China Life’s H shares. In August last year, it bought 9.5 million China Life H shares, spending about HK$375 million. Its cumulative stake ratio reached 5.04%, reaching the bid threshold for the first time. In February of this year, China Ping An again increased its holdings of 10.895 million China Life H shares, at an average price of HK$33.2 per share—lower than last year’s HK$39.47—and its cumulative stake ratio reached 10.12%.

It is worth noting that increasing holdings in peers is no longer an isolated case. In addition to China Ping An’s increased holdings of China Pacific Insurance’s H shares and China Life’s H shares, Xinhua Insurance has also entered the list of the top ten shareholders of China Renbao. According to the annual report, as of the end of 2025, the two product fund accounts under Xinhua Insurance held 82.201 million shares and 76.609 million shares of China Renbao, respectively, with stake ratios of 0.19% and 0.17%. They rank as the fifth and sixth largest shareholders, and the share-increase actions are mainly concentrated in the fourth quarter of last year.

“From a long-term perspective, individual stocks in the insurance industry are still undervalued,” Lu Haoyang, deputy chief investment officer of China Ping An, said in a recent interview with a reporter. On the one hand, the insurance industry still has strong growth potential in the future, and the strategic plan for a strong financial country places great emphasis on improving the quality and efficiency of the financial industry. Insurance is one of the financial industry segments that benefits from policy tailwinds. On the other hand, changes in China’s population structure, changes in consumption habits, and changes in investment philosophies are also all favorable to the insurance industry.

In 2025, the five major insurers’ dividends exceed 1,000 billion yuan

At present, the 2025 annual reports of the five largest listed insurers in China’s A-share market have all been released, and the dividend plans have also come into view. According to a reporter’s statistics, the combined dividends—dividends at year-end plus interim dividends—of the five insurers total more than 1,000 billion yuan, reaching 102.394 billion yuan.

As of the end of 2025, China Life, China Ping An, China Renbao, China Pacific Insurance, and Xinhua Insurance together had total investment assets of 20.7 trillion yuan, up 12.8% from the end of 2024; they also achieved total attributable net profits of 425.291 billion yuan, up 22.4% year over year.

On the one hand, considering the high growth in performance behind it: besides efforts on the liability side, the impact of equity-asset investment on net profit volatility is relatively large on the asset side. Therefore, some insurers have lowered their dividend payout ratios. But overall, the dividend scale of insurers in 2025 is still very substantial. The full-year dividend amounts for China Ping An, China Life, China Pacific Insurance, China Renbao, and Xinhua Insurance were 48.891 billion yuan, 24.194 billion yuan, 11.063 billion yuan, 9.729 billion yuan, and 8.516 billion yuan, respectively.

On the other hand, with growth in premium income, the scale of insurers’ investments in equity assets has expanded. Taking stock investments as an example, the five insurers’ total stock investment amount reached 2.5 trillion yuan by the end of 2025, up by more than 1 trillion yuan from the end of 2024, an increase of 75.2%. The proportion of stocks in investment assets rose from 7.8% to 12.2%, up by 4.4 percentage points.

In a low-interest-rate era, insurers need to both match asset-liability duration and liability costs, and improve long-term asset returns. The high-dividend strategy still works for insurers. Based on the closing price on March 31, the dividend yields of listed insurance companies in A/H shares are all above the yield of long-term government bonds. If tax costs are not considered, the dividend yield of H shares has an even stronger advantage.

（Current dividend yield calculated using the closing price as of March 31）

Layout: Wang Yunpeng

Proofreading: Liao Shengchao