New China Life Insurance's "Investment Trader" Appears at Earnings Conference, Reveals Equity Investment Strategy

Ask AI · How Does New China Life Insurance Address Investment Challenges in a Low-Interest-Rate Environment?

New China Life Insurance’s latest disclosed 2025 performance has hit a historical high.

During the reporting period, attributable net profit was RMB 36.284 billion, up 38.3% year over year; total premium income was RMB 195.871 billion, up 14.9%; and investment income crossed RMB 100 billion for the first time.

On the afternoon of March 30, key executives of New China Life Insurance appeared in Beijing to respond to investors’ concerns.

Among them, Chen Yijiang, president of New China Asset Management Co., Ltd., was in attendance. He is a core operator of New China Life Insurance’s “investment base.” He provided a detailed response regarding the path for insurers’ fund investments in a low-interest-rate environment.

Zishitang summarizes the key takeaways from this earnings call as follows for the benefit of readers.

Investment Strategy in a Low-Interest-Rate Environment

In 2025, New China Life Insurance’s total investment yield reached 6.6%, which is also the result of the company’s long-term commitment to value investing, long-term investing, and asset-liability management.

Regarding the interest rate trend, we believe the short term will still show a volatile pattern, with credit spreads narrowing and term spreads widening. In the short-end, liquidity is relatively loose with stronger certainty, while volatility in ultra-long-end rates increases, and rates at the long and short ends show divergence. In a low-interest-rate environment, fixed-income investments need to capture interest-rate changes and structural opportunities to obtain reasonable returns.

As for the equity market, the company is optimistic about the medium- to long-term development of China’s capital markets. It will focus on three areas:

First, industries with high levels of prosperity and ongoing improvements in performance.

Second, industries aligned with national strategic directions, especially areas related to new quality productive forces.

Third, investment targets that exhibit high dividend-yield characteristics in a low-interest-rate environment.

Adhere to an Absolute-Return Orientation

Based on the above judgments, in its 2026 asset allocation the company will adhere to the following principles.

First, it will adhere to asset-liability matching, arranging asset duration and structure reasonably according to liability characteristics to ensure that investment returns cover the cost of liabilities.

Second, it will adhere to diversified, multi-asset allocation, optimizing the portfolio structure among fixed income, equities, and alternative assets to enhance risk resilience and increase return flexibility.

Third, it will adhere to an absolute-return orientation, paying attention to a safety margin amid market volatility, capturing structural opportunities, and achieving long-term, steady returns.

Overall, in 2026, the macro environment and financial markets will still have uncertainty. This is both a challenge and an opportunity for insurers’ funds management. The company will continue to track changes in the macro environment and policies and strive to create stable returns for customers and investors.

How to Respond to Equity Market Volatility

As for equity assets, the company should be said to attach great importance to the strategic role of equity assets within the entire investment portfolio, based on strategic judgments that China’s capital markets will remain favorable in the long run and be resilient.

In 2026, the company will continue to respond to long-term market orientation, combining the needs of liability management with specific market changes, and will uphold the overarching principle of making steady progress while maintaining stability to coordinate the timing and structure of equity asset allocation.

Regarding the impact of capital market volatility on the company’s operations and management, there are three points of understanding:

First, under the broader “doing more equities” concept, we implement diversified asset allocation. Equity asset allocation includes our positioning in terms of industry distribution, as well as our A-share and H-share layout, including our implementation in both active and passive strategies, and including the distribution of dividend-oriented assets and growth-oriented assets. Through portfolio effects, we achieve diversification of related volatility.

Second, we strengthen research-driven investment behaviors through an integrated research and investment approach. Practice has shown that our investment team can identify new strategic targets with attributes including valuation, high dividends, and high growth, proving our professional confidence in this area.

Third, within the broader framework of asset management—especially in combination with transformation at the liability end, including dividend insurance—good asset-liability management should be carried out based on an account incentive mechanism.

Discussing the Honghu Private Fund

For multiple long-term insurance-fund investment reform pilot funds (Honghu funds) established by New China Life Insurance together with China Life Insurance, starting from March 2024, the pilot has entered its third phase over the past two years, achieving a “double win” in both social and economic benefits.

In terms of capital injection into the Honghu funds, New China Life Insurance has cumulatively invested RMB 46.25 billion. The establishment of the funds helps optimize asset-liability management and also benefits stabilizing the long-term healthy development of the capital market.

In diversified investment, the company is firmly executing this strategy. There are three main considerations for choosing directions:

First, in a low-interest-rate environment, by diversifying across asset types, industry distribution, and regional layout, we expand investment space and enhance the long-term return core of the portfolio.

Second, by responding to the country’s transition from old to new drivers of growth and the development of strategic emerging industries, we provide broad room for insurers’ funds to participate in diversified investments.

Third, leveraging the company’s years of accumulated investment capabilities and continuously improving professional level—including risk management in the front, middle, and back office and digital construction—provides a foundation for carrying out professional investments.

Wealth Management Opportunities for Life Insurance Companies

The “New Ten Articles” on the insurance sector have positioned wealth management as the main responsibility and core business of insurance companies, greatly enriching and expanding the meaning and scope of insurance. At present, demand among the public for preserving and increasing wealth is strong and diverse, increasingly flowing toward capital markets and insurance products.

We are entering a golden window period for the transfer of wealth for preservation and appreciation. The advantages of insurance products’ stable returns, retirement reserves, and intergenerational transmission are even more prominent—this is the opportunity.

From the perspective of challenges, the top challenge facing China’s life insurance industry at present is how to handle the interest-rate spread loss risk effectively in a low-interest-rate environment, achieving effective asset-liability matching and coordinated development. The yield on 10-year government bonds is still low. Meanwhile, the financial investment attributes of non-standard alternative real estate and other fields in the past have clearly weakened when it comes to customers’ preference for buying insurance. After large amounts of premium flow into insurance companies, how these premiums can be transformed to survive across cycles, overcome volatility, and ultimately be realized as long-term returns for customers will impose higher requirements on insurers’ operating and investment capabilities.

Premium Income Growing on a High Base

In 2025, the company indeed achieved quite strong results: total premium growth reached 15%, and long-term regular premium also grew relatively quickly. This has built a relatively high base for us and also brought some pressure, but we are confident that we can continue to maintain steady growth on top of that high base.

In terms of products and competitive strategies, first, we implement a marketing philosophy of scenarios plus products plus services plus technology to deepen the product model. By introducing external medical resources, focusing on disease treatment and nursing, we enrich health insurance products. At the same time, we combine retirement wealth management-type products with resources from retirement communities to build an “insurance plus retirement travel and living” model, strengthen asset-liability linkage, and support the development of differentiated products.

Second, we address the diverse retirement and wealth management needs in an aging society. In 2026, we will continue to strengthen the sales of risk-oriented increased lifelong insurance policies. Meanwhile, we will further increase the promotion of long-term annuities and retirement annuities, and by integrating the individual pension system and tax-favored policies, we will include products such as lifelong annuities and retirement annuities into the relevant framework to meet customers’ retirement and wealth management needs.

Third, we build a health protection product system, providing end-to-end solutions across the full lifecycle—from pre-event prevention, to in-event control, to post-event rehabilitation. We will strengthen alignment with the reform of social security and medical care, and explore product development such as participating health insurance, consumer medical insurance, specific drug protection, and nursing care disability insurance.

Regarding risk transformation, the company achieved initial progress in 2025. On the one hand, there was a breakthrough in sales: the scale of participating insurance sales for the full year reached about RMB 2 billion, achieving expected results under the context of transformation. On the other hand, the risk management system has taken shape initially. The company has integrated resources across the front, middle, and back offices and rolled out a series of measures around performance assessment, product control, team training, ecosystem coordination, compliance guidance, and more, forming a relatively complete risk management system.

AI Deployment

In 2026, New China Life Insurance’s AI deployment will continue to strengthen four directions.

First, in technology governance, relying on the Digital Committee, it will fully implement the science and technology plan of the Fifteenth Five-Year Plan, and deepen a new technology governance pattern driven by “two-wheel-drive.”

Second, in AI applications, this year we will build seven digital employees covering high-frequency areas such as training, customer service, group insurance, claims, policy administration office work, and investment advisory. Through the coordinated use of small and large models, we expect to improve the efficiency of digital production capacity—equivalent to 3,000 full-time employees. This will enable robots to complete work that can be substituted, allowing employees to focus on high-value work.

Third, we will further mine the value of data and build an integrated, two-platform, five-level big data architecture, so that data changes from “visible” to “usable,” becoming the core asset for business growth.

Fourth, we will reinforce the data foundation, forming a basic infrastructure of “one cloud, multiple new types” to achieve elastic scheduling and management of pooled resources for computation, storage, and computing power networks, ensuring business continuity.

In short, AI has deeply penetrated every link of New China Life Insurance’s business and management, becoming the core engine for high-quality development. The company will maintain strategic resolve, balancing human resources and technology investment. Under the guidance of the science and technology provisions of the Fifteenth Five-Year Plan, we will strive to make AI deliver greater effectiveness.