Earnings Season | Structural Challenges Behind the Double Growth of Scale and Value: An In-Depth Analysis of China People's Insurance Group's 2025 Financial Report

Source: Guan Chao Finance

The two sides of data for leading property and casualty insurers.

Recently, PICC Property and Casualty disclosed its 2025 annual financial report, with core operational indicators achieving a comprehensive breakthrough, becoming the focus of market attention. Total assets first surpassed 2 trillion yuan; net profit attributable to parent company shareholders reached 20k yuan, an 8.81% increase year-on-year, setting a new record high; premium scale steadily expanded. Investment and underwriting formed a dual-driven momentum, with annual investment income of 46.65B yuan, a sharp increase of 78.75% year-on-year; the combined ratio of property and casualty insurance dropped to 97.60%; life insurance new business value was 44.94B yuan, up 64.5% year-on-year.

Behind these impressive figures, however, lurks concerns over performance volatility. In Q4 2025, net profit attributable to parent company shareholders was only 1.76 billion yuan, a significant drop from 65.38 billion yuan in the same period of 2024. The notable quarterly fluctuation reflects the insurance industry’s high sensitivity of asset-side performance to capital markets. Meanwhile, the business structure shows increasingly obvious differentiation: in the property and casualty sector, non-auto lines such as agricultural and liability insurance are under profit pressure; in the life sector, bancassurance premiums and value share have surged, while individual agent channels continue to shrink, with channel imbalance becoming a prominent issue on the path of transformation.

From an industry perspective, PICC’s 2025 performance mainly reflects current development features of the insurance sector: in a low-interest-rate environment, insurers achieve a rebound in investment returns through asset allocation optimization; profit quality improves via underwriting structure adjustments. However, they also face multiple challenges, including performance uncertainty caused by equity market fluctuations, insufficient market-based pricing ability in non-auto lines, and the pain of channel transformation in life insurance. The company’s emphasis on “long-term investment, value investment” and its layout for channel transformation and product optimization at the earnings release also offer reference directions for industry transformation.

As a leader in the property and casualty field, PICC’s steady performance in property and casualty insurance has become a “ballast stone” for the group’s profits, while rapid growth in the life sector has become a new “growth engine.” The initial formation of a pattern of coordinated efforts between property, life, and health insurance is underway, but internal profit differentiation and development imbalance among sectors still need to be addressed.

01

Core | Data reading of PICC’s 2025 financial highlights and controversies

In 2025, PICC set multiple core indicators to new historical highs, making them the most notable highlights of the financial report. Total assets exceeded 2 trillion yuan for the first time, reaching 176M yuan, up 14.79% year-on-year; net assets increased to 6.54B yuan, up 14.42%. Asset scale achieved leapfrog development; net profit was 20k yuan, with net profit attributable to parent shareholders at 2.03T yuan, up 9.02% and 8.81%, respectively, hitting a record high; life insurance new business value was 420.19B yuan, up 64.5%, also a historic high, demonstrating the effectiveness of transformation.

Against the backdrop of annual performance growth, Q4’s single-quarter results became a focus of market controversy. Data shows that in Q4 2025, net profit attributable to parent shareholders was only 1.76 billion yuan, compared to 65.38 billion yuan in the same period of 2024; after deducting non-recurring items, net profit was 4.18 billion yuan, down from 66.57 billion yuan in the same period of 2024. Market analysis suggests that the simultaneous correction of the bond and stock markets at year-end led to concentrated fair value impairment pressures, which was the core reason for the decline. This phenomenon also exposes the insurance industry’s high sensitivity of profits to capital market fluctuations.

PIC Property & Casualty’s combined ratio dropped to 97.60% in 2025, down 0.9 percentage points year-on-year, with underwriting profit of 46.65B yuan, up 75.6%, becoming the core support for group profits. However, profit differentiation among non-auto lines is prominent: agricultural insurance’s combined ratio is 101.9%, up 4.6 percentage points; liability insurance’s is 104.5%, both in loss. The insufficient market-based pricing ability and high cost control pressure in non-auto lines have become pain points for the property and casualty sector.

The life insurance sector was a bright spot in 2025, with original insurance premiums reaching 125.97 billion yuan, up 18.8%. However, channel structure issues are prominent. Bancassurance premiums reached 8.23B yuan, up 33.47%, accounting for 54.2%, surpassing individual channels for the first time. New business value was 176M yuan, up 102.3%. Meanwhile, the number of individual agents continued to decline, with 77k agents, down 7%, and monthly effective agents at 19,770, down 9.5%. The “quality improvement and quantity reduction” transformation pain persists.

In 2025, PICC’s investment income was 6.54B yuan, up 12.4%, reaching a near 3-year high, becoming an important driver of profit growth. The main reasons include the recovery of equity markets, increased yields from long-duration bonds, and optimized asset allocation structure. Equity investments accounted for 8.7%, with an investment return of 30.4%. However, high equity allocation also acts as a “double-edged sword”: year-end market correction directly caused quarterly performance fluctuations, further increasing asset-liability matching pressures.

02

Group | Asset scale expansion and structural differentiation

In 2025, PICC’s assets achieved leapfrog growth, with total assets surpassing 2 trillion yuan for the first time, reaching 418M yuan, up 14.79%; net assets increased to 6.66B yuan, up 14.42%. The growth rates of total assets and net assets are increasingly synchronized, providing solid capital support for business development.

Looking at asset growth trends, 2025’s asset growth rate significantly improved compared to previous years, reflecting active deployment in business development and capital operations.

On the liability side, the insurance liabilities grew steadily with premium income. Total premiums reached 12.44B yuan, up 6.55%; insurance service income was 4.67B yuan, up 6.14%, approaching the 2021 historical high.

Steady premium growth ensures liability stability, and the increasing proportion of long-term protection business further optimizes liability structure, providing long-term capital support for asset allocation.

In 2025, PICC achieved operating income of 66.9044 billion yuan, up 7.57%; net profit was 77k yuan, up 9.02%; net profit attributable to parent was 92.32B yuan, up 8.81%. Profit growth significantly outpaced premium growth, indicating continuous improvement in profitability quality. The profit increase results from the coordinated improvement of underwriting profit, investment income, and expense management.

On the underwriting side, the combined ratio of property and casualty insurance dropped to 97.60%, with stable auto claim ratios and ongoing optimization of high-loss non-auto lines, leading to substantial underwriting profit growth; in life insurance, the proportion of long-term protection business increased, and new business value growth improved profit quality.

On the investment side, annual investment income was 20k yuan, up 78.75%, driven by equity market recovery and asset allocation optimization.

On the expense side, cash paid for commissions and fees was 420.19B yuan, down 3.23%, reflecting effective expense control; business and management expenses were 738.39B yuan, up 24.97%, mainly used for technology investment, agent training, and risk reduction services, laying a foundation for long-term development.

Profit contributions from various sectors show that property and casualty insurance remains the “ballast stone” of group profits, with net profit of 570.72B yuan, a significant increase, accounting for over 70% of total group profit.

The life insurance sector’s net profit was 669.04B yuan, slightly lower than the 2024 high but still much higher than 2023 and earlier levels.

The health insurance sector performed strongly, with net profit of 46.65B yuan, a record high, up 42.9%; asset management net profit was 877 million yuan, stable.

Headquarters and other segments’ net profit was 44.94B yuan, down 11.37%, showing clear profit segmentation among sectors.

In 2025, PICC’s investment performance was outstanding, becoming a core driver of profit growth. Investment income was 50.88B yuan, up 78.75%, the highest growth rate in nearly 7 years. The total investment yield was 5.7%, achieving steady returns amid declining interest rates.

From the distribution of investment income, property and casualty, and life insurance remain core sources. In 2025, property and casualty investment income was 6.79B yuan, up 40.83%; life insurance investment income was 44.02B yuan, up 112.52%; health insurance investment income was 11.77B yuan, up 305.07%, achieving leapfrog growth.

The sharp rebound in investment income stems from ongoing optimization of asset allocation. In 2025, the company increased equity asset allocation, with stock investments rising from 3.6% at the start of the year to 8.7%, with net A-share purchases exceeding 40 billion yuan, and an equity investment return of 30.4%. Long-duration bonds also increased, with stable growth in bond investment yields.

Additionally, 2024’s volatile capital markets resulted in a lower base for investment income, making the year-on-year increase more prominent.

From an accounting standards perspective, PICC’s equity investment structure changed positively in 2025. According to the earnings release, the group’s OCI stocks increased by 158% from the start of the year, raising their proportion in investment assets by two percentage points, with an average dividend yield of 4.27%.

The company continues to focus on OCI high-dividend stocks while also reasonably planning TPL stock allocations, balancing stable dividend income with growth opportunities.

In 2025, PICC’s expense structure showed “structural optimization”: overall expense control was maintained, with increased investment in core businesses and technology.

Annual cash paid for commissions and fees was 8.18B yuan, down 3.23%, mainly due to the deepening implementation of the “report and pay in one” policy, effectively controlling channel costs.

Business and management expenses were 13.27B yuan, up 24.97%, reaching the highest level since the accounting standards adjustment in 2022, mainly used for technology investment, high-quality agent training, and risk reduction services, laying a foundation for long-term growth.

In terms of claims expenditure, in 2025, the company’s claims paid were 472.9 billion yuan, up 5.4%, roughly matching premium growth, reflecting strong underwriting risk management. Property and casualty claims increased steadily with premium growth; life claims remained stable; health insurance claims grew due to business scale expansion, but overall claims ratio remained within a reasonable range.

03

Property & Casualty | Cost ratio optimization and segmentation challenges

In 2025, PICC Property & Casualty continued steady development, remaining the core profit pillar of the group. Original insurance premiums reached 44.94B yuan, up 3.29%; insurance service income was 23.86B yuan, up 5.43%, with premium scale steadily expanding.

Profitability was even more impressive: underwriting profit was 19.88B yuan, up 75.6%, reaching a recent high; net profit was 2.8B yuan, up 21.4%; investment income was 50.88B yuan, up 40.83%, with dual support from underwriting and investment driving significant growth.

Core indicators show PICC Property & Casualty’s combined ratio at 97.60%, down 0.9 percentage points year-on-year, with the improvement being the key reason for the substantial increase in underwriting profit.

Looking at the “three ratios”: the combined expense ratio was 23.6%, down 2.2 percentage points, near a recent low, indicating effective expense control; the combined claims ratio was 74%, up 1.3 percentage points, mainly due to increased claims from extreme weather affecting agricultural insurance and higher claims in new energy vehicle insurance, but still within a reasonable range.

Product line structure: auto insurance remains dominant, non-auto lines growth slowed, and profit differentiation is prominent

Premium structure analysis shows auto insurance remains PICC P&C’s core line, with 2025 auto insurance premiums at 6.79B yuan, accounting for 55.01%. Although slightly down from 55.27% in 2024, auto remains the “half of the sky.” Auto premiums grew steadily by 2.81%, with continuous profit quality improvement: combined ratio at 95.3%, underwriting profit of 555.78B yuan, the main source of property and casualty underwriting profit.

Non-auto lines premiums reached 511.59B yuan, up 3.89%, slightly faster than auto, but profit differentiation is significant, becoming a pain point for sector development.

Among them, accident and health insurance performed well, with original premiums of 12.44B yuan, up 6.35%, combined ratio at 99.0%, and underwriting profit of 615 million yuan.

Corporate property insurance premiums were 40.3B yuan, up 4.42%, with a combined ratio of 101.0%, near breakeven.

Agricultural and liability insurance are in loss: agricultural premiums at 23.86B yuan, up 1.87%, with a combined ratio of 101.9%, up 4.6 percentage points, with underwriting loss of 1.049 billion yuan, mainly due to frequent extreme weather causing surge in catastrophe claims.

Liability insurance premiums were 14.26B yuan, down 1.73%, with a combined ratio of 104.5%, and underwriting loss of 1.745 billion yuan, highlighting issues like insufficient market-based pricing and risk management difficulties.

New energy vehicle insurance: high growth with hidden loss risks

As a key growth area in auto insurance, new energy vehicle insurance developed rapidly in 2025. PICC P&C underwrote 15.56 million EVs, up 34.3%. Premium scale grew steadily with the volume. However, profitability pressure is high: the combined ratio is significantly above traditional fuel vehicle insurance, constraining profit improvement.

The main reasons for high claims ratio include: first, higher accident rate—EVs have higher accident probabilities due to core component failures like motors and batteries; second, higher repair costs—electric systems account for a large share of repair expenses, with parts supply tight and frequent disputes over claims. Additionally, the vehicle risk grading system has not yet been implemented, making precise pricing difficult and increasing profitability pressure.

Industry trends indicate that from 2026, mandatory installation of Advanced Emergency Braking Systems (AEBS) will reduce truck claim risks, but risks for passenger EVs remain hard to mitigate. PICC P&C is actively collaborating with automakers to build data sharing and repair ecosystems, transforming from “risk bearer” to “risk reduction service provider” through technological empowerment, aiming to improve profitability and risk management in EV insurance.

The development of PICC P&C in 2025 highlights two core issues in non-auto lines:

First, insufficient market-based pricing ability—agricultural and liability lines overly depend on policy subsidies, lacking risk-based precise pricing mechanisms. Extreme weather and sudden risks can cause claims surges.

Second, superficial expense control—despite some reduction in non-auto expense ratios, receivable premium rates remain at 12.3%, with hidden capital occupation issues unresolved. Low-price competition among small and medium insurers further intensifies industry competition.

To address these issues, PICC P&C is advancing from three aspects:

1. Deepening reform of non-auto market-based pricing—using big data, AI, and other technologies to establish risk rating systems for precise pricing.

2. Strengthening risk reduction services—offering meteorological warnings, disaster mitigation, and other services to reduce catastrophe claims; providing enterprise risk assessments and training to lower accident probabilities.

3. Deepening expense management—strictly implementing the “report and pay in one” policy, cleaning up inefficient channels, and managing receivables to reduce capital occupation costs.

04

Life Insurance | Bancassurance boom, individual channel transformation remains challenging

In 2025, PICC Life Insurance achieved leapfrog development, becoming a “new engine” for group performance growth. Original insurance premiums reached 125.97 billion yuan, up 18.8%; insurance service income was 258.38B yuan, up 13.19%.

While premium scale steadily expanded, value growth was even more impressive. New business value was 107.58B yuan, a 64.5% increase under comparable standards, a historic high; embedded value reached 17.66B yuan, up 4%, demonstrating effective transformation.

On the profitability side, PICC Life’s net profit was 54.92B yuan, down from 1.05B yuan in 2024, but still much higher than 2023 and earlier. The decline mainly results from the high profit base in 2024 and adjustments in insurance reserve provisions.

Investment performance was outstanding, with annual investment income of 37.58B yuan, doubling from the previous year, effectively offsetting underwriting profit fluctuations and maintaining overall stability.

Cost control was effective: the surrender rate in 2025 was 1.7%, down sharply from 3.6% in 2024, a recent low. The significant drop reflects product structure optimization and improved customer stickiness, further stabilizing liabilities.

Channel structure: bancassurance becomes the largest channel, individual channel transformation faces ongoing pains

In 2025, the channel structure of PICC Life changed fundamentally. Bancassurance saw explosive growth, surpassing individual channels for the first time to become the largest. Bancassurance premiums reached 25.34B yuan, up 33.47%, accounting for 54.2%. First-year premiums increased by 66.3%, with new business value at 8.23B yuan, up 99.57%. The new business value share reached 56.8%, becoming the main driver of value growth.

The rapid development of bancassurance is mainly due to deep cooperation with banks and continuous promotion of long-term premium products. First-year premiums for ten-year and longer-term products increased by 32.4%, with product structure optimization boosting value.

In contrast, the individual channel’s transformation pains persist. As of the end of 2025, the number of individual agents was 76,991, down 7%; monthly effective agents were 19,770, down 9.5%. Premiums from individual agents were 124.15B yuan, up only 5.4%; first-year premiums declined by 12%.

The shrinking individual agent force is mainly due to industry “elite transformation” and the implementation of the “report and pay in one” policy. Traditional recruitment-driven models are unsustainable, and high-quality agent retention remains difficult.

Regarding product value, individual channels still have advantages: 2025’s new business value rate was 34.21%, much higher than the 18.42% of bancassurance. However, the shrinking scale of individual channels reduces their overall contribution. Although bancassurance grows rapidly, its value rate is still relatively low, and over-reliance on bank resources weakens bargaining power, raising long-term uncertainties.

Product structure: increased proportion of periodic premiums, long-term protection products become mainstream

In 2025, PICC Life continued product optimization, with steady growth in periodic premiums. First-year periodic premiums increased by 32.4%, and ten-year and longer-term products grew by 190.4%, further improving liability structure and boosting new business value.

Long-term protection products, such as health and critical illness insurance, became main sales drivers. In 2025, health insurance first-year premiums increased by 56.0%, far exceeding overall growth.

The increased share of protection products not only drives value growth but also enhances customer protection needs and loyalty, effectively reducing surrender rates.

Transformation challenges and layout: improving individual quality and efficiency, enhancing bancassurance value, and channel synergy

PICC Life’s 2025 development reflects both successful channel and product transformation but also faces three core challenges:

1. The pain of “quality improvement and quantity reduction” in individual channels—balancing agent shrinkage with capacity enhancement is difficult.

2. Low value rate in bancassurance—over-reliance on bank channels limits long-term growth potential.

3. Industry interest rate decline and reserve rate adjustments exert ongoing pressure on product sales and value growth.

To address these, PICC Life is advancing from three aspects:

1. Improving individual channel quality and efficiency—abandoning traditional recruitment-driven models, focusing on cultivating high-quality agents, establishing a full-process system of “recruitment-training-retention-incentives,” enhancing per-agent productivity and retention, and exploring new channels like community and regional operations.

2. Enhancing bancassurance value—deepening strategic cooperation with banks, shifting from “premium cooperation” to “value cooperation,” promoting long-term and protection-oriented products, and building exclusive product and service systems to strengthen channel loyalty.

3. Promoting channel synergy—leveraging group synergy between property, life, and health insurance, facilitating “product-life linkage,” and channeling property and casualty customer resources into life insurance; developing integrated financial channels with banks, asset management, and insurance to provide comprehensive financial services and increase customer value.

05

Conclusion

The 2025 annual report of PICC paints a picture of “scale and value rising together, structural differentiation becoming more prominent.” Highlights include assets surpassing 2 trillion yuan, record-high profits, optimized property and casualty cost ratios, and doubled life insurance new business value, confirming the company’s achievements in asset allocation, underwriting control, and product transformation.

However, issues such as quarterly performance fluctuations, profit differentiation in non-auto property and casualty lines, and channel structure imbalance in life insurance also reveal structural contradictions during development—common problems faced by the insurance industry amid declining interest rates, capital market volatility, and deepening transformation.

For PICC, the core for 2026 and beyond is to solve the “balance” problem:

1. Balance between asset and liability sides—optimize investment strategies, reduce sensitivity to capital markets, and achieve long-term steady returns.

2. Balance among property and casualty lines—enhance market-based pricing and risk management, promote balanced development across lines.

3. Balance among life insurance channels—accelerate elite transformation of individual channels, improve bancassurance value, and develop multi-channel synergy.

4. Balance between scale and value—adhere to the “value-focused” development philosophy, promoting synchronized growth of scale and value.

As a leading enterprise in the insurance industry, PICC’s development path provides important reference for industry transformation.

In the critical stage of shifting from “scale-driven” to “value-driven,” only by returning to the essence of insurance—centered on customer needs, empowered by technology to improve risk management and pricing, and optimizing business structure through channel and product transformation—can the industry establish sustainable competitiveness amid cyclical fluctuations and achieve high-quality development.