China Life Insurance Company Limited (China Life, 601628.SH, 2628.HK), the country's largest life insurer, released its 2025 interim report on the evening of August 27th. The report shows that China Life achieved net profit attributable to shareholders of 40.931 billion yuan in the first half of the year, representing a 6.9% year-on-year increase; total premiums reached 525.088 billion yuan, hitting a historical high for the same period with a 7.3% year-on-year growth; and new business value increased by 20.3% compared to the restated results for the same period in 2024, reaching 28.546 billion yuan.
As of the end of June, China Life's investment assets totaled 7.127 trillion yuan, up 7.8% from the end of 2024. In the first half of 2025, the company achieved net investment income of 96.067 billion yuan with a net investment yield of 2.78%; total investment return reached 127.506 billion yuan with a total investment yield of 3.29%.
"Facing a complex and volatile market environment, China Life has risen to the challenge, maintained strategic focus, and vigorously promoted transformational changes, delivering an impressive performance report with high 'gold content,'" commented China Life Chairman Cai Xiliang during the company's 2025 interim results announcement on August 28th.
Cai Xiliang indicated that the first-half performance reflects the effectiveness of "three proactive approaches": strategic proactivity, transformation proactivity, and development proactivity. Looking ahead, he noted that the fundamental conditions and trends supporting China's economic stability, advantages, resilience, potential, and long-term positive outlook remain unchanged, continuing to provide a solid foundation for the long-term healthy development of the financial insurance industry.
**Significant Increase in Floating Return Products**
The report shows that China Life achieved total premiums of 525.088 billion yuan, creating the best performance for the same period in history with a 7.3% year-on-year increase. In terms of premium structure, China Life's first-year regular premium reached 81.249 billion yuan in the first half of this year, maintaining the top position in the industry. Ten-year and above first-year regular premiums totaled 30.305 billion yuan, accounting for 37.30% of first-year regular premiums, with the individual insurance channel's ten-year and above first-year regular premiums representing over 45% of the channel's first-year regular premiums.
The report indicates that in the first half of this year, the proportions of new single premiums for life insurance, annuity insurance, and health insurance were 30.32%, 32.01%, and 33.42% respectively. In terms of business structure transformation, floating return products' share in first-year regular premiums increased by over 45 percentage points compared to the same period last year, achieving a breakthrough in business structure transformation.
By channel, China Life's individual insurance channel achieved total premiums of 400.448 billion yuan in the first half of the year, up 2.6% year-on-year, with renewal premiums of 326.563 billion yuan, up 10.4% year-on-year. First-year regular premiums reached 64.085 billion yuan, with ten-year and above first-year regular premiums totaling 30.28 billion yuan, accounting for over 45% of first-year regular premiums. Dividend insurance represented over 50% of the individual insurance channel's first-year regular premiums, becoming an important pillar of new single premiums. The individual insurance channel's new business value in the first half reached 24.337 billion yuan, up 9.5% year-on-year.
In the bancassurance channel, China Life achieved total premiums of 72.444 billion yuan in the first half, up 45.7% year-on-year; new single premiums reached 35.873 billion yuan, up 111.1% year-on-year; first-year regular premiums totaled 17.032 billion yuan, up 34.4% year-on-year; and renewal premiums reached 36.571 billion yuan, up 11.7% year-on-year, accounting for 50.48% of the channel's total premiums. The bancassurance channel had 18,000 customer managers, with per capita productivity significantly improving by 51.8% year-on-year.
Regarding addressing "interest rate spread losses," Hou Jin, Assistant to the President and Chief Actuary of China Life, stated that through efforts in the first half of this year, the company has successfully shortened the asset-liability effective duration gap for new business to 1.5 years, laying a solid foundation for China Life's interest rate risk management. The company has also actively enhanced cost-benefit matching effectiveness, with liability guarantee costs in the first half of 2025 declining significantly by 59 basis points compared to the same period last year, establishing a good foundation for managing future interest spread loss risks.
**Focus on New Productive Forces and High Dividend Stocks**
From an investment perspective, as of the end of June, China Life's investment assets reached 7.127 trillion yuan, up 7.8% from the end of 2024. In the first half of 2025, the company achieved net investment income of 96.067 billion yuan with a net investment yield of 2.78%; total investment return reached 127.506 billion yuan with a total investment yield of 3.29%.
China Life stated in its interim report that the company steadily promoted medium and long-term capital market entry, with public market equity scale increasing by over 150 billion yuan compared to the beginning of the year, and cumulative investment of 35 billion yuan in private securities investment funds, supporting capital market development through concrete actions. Additionally, the company actively participated in innovative investments such as gold, broadening insurance fund investment channels and enhancing portfolio diversity.
Regarding capital market outlook, Liu Hui, Vice President, Chief Investment Officer, and Board Secretary of China Life, stated during the earnings announcement that under various factors' influence, bond market rates maintain low-level fluctuations, A-share market valuations are generally reasonable, market bottom is relatively solid, and positive factors are accumulating. The company remains optimistic about the A-share market in the second half of the year and will continue to focus on sector rotation opportunities in technology innovation, advanced manufacturing, and new consumption.
Based on this market assessment, Liu Hui indicated that the company's allocation strategy for the second half will adopt the approach of "stabilizing allocation assets and optimizing flexible assets." Specifically, the company will maintain a neutral and flexible allocation strategy in composition, keeping the asset-liability duration gap at a relatively low level.
"Currently, the equity investment ratio aligns with the company's asset allocation center. The company will actively implement requirements for medium and long-term capital market entry, continuously optimize equity allocation structure, focus on new productive forces and high-quality high dividend stocks allocation, and continuously enhance the stability and long-term return potential of equity allocation."
Liu Hui also mentioned that QDII (Qualified Domestic Institutional Investor) quotas have been gradually released this year. With Hong Kong stock valuations continuing to recover in the first half, the Hong Kong stock market is an important component of China Life's QDII quota in equity investment allocation. "Against the backdrop of declining US dollar credit and global capital rebalancing, we believe Hong Kong's new economy and high dividend quality assets have allocation value. The company achieved very good returns in Hong Kong stock market allocation in the first half, and will continue to focus on and operate in the Hong Kong stock market in the second half."
DBS Bank recently published a research report stating that it believes improved stock market performance and strong new business value growth warrant further re-rating for China Life, and investor concerns about negative interest spread risks should be alleviated. DBS raised China Life's H-share target price from HK$18 to HK$20, reiterating a "buy" rating. DBS expects China Life's new business value annual growth for fiscal years 2024 to 2026 to be 16%, 11%, and 10% respectively, and anticipates that related improvements will be more structural, mainly due to continued demand for retirement insurance products, VNB margin improvements driven by declining financial costs, and continued reversal of commission expenses.