On August 29th, the A-share insurance sector posted collective gains, with New China Life Insurance Company Ltd. approaching its daily limit during intraday trading. Despite some pullback during the session, the insurance sector overall gained over 2% by midday close.
A securities analyst noted that the insurance sector's rally stems from two factors: first, the recent earnings reporting period has shown solid performance across major insurers; second, the bond market has entered an adjustment phase, which benefits insurance institutions as bond market stabilizers. The current environment represents the most comfortable conditions for the insurance sector.
By midday close, the insurance sector gained 2.22%. Specifically, PICC rose 2.53%, China Pacific Insurance gained 2.28%, New China Life Insurance Company Ltd. surged 6.17%, China Life Insurance advanced 1.25%, and Ping An Insurance rose 1.07%.
Regarding this rally, securities analysts believe earnings performance provides the fundamental logic for the gains.
The interim reports for all five major A-share listed insurers have been released. Data shows that in the first half of the year, China Ping An, China Life Insurance, PICC, China Pacific Insurance, and New China Life Insurance Company Ltd. collectively achieved net profit attributable to parent company shareholders of 178.193 billion yuan, up 3.7% year-over-year.
Specifically, China Ping An achieved net profit attributable to parent company shareholders of 68.047 billion yuan in the first half, representing the largest profit scale. China Life Insurance realized net profit attributable to parent company shareholders of 40.931 billion yuan, up 6.9% year-over-year. China Pacific Insurance achieved net profit attributable to parent company shareholders of 27.885 billion yuan, up 11% year-over-year. PICC realized net profit attributable to parent company shareholders of 26.530 billion yuan, up 16.9% year-over-year. New China Life Insurance Company Ltd. achieved net profit attributable to parent company shareholders of 14.8 billion yuan, up 33.5% year-over-year.
From a business perspective, listed insurers' life insurance new business value generally showed significant improvement, while property insurance business demonstrated declining combined ratios and rising underwriting profits. For example, China Life Insurance achieved rapid growth in new business value in the first half, increasing 20.3% compared to the restated 2024 same-period results to 28.546 billion yuan. New China Life Insurance Company Ltd. achieved new business value of 6.182 billion yuan, up 58.4% year-over-year. China Pacific Life Insurance realized new business value of 9.544 billion yuan, up 32.3% year-over-year. PICC Property Insurance's combined ratio reached 95.3%, the best level for the same period in nearly 10 years. Ping An Property Insurance's overall combined ratio was 95.2%, down 2.6 percentage points year-over-year.
Since April this year, insurance stocks have begun showing an upward trend, with New China Life Insurance Company Ltd.'s stock price repeatedly hitting historical highs and PICC's A-share price reaching a near 6-year high.
Why are insurance stocks climbing steadily? Listed insurer executives believe this relates to external policy environment and the sector's continued improvement. "China's high-quality economic and social development has brought historic development opportunities for the insurance industry," said Zhao Peng, President of PICC Group, when responding to stock price gains. He noted that new spaces and momentum in technological revolution, green development, digital economy, pension security, and "new citizen" services continuously generate rich new insurance demands. The insurance industry's quality and efficiency in serving Chinese-style modernization construction continues to strengthen, with its functions as economic shock absorber and social stabilizer becoming increasingly prominent. Particularly, the Central Financial Work Conference and the insurance industry's new "National Ten Articles" have systematically deployed China's insurance industry development, releasing clear signals for further promoting high-quality development. Capital market positive expectations for the insurance industry's future development space provide solid foundation for company stock price gains.
Additionally, the continuously improving development environment effectively promotes steady and sustainable insurance industry development. Zhao Peng stated that in recent years, regulatory authorities have guided the insurance industry back to its origins, comprehensively improving insurance protection capabilities and service levels. Policy measures including auto insurance comprehensive reform, life insurance predetermined interest rate dynamic adjustment mechanism, and bancassurance channel "report and act as one" have effectively promoted industry transformation, upgrading, and risk prevention. As a leading insurer, PICC's competitive advantages have become more prominent, with significantly reduced costs and expenses, and continuously strengthened development stability and sustainability. Capital market high recognition of the industry's continuously improving development environment provides effective guarantee for company stock price gains.
Dongguan Securities analysis indicates that the insurance industry currently is in a multi-dimensional resonance period of "beta attribute-driven valuation repair + liability-side transformation consolidating foundation + asset-side equity efforts enhancing returns." Since the beginning of the year, A-share insurers have achieved across-the-board gains, with clear insurance sector valuation repair logic. On one hand, liability-side transformation and channel reshaping establish value foundation; on the other hand, asset-side equity efforts and strategic layout deepening provide momentum.