China Life Property & Casualty Insurance 2025: Net Profit Doubled, Underwriting Turns Profitable

China Life Property & Casualty Insurance Co., Ltd. (hereinafter referred to as "China Life P&C")'s 2025 report card is an example of the "art of balance".

In its recently disclosed Solvency Report for the fourth quarter of 2025, China Life P&C delivered an annual net profit of 3.976 billion yuan.

Compared to the net profit of 1.948 billion yuan in 2024, this figure represents a year-on-year doubling of growth.

However, beneath the surge in net profit, the core driver behind performance was not the rapid expansion of premium scale, but rather a robust recovery on the investment side and a difficult turnaround to profitability on the underwriting side.

According to data, in 2025 China Life P&C achieved insurance business income of 112.834 billion yuan, an increase of only about 1.5% compared to 111.183 billion yuan in 2024.

Against the backdrop of slowing premium growth, the restoration of profitability is especially critical.

Changes on the underwriting side are the focus of market attention.

In 2024, China Life P&C fell into the quagmire of underwriting losses due to its comprehensive cost ratio (COR) reaching 100.48%. A year later, this figure was reduced to 99.56%, returning to below the 100% break-even line.

This means that for every 100 yuan of premium income, China Life P&C has shifted from last year's loss of 0.48 yuan to a profit of 0.44 yuan. Although the profit margin remains narrow, in the current environment of deepening auto insurance reforms and frequent natural disasters, this slight turn to profitability is no small feat.

A breakdown of the cost structure shows that this improvement mainly comes from the control of expenses.

The report shows that the comprehensive expense ratio in 2025 is 25.41%, down more than 1 percentage point from last year's 26.49%, while the comprehensive claims ratio edged up from 73.99% to 74.15%.

Faced with rising payout rigidity, reducing expenses to exchange for underwriting profits has become a necessary move for China Life P&C.

If the improvement on the underwriting side is about saving, then the explosion on the investment side is the real "winning move" behind the doubling of profits.

In 2025, China Life P&C's financial investment return rate reached 4.77%, far higher than the 2.94% in 2024 and significantly above its average of 2.53% over the past three years.

With premium growth stagnant, a nearly 5% investment yield became the absolute main force for boosting profits.

However, it should also be noted that such a profit model, which relies heavily on investment returns, often faces sustainability challenges in an increasingly volatile capital market environment.

In terms of capital replenishment, China Life P&C did not stop its "blood transfusion" despite the rebound in profits.

In the fourth quarter of 2025, the company successfully issued 4.5 billion yuan of supplementary capital bonds, directly increasing its actual capital at quarter-end by 2.832 billion yuan compared with the previous quarter.

By the end of 2025, China Life P&C’s comprehensive solvency adequacy ratio was 218.33%, and its core solvency adequacy ratio was 184.38%, both remaining above the regulatory red line.

For a property insurance company with the scale of hundreds of billions of yuan, sufficient capital is not only the bottom line for regulatory compliance, but also the "safety cushion" for dealing with future business fluctuations and potential risks.

On the personnel front, China Life P&C welcomed a new helmsman in 2025.

The report shows that Li Zhuyong has served as Chairman since April 2025. Previously, he was Vice President of PICC Group. Meanwhile, cooperation between President Huang Xiumei and the new executive team will also determine the company's future strategic direction.

It is worth noting that compliance pressure still lingers.

In the fourth quarter of 2025 alone, China Life P&C's branches received 26 administrative penalties, with a total fine of 5.3095 million yuan. The reasons for punishment remain concentrated on industry chronic problems such as "inaccurate financial business data," "false underwriting and claims handling," etc.

How to further strengthen internal control and compliance while maintaining performance growth is a challenge that management must directly confront.

Overall, 2025 for China Life P&C was a battle of "return"—underwriting returning to profitability, and investment returning to value. But under the dual pressure of slim underwriting profit and investment volatility, finding a more robust internal growth momentum may be an issue more worthy of contemplation than doubled net profit.

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