New China Life Insurance's "investment trader" appears at the performance meeting, revealing equity investment strategies

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New China Life Insurance's latest disclosure of its 2025 performance has reached a historic high.

During the reporting period, net profit attributable to shareholders was 36.284 billion yuan, a year-on-year increase of 38.3%; total premium income was 195.871 billion yuan, a year-on-year increase of 14.9%; investment income broke through the 100 billion threshold for the first time.

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

Among them, Chen Yijiang, President of New China Asset Management Company, was present. He is the core operator of New China Life Insurance's "investment base," and he provided a detailed response regarding the investment path in a low interest rate environment.

Zishi Tang has summarized the core points of this performance briefing for readers.

Investment Strategy in a Low Interest Rate Environment

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

Regarding interest rate trends, we believe that in the short term, they will continue to be volatile, with narrowing credit spreads and widening term spreads. The short-term capital market is relatively loose and more certain, while ultra-long-term fluctuations increase, leading to a divergence between short and long-term rates. In a low interest rate environment, fixed income investments require attention to rate changes and structural opportunities to obtain reasonable returns.

Regarding the equity market, the company is optimistic about China’s capital market’s medium and long-term development. Three directions are key:

First, industries with high prosperity and sustained performance improvement.

Second, industries aligned with national strategic directions, particularly those related to new quality productive forces.

Third, investment targets with high dividend characteristics in a low interest rate environment.

Adhering to Absolute Return Orientation

Based on the above judgement, in 2026, the company will adhere to the following principles in asset allocation:

First, insist on asset-liability matching, reasonably arranging asset duration and structure according to liability characteristics, ensuring investment returns cover liability costs.

Second, maintain diversified and multi-asset allocation, optimizing the portfolio structure between fixed income, equity, and alternative assets to enhance risk resistance and yield flexibility.

Third, adhere to absolute return orientation, focusing on safety margins amid market volatility, seizing structural opportunities, and achieving long-term stable returns.

Overall, the macro environment and financial market in 2026 still have uncertainties. Managing insurance funds is both a challenge and an opportunity. The company will continuously monitor changes in macroeconomics and policies, striving to create stable returns for customers and investors.

How to Handle Equity Market Volatility

The company attaches great importance to the strategic role of equities in the overall investment portfolio. Based on a strategic judgment on the long-term resilience and positive outlook of China’s capital market:

In 2026, the company will continue to respond in line with medium and long-term market trends and liability management needs, and according to specific market changes, adhere to the principle of steady progress and coordinate the rhythm and structure of equity asset allocation.

For the impact of capital market volatility on company management, there are three points:

First, under the broad equity philosophy, the company pursues diversified asset allocation in equities, including industry distribution, A-share, H-share layout, active/passive strategies, and allocation between dividend assets and growth assets, dispersing related volatility through portfolio effects.

Second, strengthen research-driven investment behavior, integrating investment and research. Practice has shown our team can identify strategic targets with valuation advantages, high dividends, and high growth, demonstrating our professional capability.

Third, in asset management, especially with the liability side including dividend insurance, use account-driven incentive mechanisms for asset-liability management.

Regarding Honghu Private Equity Fund

For multiple insurance fund long-term investment reform pilot funds (Honghu Fund) jointly established by New China Life Insurance and China Life, from March 2024, the pilot has completed three phases in the past two years, achieving both social and economic benefits.

New China Life Insurance has cumulatively invested 46.25 billion yuan in the Honghu Fund. Establishing the fund helps optimize asset-liability management and promotes the long-term healthy development of the capital market.

In terms of diversified investment, the company firmly implements this strategy, with three main considerations:

First, in a low interest rate environment, diversification in asset types, industry distribution, and regional layout broadens investment space and raises the long-term return of the portfolio.

Second, respond to the transformation of new and old national drivers and development of strategic emerging industries, providing ample space for insurance funds in diversified investments.

Third, relying on years of accumulated investment capabilities and growing professional standards, including risk management and digital construction in support functions, solidifying the foundation for professional investment.

Wealth Management Opportunities for Life Insurance Companies

The new "National Ten Rules" for the insurance industry have positioned wealth management as the main business and responsibility for insurance companies, greatly enriching and expanding the connotation and extension of insurance. Currently, the public’s demand for value preservation and appreciation of wealth is strong and diverse, consistently flowing into the capital market and insurance products.

We are ushering in a golden opportunity period for wealth preservation and transfer. The advantages of insurance products—stable returns, pension accumulation, intergenerational inheritance—are becoming more prominent. This is the opportunity.

Regarding challenges, the primary challenge for China’s life insurance industry is how, in a low interest rate environment, to manage interest spread risk, achieve effective asset-liability matching and coordinated development. The 10-year treasury bond yield remains low; investment attributes in former non-standard and alternative real estate have significantly weakened, affecting customers’ insurance purchase choices. After large premium inflows, how to transform premiums into long-term returns for customers, overcoming volatility and cycles, will place higher demands on life insurance companies' operational and investment capabilities.

High Base Growth in Premium Income

In 2025, the company achieved remarkable results: total premium growth reached 15%, rapid growth in long-term regular premiums, providing a high base which brings some pressure, but we are confident in maintaining steady growth based on this high base.

In terms of product and competition strategies: First, practice scene plus product plus service plus technology marketing concept, deepening the product model. By introducing external medical resources focused on disease therapy and nursing, enrich health insurance products, and combine pension wealth management products with pension community resources to create an insurance plus pension lodging model, strengthen asset-liability linkage, and support differentiated product development.

Second, in response to diverse pension and wealth management needs in an aging society. In 2026, the focus will remain on risk-dominated increasing whole-life insurance sales, and promotion of long-term annuities, pension annuities, combining these with personal pension system and tax preferential policies, integrating whole-life and pension annuity products into relevant systems to meet customer pension and wealth management needs.

Third, build a health protection product system, providing full-cycle solutions of prevention, control, and rehabilitation, strengthen connection with social security medical reform, and explore dividend health insurance, consumption-type medical insurance, specific drug protection, and nursing disability insurance products.

Regarding risk transformation, the company already achieved initial results in 2025. On the one hand, in sales, a breakthrough was achieved, with dividend insurance sales reaching about 2 billion yuan for the year, attaining expected results under the transformation context. On the other hand, in risk management systems, an initial framework was established, integrating resources from front, middle, and back offices, launching a series of measures focused on evaluation, product control, team training, ecosystem coordination, and compliance guidance, forming a relatively complete risk management system.

AI Layout

In 2026, New China Life Insurance’s AI layout will focus continuously in four directions:

First, in technology governance, relying on the digital committee, comprehensively implementing the "15th Five-Year" technology plan, deepening the twin-drive technology governance structure.

Second, in AI applications, this year seven major digital employees will be created, covering training, customer service, group insurance, claims, policy maintenance, and investment advising in high-frequency areas. Using small and large model collaboration, digital productivity efficiency is expected to increase, equivalent to 3,000 manpower, allowing robots to complete replaceable work and enabling employees to focus on high-value tasks.

Third, deeply explore data value, build an integrated "two-platform five-level" big data architecture so data moves from visibility to usability, becoming the core asset for business growth.

Fourth, consolidate the data base, forming a "one-cloud, multi-new" infrastructure, achieving elastic scheduling and management of computing, storage, AI capability, and network resource pools, ensuring business continuity.

In short, AI has deeply penetrated all aspects of New China Life Insurance’s business and management, becoming the core engine for high-quality development. The company will maintain strategic determination, balance manpower and technology investment, and under the guidance of the "15th Five-Year" tech plan, strive to make AI yield greater effectiveness.

Risk Warning and DisclaimerThe market has risks, and investment needs caution. This article does not constitute personal investment advice and has not taken into account the unique investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions herein are suitable for their specific circumstances. Investments made based on this are at your own risk. ```