ZhongAn Net Profit Increases Over 80%, Management Says No Repurchase Plans in Near Term

AI Inquiry · ZhongAn Net Profit Growth Exceeds 80%, What Are the Key Drivers Behind It?

Driven by both underwriting and investment sides, ZhongAn Online Property & Casualty Insurance Co., Ltd. (06060.HK, referred to as “ZhongAn”) achieved significant net profit growth in 2025.

According to ZhongAn’s 2025 annual performance report released on March 19, net profit attributable to the parent company reached 1.102 billion yuan, an increase of 82.55%. After considering valuation changes or impairments of holdings in joint ventures, the adjusted net profit attributable to the parent was even more substantial, increasing by 198.3% to 1.8 billion yuan.

Financial data shows that ZhongAn’s large profit increase last year was driven by both the underwriting and investment sides.

On the underwriting side, ZhongAn’s comprehensive cost ratio for 2025 was 95.8%, an improvement of 1.1 percentage points compared to the same period in 2024. The combined ratio was 57.1%, and the expense ratio was 38.7%. In 2025, ZhongAn achieved underwriting profit of 1.412 billion yuan, a 42.5% increase over 2024, marking five consecutive years of underwriting profitability.

In terms of premiums, ZhongAn’s total premiums in 2025 reached 35.735 billion yuan, a year-on-year increase of 6.9%. The main growth drivers were health and auto ecosystems, with premiums increasing by 22.7% and 34.6%, respectively. Notably, new energy vehicle insurance premiums surged approximately 206.2% year-on-year, accounting for over 28.3% of total auto premiums, becoming one of the core growth engines.

Compared to this, the digital lifestyle ecosystem, which accounts for the largest share of ZhongAn’s total premiums, saw a slight decrease of 1.4% year-on-year. ZhongAn Vice President and Chief Investment Officer Li Gaofeng stated at the earnings release that this was mainly due to the overall contraction of the reinsurance industry. However, emerging sectors such as pet insurance and low-altitude economy-related insurance performed well, with core innovative business pet insurance premiums increasing nearly 88.2% year-on-year.

“Currently, the domestic pet economy continues to thrive, with urban pet numbers exceeding 120 million. As the industry heats up, pet insurance premiums have grown rapidly. However, compared to mature overseas markets, there is still significant room for penetration, and future growth potential should not be underestimated,” said Jiang Xing, General Manager of ZhongAn, at the earnings presentation.

Additionally, due to a contraction in business scale, ZhongAn’s consumer finance ecosystem premiums declined by 10.6% in 2025. Li Gaofeng mentioned that this year, the focus will remain on core products with long-term user value such as health, pet, and auto insurance, while further optimizing and reducing the scale of consumer finance ecosystem business.

On the investment side, benefiting from the overall rebound of capital markets throughout the year, ZhongAn’s total investment income from insurance investments increased significantly by 59.1% year-on-year, also becoming a key driver of the rise in net profit attributable to the parent. Li Gaofeng said that in equity investments, the company seized market opportunities and increased holdings appropriately in 2025. As of December 31, 2025, the proportion of equity assets increased from 6% at the end of 2024 to 9%, achieving good returns through sector structure optimization. In 2026, ZhongAn will continue to actively allocate equity assets, balancing investment opportunities in high-dividend-yield sectors and technology growth sectors.

Despite solid fundamentals, ZhongAn’s stock price has faced pressure this year. According to Choice data, ZhongAn’s stock price has fallen 9.82% so far in 2025. During the earnings conference, when asked whether the company is considering share buybacks, Li Gaofeng responded that ZhongAn aims to position itself for faster growth in the future. The company has already achieved stable profitability and hopes to expand profit scale under sufficient capital conditions, aiming for high-speed growth. Therefore, there are no share buyback plans in the short term.

(This article is from First Financial)