[Insurance Company Annual Report Observation] Health insurance is being "marginalized"

Reporter Jiang Xin

The total premium scale of personal insurance reaches 2.3 trillion yuan, accounting for 52.8% of the total premiums in the personal insurance industry; the combined net profit attributable to the parent company reaches 458.66 billion yuan, a year-on-year increase of 26.6%—this is the 2025 performance report from seven insurance companies listed on the A-shares and Hong Kong stocks.

The growth in listed insurance companies’ performance is driven by two main factors: the expansion of bancassurance channels on the liability side and a significant increase in investment income on the asset side.

While insurance executives at the performance conference discuss the development of bancassurance channels and the rising proportion of dividend insurance premiums, some “slowing” data are overlooked: the premiums for accident and health insurance (collectively referred to as “Yi Jian Insurance,” abbreviated as “accident insurance” and “health insurance” respectively) are experiencing negative growth. These two types of insurance better reflect the insurance company’s protective functions.

Statistics show that among six listed insurance companies that disclose Yi Jian Insurance data (Taibao Life Insurance did not separately disclose health and accident insurance data, so no comparison was made), only PICC Life Insurance’s health insurance and accident insurance businesses showed positive growth.

China Life’s health insurance business achieved a 0.9% increase in premiums, while its accident insurance premiums decreased by 13.5% year-on-year; China Ping An, which combines life insurance and health insurance disclosures, also saw its long-term health insurance and short-term accident insurance premiums decline by 1.7% and 11.3% respectively; Taiping Life’s long-term health insurance and short-term accident insurance premiums fell by 3% and 4.5%; Sunshine Insurance’s health and accident insurance premiums decreased by 2.3% and 9.9% respectively, although its new single business in bancassurance channels grew by 70% in 2025; New China Insurance’s health and accident insurance premiums declined by 3.4% and 2% respectively in 2025, but the company’s new single sales of wealth management products through bancassurance channels increased by over 50%.

As growth in protection-type businesses stalls, the proportion of Yi Jian Insurance premiums in total premiums for several large companies remains low. For example, New China Insurance has the highest proportion at 26.3%, followed by Taiping Life at 21.8%; China Ping An ranks third with a combined Yi Jian Insurance premium share of 21.2%; China Life and Taibao Life have proportions below 20%, at 18.1% and 13.3% respectively; Sunshine Life’s Yi Jian Insurance premiums account for only 10.4%.

Not only the leading listed insurers face this issue, but the overall personal insurance industry also struggles with slow growth in protection-type businesses. Taking health insurance, which has a larger scale, as an example, the industry achieved health insurance premiums of 997.3 billion yuan in 2025, an increase of nearly 20 billion yuan over 2024, mostly contributed by property insurance companies. Data show that in 2025, the growth rate of health insurance premiums for personal and property insurance companies was -0.41% and 11.31%, respectively.

As a financial institution, insurance companies have unique advantages in meeting clients’ wealth management and retirement planning needs, but their core role is risk management. Their fundamental function is to use the law of large numbers and risk diversification mechanisms to spread individual risks across a group, providing financial compensation when risks occur, and preventing individuals or families from falling into financial hardship due to accidents, illnesses, or death.

For a long time, the premium sources of Chinese personal insurance companies have been dominated by savings-type products such as dividend and universal life insurance. Many of the highest-premium products from large insurers are also savings-oriented, such as participating whole life, endowment, and annuity insurance. This heavily interest-margin-dependent business model is highly susceptible to market fluctuations and interest rate changes. China Pacific Insurance Chairman Fu Fan stated at the earnings release that China has entered a low-interest-rate era, and the traditional profit model relying on interest margins urgently needs to change.

In their earnings reports, many insurers achieved double-digit growth in net profit attributable to the parent company for the full year. However, it is noteworthy that due to market reasons, China Life and China Re suffered losses in the fourth quarter of 2025, and China Ping An and New China Insurance also experienced a decline in quarterly net profit attributable to the parent. China Life explained that the main reason for the loss in the fourth quarter was structural adjustments in the capital markets, with some stocks and funds held by the company experiencing corrections in Q4 2025.

According to Tian Meipan, Vice President, Chief Actuary, and Chairman of China Re Life, the key to insurers maintaining resilience amid market volatility is whether they have sufficient underwriting profits. Tian said at the performance conference that whether it is dividend or non-dividend insurance, or whether it is lifelong medical or lifelong annuities, these are mainly savings products, and the underwriting profit for such products is very small. Diversified sources of profit are very important.

With the aging population, increasing demand for health protection, and rising pressure on medical insurance funds, the health insurance market has broad prospects. This is a new growth point worth increasing investment for insurance companies.

For example, in medical insurance, data show that the median claim ratio is 41%, leaving considerable profit space for insurance companies. Tian believes that medical insurance will also have reasonable underwriting profits in the future, and additional profit sources such as health management and pharmaceutical services will create further value for medical insurance.