Summary of Key Performance
China Life Insurance’s performance in the first half of 2026 was outstanding: total premiums exceeded 530 billion yuan, with the first-half premium income from new customers surpassing 100 billion yuan for the first time; new business value (potential future profits) increased by 33.7% year-on-year; and investment returns reached 5.58%, driving a surge in net profit by 228.6%. Although the new accounting standards have amplified short-term profit fluctuations, the company remains committed to long-term value creation, emphasizing the stability of its investments and a long-term focus on the real economy, particularly in emerging technologies and innovative industries, with the goal of becoming a “long-term partner” for these innovative enterprises.
Detailed Analysis
1. Comprehensive Success in the First Half of the Year: All Metrics Exceeded Expectations
- Total Premiums at 536.6 Billion Yuan + New Customer Premiums Exceeding 100 Billion Yuan: The total premiums represent the total amount collected from customers during the first half of the year, indicating a steady increase in customer demand for insurance. The fact that new customer premiums exceeded 100 billion yuan is particularly significant, as it suggests that these new customers are likely to continue providing stable income for the company in the long term, enhancing both customer loyalty and long-term profitability.
- New Business Value (NBV) Increased by 33.7%: New business value (NBV) refers to the present value of future profits from newly sold insurance policies. A 33.7% increase indicates that the new business is of high quality, as it reflects the sale of more high-value, long-term products with significant potential for future profits.
- Investment Returns Boosted Net Profit: An investment return of 5.58% (2.29 percentage points higher than the same period last year) resulted in total investment earnings of 314.5 billion yuan, which significantly increased net profit by 228.6%. This was mainly due to the favorable stock market conditions, leading to appreciation of the company’s investments in stocks and funds.
2. Are New Accounting Standards Causing Greater Profit Fluctuations? The Company’s Perspective: A Short-Term Phenomenon
- Impact of New Standards: Previously, gains and losses from investments in stocks and funds (not yet realized from sales) were not directly reflected in the current period’s profits. The new standards require that such gains and losses be recognized in profit immediately, which can lead to larger fluctuations in profit when the stock market rises or falls.
- Company’s Approach: Vice President Liu Hui stated that these fluctuations are temporary and do not reflect a change in the company’s actual operational capabilities. For example, if the stock market performs well in the first half of the year, profits may increase significantly; however, if it performs poorly in the second half, profits could decline. The company is considered a “patient investor” capable of weathering such fluctuations and identifying opportunities during market downturns (such as purchasing quality assets at lower prices).
3. Average Annual Return of Over 5% Over the Past 20 Years: Strong Long-Term Investment Capability
- Stable Long-Term Returns: The company has achieved an average annual investment return of 5.15% over the past 20 years, demonstrating a consistent investment strategy regardless of market conditions (such as the 2008 financial crisis and the 2020 pandemic). This indicates that the investment team has a solid approach and does not rely on luck.
- How They Achieve This: Liu Hui explained that the company does not change its long-term strategy based on short-term market trends. For instance, it does not invest all its funds in stocks when the market is rising or sell them all when it is falling. Instead, the company adjusts its investment portfolio to maintain a balanced mix of assets, such as reducing stock holdings and increasing bond investments to maintain a proper risk allocation.
4. Focusing on Emerging Technologies and Innovative Industries: Becoming a “Long-Term Partner” for Innovative Enterprises
- Significant Investment in the Real Economy: The company invests over 6 trillion yuan in the real economy, accounting for more than 80% of its total assets, with a focus on emerging technologies and innovative industries. The investment in these areas has grown by 30% annually, indicating a continuous increase in commitment.
- Diverse Investment Methods: The company uses various methods, including direct equity investments, PE funds, and master funds, to diversify its investments. It has invested in both established companies like Changxin Technology (in the semiconductor industry) and promising startups like Qiangnao Technology.
- Long-Term Vision: The company’s goal is not to make quick profits from individual investments but to identify and support high-quality enterprises over the long term, acting as their partners. It plans to further expand its investments in areas such as artificial intelligence, semiconductors, healthcare, and green energy.
Conclusion
China Life Insurance’s impressive performance in the first half of the year is a result of both short-term market gains and long-term strategic investments, such as in high-value new businesses and stable investment capabilities. Although the new accounting standards have increased profit volatility, the company’s clear long-term focus on the real economy and emerging technologies ensures its fundamental strength and promising future prospects for both investors and customers.