China Life(HK:02628) Hua Er Jie Jian Wen·2026-01-28 10:08Core Viewpoint - China Life Property & Casualty Insurance Co., Ltd. (China Life P&C) demonstrated a "balancing act" in its 2025 performance, reporting a net profit of 3.976 billion yuan, which doubled compared to 1.948 billion yuan in 2024 [1][2]. Group 1: Financial Performance - The net profit growth was primarily driven by a strong recovery in investment returns rather than a significant increase in premium income, which only saw a slight rise of approximately 1.5% to 112.834 billion yuan from 111.183 billion yuan in 2024 [4]. - The combined ratio improved from 100.48% in 2024 to 99.56% in 2025, indicating a shift from underwriting losses to profitability, with the company earning 0.44 yuan for every 100 yuan in premium income [5]. - The comprehensive expense ratio decreased to 25.41% from 26.49%, while the comprehensive claims ratio slightly increased from 73.99% to 74.15%, highlighting a focus on cost control to achieve underwriting profits [5]. Group 2: Investment Performance - The financial investment yield reached 4.77% in 2025, significantly higher than 2.94% in 2024 and above the three-year average of 2.53%, making it a crucial contributor to profit growth amid stagnant premium growth [6][7]. Group 3: Capital Management - China Life P&C continued to strengthen its capital position, issuing 4.5 billion yuan in capital supplement bonds in Q4 2025, which increased its actual capital by 2.832 billion yuan [10]. - As of the end of 2025, the comprehensive solvency adequacy ratio stood at 218.33%, and the core solvency adequacy ratio was at 184.38%, both above regulatory requirements, providing a safety net against future business fluctuations and potential risks [10]. Group 4: Management and Compliance - In 2025, China Life P&C appointed a new chairman, Li Zhuyong, who previously served as vice president of PICC Group, indicating a potential shift in strategic direction under the new leadership [11]. - The company faced compliance challenges, receiving 26 administrative penalties totaling 5.3095 million yuan in Q4 2025, primarily for issues related to "untrue financial business data" and "false underwriting claims" [11]. - The management is tasked with balancing performance growth while enhancing internal controls and compliance, as the company navigates the dual pressures of slim underwriting profits and investment volatility [12].