Life and Health Insurance Growth Potential Amidst Challenges

Life and health insurance now accounts for over 60% of total premiums, driven by robust demand, according to a recent analysis by Morningstar. People's Insurance Co (Group) of China Ltd (PICC) is experiencing varied financial projections. While growth in its life and health division appears strong, its property and casualty (P&C) segment is anticipated to see only gradual improvement.

The Morningstar report, released on March 30, 2026, indicates that PICC's profit expansion decelerated to 9% in 2025, down from 29% in earlier months, primarily due to a fourth-quarter loss amounting to $25.7 million (CNY176 million). This downturn has largely been attributed to diminishing investment returns and slower premium growth, which might impact short-term earnings further.

Life and health insurance is projected to continue being a significant growth driver. This segment's contribution to total premiums exceeds 60%, benefiting from a sustained interest in protection and savings products. This steady demand is expected to facilitate growth in upcoming periods.

For the P&C segment, the outlook remains cautious. The underwriting results, especially in non-auto areas, have underperformed expectations, with a combined ratio of 100.8% reflecting underwriting challenges. Agricultural insurance faces additional hurdles linked to pricing limitations imposed by local government fiscal policies. Consequently, profitability improvements in P&C are predicted to be incremental, with competitive pressures and pricing restrictions posing ongoing challenges.

Investment performance also plays a crucial role in the company's future earnings. Given the downturn in investment returns in 2025, market conditions could further influence financial results, adding to the uncertainty surrounding PICC's comprehensive outlook.