Live coverage of PICC's earnings conference: will focus more on core business and pursue differentiated development

Ask AI · How can PICC People’s Insurance of China respond to industry competition through misaligned (out-of-phase) development?

21st Century Business Herald reporter Lin Hanyao

In 2025, PICC People’s Insurance of China’s original insurance premium income was CNY 738.333 billion, up 6.5%. Insurance service income was CNY 570.717 billion, up 6.1%. Net profit was CNY 63.0333 billion, up 9.0%. Total assets reached CNY 2,027.683 billion, up 14.8%; equity attributable to shareholders was CNY 308.991 billion, up 15.0%. Total investment return was CNY 92.3233 billion, up 12.4%.

At the PICC People’s Insurance of China’s 2025 annual performance release, Chairman Ding Xiangqun and other members of the management team provided a detailed breakdown of the financial report figures and looked ahead to the future strategy.

Ding Xiangqun said this year is the first year for “the Fifteenth Five-Year Plan” (15th Five-Year Plan) to get started. PICC People’s Insurance of China will focus more on its core business and pursue misaligned development, so as to effectively play the role of the “keystone” in its property and casualty insurance line, build the “new engine” role in its life insurance line, strengthen the “driver” role in its investment line, activate the “accelerator” role in its technology line, and form a tiered development pattern in which the core business is even more distinct, the layout is more optimized, and the structure is more balanced.

Non-auto insurance combined ratio is expected to decline year-on-year

Looking at overall operating indicators, in 2025 PICC People’s Insurance of China achieved original insurance premium income of CNY 555.777 billion for property and casualty insurance, up 3.3%. Its combined ratio recorded 97.6%, the best level in recent years, delivering underwriting profit of CNY 12.4 billion, up 75.6%.

With respect to the market’s keenly watched profitability trends in auto insurance and non-auto insurance, Zhang Daoming, a member of the Party Committee and Party Secretary of PICC Property & Casualty, made predictions at the press conference.

Regarding the non-auto insurance sector, Zhang Daoming noted that for many years, the industry’s non-auto insurance has been in persistent losses, and competition “breeds in particular fields” (i.e., has become inward and overly intense) is particularly prominent. With regulators launching “comprehensive governance” for non-auto insurance, PICC Property & Casualty has, starting from November 1, 2025, comprehensively begun implementing non-auto insurance policies being issued with fees (fee-based issuance). The effectiveness of receivable premium management has been significant, and the rate of receivable premiums for non-auto insurance has fallen sharply.

Zhang Daoming expects that in 2026, the effectiveness of the “comprehensive governance” of non-auto insurance will first be reflected in the comprehensive expense ratios of policy categories such as corporate property insurance (including employer-employee-related property coverage), employer liability insurance, and production safety liability insurance. The comprehensive expense ratios of the above categories are expected to decline by more than 2 percentage points year-on-year; under the premise that other influencing factors remain unchanged, PICC Property & Casualty’s non-auto insurance combined ratio is expected to decline year-on-year, achieving underwriting profitability.

On the industry’s pain point in new energy vehicle insurance, Zhang Daoming frankly said it is currently facing three major challenges: first, the claim occurrence rate for new energy vehicles is much higher than that for fuel vehicles; second, insufficient socialized repair channels lead to relatively higher vehicle repair costs; and third, both the proportion of bodily injury cases and the compensation standards are showing an upward trend.

At the same time, he emphasized the positive factors that are becoming visible in the industry: influenced by multiple factors such as the increasing share of used cars and improvements in driving behavior habits, the claim occurrence rate for new energy vehicles has shown a downward trend; the state requires the mandatory installation of the Automatic Emergency Braking system (AEB), and the risk of payout for new energy trucks will be improved; and the preparation of a domestic risk classification system for new energy vehicle models will also drive automakers to improve model safety and repair economics.

Based on this, Zhang Daoming expects that in 2026 the combined ratio for new energy vehicle insurance will further improve, and the level of profitability will further rise.

Continuously pay attention to OCI high-dividend stock allocation

Against the macro backdrop of the decline in the interest-rate center and the 10-year government bond yield falling to 1.85%, the investment operations of insurance funds face severe tests.

But in 2025, PICC People’s Insurance of China achieved a total investment return of CNY 92.3233 billion, up 12.4%; total investment yield was 5.7%; net investment return was CNY 58.747 billion, up 2.5%, with net investment yield at 3.6%.

As of December 31, 2025, PICC People’s Insurance of China’s invested asset scale reached CNY 1,901.634 billion, up 15.8% from the beginning of the year.

In a low-interest-rate environment, Cai Zhwei, vice president of PICC People’s Insurance of China, provided a detailed interpretation of the company’s response strategy at the press conference.

Cai Zhwei said PICC People’s Insurance of China proactively responds from three aspects: first, strengthen fixed-income (interest-rate-sensitive) and actively managed investment operations, increase allocation to long-duration bonds, so as to narrow the duration gap and at the same time obtain stable coupon (interest) income, thereby enhancing the return contribution of fixed-income assets; second, increase the contribution of high-dividend stocks to net investment returns, further strengthen the long-term orientation of equity investments, and seize long-term investment opportunities in high-quality assets that align with the direction of national strategy; third, promote a transition toward alternative investments, focusing on making debt larger and stronger, making equity stronger, making physical assets better, and proactively exploring alternative asset investment opportunities that provide stable cash returns.

Looking ahead to 2026, Cai Zhwei said PICC People’s Insurance of China will adhere to the concepts of long-term investment and value investment. For fixed-income investment, it will focus on differentiated allocation across sub-accounts. For equity investment, it will continue to focus on the allocation to OCI high-dividend stocks, while also focusing on growth opportunities embedded in the “Fifteenth Five-Year Plan” (15th Five-Year Plan).

Regarding the outlook for the next three years, Cai Zhwei said it will continuously optimize asset allocation by精细 and enhancing fixed-income asset investment, continuously optimizing equity asset allocation and investment strategies, and continuously advancing the development of innovative alternative businesses such as asset securitization and investments in physical assets. It will take multiple measures to maintain net investment returns at a relatively stable level.

More focused on core business, misaligned development

2026 is the first year of the “Fifteenth Five-Year Plan” (15th Five-Year Plan). At the press conference, Ding Xiangqun set out the company’s strategic framework for the next five years.

Ding Xiangqun made it clear that “PICC People’s Insurance of China will focus even more on its core business and pursue misaligned development, so as to effectively play the ‘keystone’ role of the property and casualty insurance line, build the ‘new engine’ role of the life insurance line, strengthen the ‘driver’ role of the investment line, and activate the ‘accelerator’ role of the technology line.”

On the specific path, Ding Xiangqun said PICC People’s Insurance of China will better adapt to the trend of upgrading of the economic structure, anchor on the two directions of upgrading consumption on the demand side and new quality productive forces on the supply side. It will craft a new growth curve for property and casualty insurance development and accelerate the building of PICC Property & Casualty into a globally leading property and casualty insurer with strong protection capability, strong business strength, reasonable structure, and international competitiveness.

It will place more emphasis on capturing the changes in residents’ wealth structure, fully leverage insurance’s comparative advantages in family protection and wealth inheritance, and accelerate building PICC Life into a first-class life insurer characterized by value growth, a lean and strong workforce, leading services, and strong asset accumulation capabilities. It will lead and promote the integrated development of health insurance and health management, strengthen capabilities in specialized fields, and accelerate the building of PICC Health into a first-class health insurer with effective functions, outstanding advantages in health management, and top-tier positioning in both quantity and quality.

It will further leverage the characteristics of insurance as patient capital, strengthen the ability for active investment and absolute returns, grow third-party asset management (3rd-party AUM), and enhance the value creation capability of the investment line, thereby achieving a higher level of dynamic balance between assets and liabilities.

It will more actively and prudently advance international development. It will explore international development based on resilience and preparedness, and explore ways of providing international services based on overseas demand for integrated services. It will also be more proactive in seizing opportunities arising from the development of artificial intelligence, deepen reforms of the science and technology system and digitalization initiatives, accelerate the release of technological productivity, and seize the commanding heights of digital and intelligent transformation.

Looking ahead to 2026, PICC People’s Insurance of China’s President Zhao Peng set out specific operating targets: in terms of reasonable growth in volume, ensure that premium income growth aligns with the GDP growth trend; in terms of effective improvement in quality, it will continuously optimize the business structure, strengthen asset-liability management, advance cost reduction, quality improvement, and efficiency enhancement, and ensure profitability remains at a relatively good level. Key quality and performance indicators, such as the combined ratio for property and casualty insurance, the growth rate of new business value for life insurance, and the investment yield, will continue to stay at leading levels in the industry.