Following the collective surge during the 2024 ‘bull market for both stocks and bonds,’ A-listed insurers exhibited significant performance divergence in the first quarter of 2025. Overall, China Ping An, PICC, China Life, CPIC, and New China Life reported a combined net profit attributable to parent companies of RMB 841.76 billion, a slight year-on-year increase of 1.4%. Among them, PICC and China Life saw profit growth of around 40%, while Ping An, the largest and most complex in business structure, underperformed with revenue and net profit declining by 5.2% and 26.4%, respectively—the sharpest drop among listed insurers during the same period.
The magnitude of Ping An’s profit volatility appears unexpectedly high, especially given its strong performance in 2024. On the liability side, Ping An led A-share insurers with a premium growth rate of 7.17%, 4.47 percentage points higher than PICC, the second-ranked. On the investment side, its comprehensive investment yield also topped the industry, with a net investment yield only 0.1 percentage points lower than PICC’s. However, by Q1 2025, Ping An’s profit gap with PICC, which had been closely trailing it the previous year, widened significantly. Analysis reveals that Ping An’s performance divergence stems from multiple factors: fluctuations in its investment portfolio amid bond and equity market movements, accounting method differences under new standards, and its more intricate business model as a comprehensive financial group. Excluding short-term investment volatility and focusing solely on its core insurance business, Ping An’s operating profit attributable to parent companies grew by 2.2% year-on-year, with life and health insurance rising by 4.99%. Looking beyond short-term fluctuations, even as Ping An’s core business remains stable, it must find new leverage points amid declining interest rates and intensifying ‘asset shortages.’ Notably, Ping An recently updated its 2025-2027 development plan, emphasizing a deepened ‘integrated finance + healthcare and elderly care’ strategy to build differentiated competitiveness in a saturated, homogeneous financial market. The ‘deceleration puzzle’ lies in Ping An’s Q1 profit of RMB 270 billion under the new accounting standards—not low historically but a notable retreat from its 2023-2024 peak. Compared to peers’ 30-40% profit growth, its nearly 30% decline stands out. The primary driver of this volatility remains investment yield shifts. In Q1 2024, fixed-income assets experienced a bull market: 10-year and 30-year government bond yields fell by 27 and 38 basis points, respectively, while bond trading volume surged 42% year-on-year.In Q1 2025, the bond market experienced a notable correction, with the 10-year government bond yield rising from 1.6% to 1.90%. By the end of the quarter, the yields of 1-year government bonds, 10-year government bonds, and 10-year policy bank bonds had increased by 45, 14, and 11 basis points, respectively.
In contrast, the stock market showed signs of recovery with relatively muted volatility compared to the same period last year. While the Shanghai Composite Index fell by 0.5% in 2025, it had risen by 2.2% in 2024. Hong Kong stocks, favored by insurance capital, saw significant gains: the Hang Seng Index and Hang Seng Tech Index surged by 15.3% and 20.7%, respectively, in Q1 2025, compared to declines of 3% and 7.6% in the same period last year. The divergence between bonds and stocks may serve as a turning point for performance. Although insurers adopted a “barbell strategy” in asset allocation, variations in weightings, targets, and timing could still lead to differences in investment returns. Ping An and CPIC, which reported declining profits in Q1, exhibited a higher inclination toward bond allocations at the end of 2024, being the only two A-share insurers with bonds accounting for over 60% of their investment assets. However, given the subsequent bond market performance and declining interest rates, the Q1 volatility may soon be offset. Under the new accounting standards, the classification of equity investments could further widen the gap in investment returns among insurers. Companies like NCI, China Life, and PICC reported substantial increases in investment income in Q1, with PICC attributing the improvement to “implementing requirements for medium- to long-term capital market participation.” While Ping An’s equity allocation at the end of 2024 was not significantly lower than these peers, its performance divergence may stem from asset classification. The new standards categorize financial assets into three types: AC (amortized cost), FVTPL (fair value through profit or loss), and FVOCI (fair value through other comprehensive income). OCI market value fluctuations do not affect current profit or loss, allowing insurers to hold long-term, strategic equity assets in this account. Gains or losses from such assets are not reflected in the income statement. Ping An, as an early adopter of the new standards, has a notably higher proportion of equities in its OCI account compared to peers, which may explain why some appreciating assets were not realized in its Q1 financials. Additionally, Ping An’s status as a diversified financial group adds further complexity to its business model.Currently, Ping An operates six business segments: life and health insurance, property and casualty insurance, banking, asset management, financial empowerment, and other businesses.
The financial empowerment segment includes member companies such as Lufax, OneConnect, Ping An Health, and Autohome. This diversified business portfolio supports Ping An’s core operations and strategy, resulting in performance fluctuations that differ from industry peers. After adjusting for short-term volatility, Ping An’s insurance and asset management businesses showed growth. However, banking performance declined significantly by 5.59%, while the group’s overall operating profit edged up by 2.43%. For the insurance industry, where liabilities span decades, short-term profit changes are not a reliable reference. For a financial giant like Ping An, strategic direction matters more than volatility. Reflecting on past strategies, Ping An has explored multiple avenues for growth: On one hand, its technological focus became clearer. Starting in 2012, technology emerged as a key theme in Ping An’s annual reports. In 2017, Ping An outlined plans to deepen “finance + technology” over the next decade, applying innovative technologies to traditional finance, healthcare, automotive, real estate, and other sectors as a “new engine” for growth. That year, it reclassified subsidiaries like Lufax, Ping An Good Doctor, OneConnect, and Autohome under the “technology business” segment, reporting them separately in annual reports. Three years later, technology business profits peaked, contributing nearly RMB 8 billion to the group. Subsequently, performance in this segment fluctuated sharply and declined year after year. By 2024, the technology business posted a loss of RMB 29 million, prompting Ping An to rebrand it as “financial empowerment,” emphasizing its supportive role. The group stated it would “continue to build leading technological capabilities, widely applied to core financial businesses, while accelerating ecosystem development.” On the other hand, healthcare and wellness have gained increasing importance. In 2017, Ping An’s strategy remained exploratory, with aggressive ambitions across five ecosystems: finance, healthcare, automotive, and real estate. Post-2022, it narrowed its focus to “integrated finance + healthcare,” prioritizing a service system offering “financial advisory, family doctors, and elderly care management.” Today, the life insurance industry faces unprecedented challenges. While Q1 profits varied among listed insurers, the underlying issues are similar: First, against a backdrop of declining interest rates and persistent “asset shortages,” how to align assets and liabilities. Second, without interest rate advantages, how to ensure product competitiveness in a homogenized market.Amid challenges, the choice of a “second growth curve” is critical. Ping An’s answer is to continue on the path of “integrated finance + healthcare and elderly care.” In its three-year plan, Ping An highlights the rapid growth in demand for commercial healthcare and elderly care services due to rising medical needs, uneven resource allocation, an aging population, and evolving elderly care models.
The company states, “The group seamlessly integrates differentiated healthcare and elderly care services with its financial operations to empower its core financial business.” From this perspective, Ping An has shown consistent improvement across multiple metrics. For example, its integrated healthcare and elderly care resources as a payer have already been launched in the market. By the end of Q1, its home-based elderly care services covered 75 cities nationwide, and its elderly care community projects were established in five cities. Within its self-operated healthcare ecosystem, the revenue of Peking University Medical Group, acquired in 2021, remained stable. Meanwhile, Ping An Health’s online consultation platform now offers nine specialized departments with round-the-clock services. Ping An claims, “The healthcare and elderly care ecosystem creates independent direct value and indirect value, empowering the core financial business.” This advantage is reflected in key metrics. By the end of Q1, nearly 63% of Ping An’s customers enjoyed healthcare and elderly care benefits, with average contracts and AUM per customer being 1.6 times and 4.0 times higher, respectively, than those of regular individual customers. This has also driven growth in customer numbers, retention rates, and insurance product penetration. In Q1, Ping An’s life insurance product penetration reached 45.8%, up 0.9 percentage points from the beginning of the year. The new business value of its life and health insurance business reached RMB 12.891 billion, a year-on-year increase of over 30%. However, as aging accelerates, Ping An is not the only leading insurer focusing on healthcare and elderly care. For instance, China Life ranked first in the personal pension business in 2024 and has established 17 institutional elderly care projects across 14 cities. CPIC has actively participated in pilot programs for exclusive commercial pension insurance and personal pensions, with its CPIC Home projects launched in 13 cities (15 locations) and offline home-based elderly care experience centers in 127 cities. With years of experience and vast resources, Ping An has its advantages. But how it will build an effective moat in this emerging “blue ocean” of healthcare and elderly care remains to be seen. Risk Warning and Disclaimer: The market carries risks, and investments require caution. This article does not constitute personal investment advice nor considers individual users’ specific investment goals, financial situations, or needs. Users should assess whether any opinions, views, or conclusions herein align with their circumstances. Investments made accordingly are at the investor’s own risk.
