China’s five largest insurers have posted their strongest results in years, as a rebound in financial markets and the success of long-term protection products powered a surge in profits across the sector.
But as traditional firms celebrate record returns, they now face an emerging wave of challengers — from e-commerce platforms to automakers — all eager to claim a slice of the country’s 8 trillion-yuan insurance market.
Combined net profit attributable to shareholders for China Life, Ping An, PICC, China Pacific Insurance, and New China Life reached 426 billion yuan (US$58 billion) in the first three quarters of 2025, up 33.5% from a year earlier, according to company filings.
In the third quarter alone, the five companies earned 247.8 billion yuan, a year-on-year increase of 68.3%. The strong results highlight how traditional insurers are riding both a recovery in the equity markets and a shift toward higher-value life insurance policies.
JD.com, Xiaomi, and other technology giants are now accelerating their push into this highly regulated sector. JD.com recently obtained an insurance brokerage license in Hong Kong, while BNP Paribas Cardif Tianxing, partly owned by Xiaomi, officially launched operations on the mainland.
Automakers such as Tesla and BYD, meanwhile, are deepening their involvement in motor insurance, hoping to capitalize on their user data and service ecosystems. As these new entrants move in, the question for incumbents is whether this profit boom can withstand growing competition and an increasingly inverted yield curve.
The explosive growth in profits has been driven by three factors: a powerful rebound in investment returns, a broad recovery in life insurance, and structural improvement in property insurance. On the investment front, the five major listed insurers achieved total investment returns of 887.5 billion yuan in the first three quarters, up 35.6% from the previous year, with the third quarter alone contributing 542.4 billion yuan.
New China Life led the industry with 40.4 billion yuan in net investment income, a staggering 687% surge, delivering an annualized return of 8.6% — an improvement of 1.8 percentage points from a year earlier. China Life’s total investment yield rose to 6.42%, supported by investment income of 368.6 billion yuan, up 41% year-on-year.
A sharp increase in equity allocations was the critical driver. China Life raised its holdings of stocks and funds to 15.2% of total assets, with technology and biomedical shares exceeding 50 billion yuan in market value. The rebound in China’s stock market during the summer months gave insurers the opportunity to lock in short-term gains and strengthen balance sheets weakened by two years of capital market volatility.
The life insurance business has also seen a structural transformation. Expectations of lower guaranteed interest rates encouraged a surge in demand for protection-oriented products. Life insurance premiums rose 24.9% year-on-year in the third quarter, while new business value expanded rapidly.
PICC Life, New China Life, and Ping An Life recorded NBV growth of 76.6%, 50.8%, and 46.2%, respectively. The bancassurance channel became the key growth engine, with Taiping Life’s bancassurance premiums climbing 63.3%, and New China Life’s reaching 66.9 billion yuan.
The share of long-term first-year premiums exceeded half of total sales, and more than 60% of China Life’s new regular-premium products were linked to floating returns, up 45 percentage points from a year earlier. The shift helped insurers reduce liability costs and better match long-term investment returns with obligations.
Meanwhile, the property and casualty segment continued to expand, supported by new growth in non-auto lines. Total P&C premiums reached 1.13 trillion yuan in the first three quarters, a year-on-year increase of 3.6%.
For the first time, non-auto insurance accounted for more than half of total premiums. PICC Property & Casualty, the market leader, improved its combined cost ratio to 96.1%, down 2.1 percentage points, while underwriting profit more than doubled. New energy vehicle insurance became a major driver of growth, with a penetration rate above 40% and an average premium 18% higher than traditional auto policies.
Still, risks are mounting beneath the surface. The 10-year government bond yield has fallen below 1.8%, while many participating and universal policies still guarantee investment returns above 5.5%. This has created a deepening inversion between assets and liabilities.
The five leading insurers have temporarily mitigated the pressure by increasing equity allocations, but the risk remains. For example, New China Life, which holds more than 18% of its assets in equities, could see 80 billion yuan in floating losses if the market declines by 10% in the fourth quarter.
The health insurance segment, often seen as a pillar of inclusive protection, remains underdeveloped. Premiums for the first three quarters totaled 759.9 billion yuan, up just 2.4% year-on-year, and payout levels remain low.
At China Life, 97.6% of health claims were reimbursements, with cancer cases accounting for over 70% of critical illness claims, but the average payout was only 43,000 yuan per case—far below actual treatment costs. Despite the participation of more than 150 million people in inclusive insurance schemes, coverage caps are low and reimbursement ranges narrow.
The survival space for small and medium-sized insurers continues to shrink. Market concentration is rising sharply, with the top ten firms now controlling more than 70% of total market share, and the top ten life insurers accounting for over 80% of premiums.
Many smaller insurers are struggling to maintain solvency amid weak investment capability and limited distribution networks. Between January and September, premiums for a dozen mid-sized P&C insurers fell by more than 20% from the same period last year.
Even within auto insurance, profitability remains a challenge. Although original premiums increased 4.4% to 683.6 billion yuan in the first three quarters, the industry-wide cost ratio still exceeds 94%. For new-energy vehicles, battery repair costs — often accounting for 40% to 60% of total vehicle value — have driven claim ratios above 110% for some insurers, squeezing already thin margins.
As traditional insurers celebrate record results, internet and technology firms are reshaping the landscape. Xiaomi-backed BNP Paribas Cardif Tianxing Insurance has officially launched, JD.com has secured its Hong Kong brokerage license, and Tesla and BYD are ramping up their self-operated insurance businesses. BYD’s insurance operations have already exceeded 5 billion yuan in scale.
For these companies, the entry into insurance is a strategic move. JD.com, which has hundreds of millions of active users, can now integrate insurance products such as return shipping coverage and smartphone damage protection directly into the shopping experience.
In 2024, JD Allianz Insurance reported premiums exceeding 10 billion yuan, with more than 60% generated through online channels. For automakers, insurance represents the crucial link connecting vehicle sales, after-sales service, and data feedback. BYD uses self-operated insurance to lower maintenance costs and enhance customer loyalty, while Tesla sees insurance as the entry point to its autonomous driving ecosystem.
Data is the lifeblood of these new insurance models. Internet and auto companies have natural advantages in collecting and analyzing user data, enabling them to price policies more accurately. JD.com has access to consumer spending habits, Xiaomi gathers smart-device usage patterns, and Tesla monitors real-time driving behavior through onboard sensors.
Tesla’s driver safety score system, which assesses over a dozen indicators such as collision warnings and braking frequency, generates a dynamic score linked directly to insurance premiums. This represents one of the world’s most advanced usage-based insurance models.
The new regulatory environment is also creating opportunities. The “report-and-implement-as-one” policy for non-auto insurance, which came into effect on November 1, 2025, aims to curb price competition while rewarding firms with technological and compliance capabilities. Hong Kong’s open insurance market, where new long-term premiums surged 50.5% to HK$173.7 billion in the first half of 2025, is also attracting mainland tech companies.
Overseas precedents provide lessons for China’s newcomers. Tesla, after acquiring Markel Corp. to secure a brokerage license, now sells self-operated insurance in 12 U.S. states. It wrote US$497 million in premiums in 2023, more than doubling from the previous year, though the unit still posted a US$16 million loss due to operational inefficiencies.
Amazon, meanwhile, has taken a lighter approach. Its insurance offerings began with liability coverage for merchants, later expanding into employee health and extended auto warranties. By 2024, Amazon’s insurance revenue had topped US$2 billion, marking its first profitable year.
In China, traditional insurers are mounting a vigorous defense. The five industry leaders invested more than 300 billion yuan in technology last year to accelerate digital transformation. Ping An Property & Casualty now handles 90% of minor cases through AI claims assessment, achieving an accuracy rate of 98.7% and cutting processing times from six minutes to 1.5 minutes.
China Life’s direct settlement platform processed 5.98 million claims totaling 3.2 billion yuan in the third quarter. China Pacific Insurance has expanded its “CPIC Home” senior living communities to 14 locations across 12 cities, maintaining occupancy rates above 80%. PICC Health Insurance has signed partnerships with 2,000 medical institutions to strengthen its healthcare ecosystem.
Yet challenges remain. Ping An’s agent force has been streamlined to 354,000 but still cannot compete with the traffic volumes of internet platforms. Organizational silos continue to prevent the effective sharing and mining of user data. As Ping An’s Chief Digital Officer Xiang Youzhi put it, “The challenge of digital transformation for traditional insurers isn’t about technology—it’s about changing the organizational structure and corporate culture.”
The insurance industry is entering an era of convergence, where the boundaries between finance, technology, and mobility are blurring. “In the future, insurance products will be embedded in consumption, healthcare, and transportation scenarios,” a China Pacific Insurance executive told Barron’s China. “Whoever can unlock the value of data will hold the pricing power.”
For China’s traditional insurers and its fast-moving technology challengers alike, the battle for dominance is only beginning — and in the digital era, the rules of the game are being rewritten.
