China’s insurance sector is witnessing a remarkable transformation, led by industry giant PICC (People’s Insurance Company of China). On August 28, PICC’s A-share (601319) rose by 2.23%, outperforming the insurance sector, while its H-shares (1339.HK and 2328.HK) surged by 5.82% and 3.13%, respectively, hitting all-time highs. This impressive performance follows the release of PICC’s half-year results, which exceeded market expectations and underscored the company’s strategic focus on steadily increasing its A-share investment asset scale and proportion. With a net profit of RMB 265.3 billion, up 16.9% year-on-year, and robust growth in premium income, PICC is positioning itself as a dominant force in China’s financial markets. This article delves into the strategies behind PICC’s success, its investment philosophy, and its plans for future expansion. Strong Financial Performance Driving Market Confidence PICC’s half-year results for 2025 have been widely praised by analysts for surpassing expectations. The company reported a net profit attributable to shareholders of RMB 265.30 billion, a 16.9% increase from the previous year. Insurance service revenue reached RMB 2802.50 billion, up 7.1%, while original premium income grew by 6.4% to RMB 4546.25 billion. By the end of June, shareholder equity stood at RMB 2851.11 billion, with total assets reaching RMB 1.88 trillion, reflecting steady growth across key metrics. Key Factors Behind the Stock Rally PICC’s stocks have shown exceptional performance over recent years. Since 2020, PICC Group’s H-shares have surged by 209%, and PICC Property & Casualty (PICC P&C) shares have risen by 184%, significantly outperforming industry peers and broader market indices. PICC’s A-shares have also gained 54% over the past year, reaching a six-year high. According to PICC President Zhao Peng (赵鹏), this rally results from multiple factors: – China’s high-quality economic and social development, which has created historic opportunities for the insurance industry. – An improving regulatory environment that supports sustainable growth. – Enhanced corporate fundamentals and value creation capabilities. Zhao emphasized that PICC will continue to strengthen its market value management through three core abilities: robust growth, effective market communication, and shareholder returns. The company plans to maintain a stable dividend policy, with a proposed cash dividend of RMB 0.75 per share (before tax), a 19.0% year-on-year increase, totaling RMB 33.17 billion. Steadily Increasing A-Share Investment Asset Scale and Proportion One of the standout aspects of PICC’s strategy is its focused approach to investing in A-shares. As of June 30, the company’s investment assets totaled RMB 1.76 trillion, up 7.2% from the beginning of the year. The total investment income for the first half was RMB 414.78 billion, a 42.7% year-on-year increase, with an annualized total investment return rate of 5.1%, up 1.0 percentage points. The annualized net investment return rate was 3.7%, slightly down by 0.1 percentage points. Expanding Equity Investments PICC Vice President Cai Zhiwei (才智伟) highlighted the group’s commitment to long-term equity investments. After PICC Life received approval for a RMB 100 billion long-term investment pilot program, the group established a preparation team to set up a private fund management company. On August 14, the National Financial Regulatory Administration approved the establishment of this company, which will focus on A-share investments. The fund’s strategy will prioritize stocks with long-term value, stable dividends, and strong growth potential, while emphasizing risk management to achieve sustainable returns. Cai noted that PICC is steadily increasing its A-share investment asset scale and proportion. By the end of June, the group’s A-share investment assets had grown by 26.1% from the start of the year, with their share in total investment assets rising by 1.2 percentage points. Looking ahead, PICC plans to diversify its equity investment models, strengthen research on high-quality targets, and increase investments in companies aligned with national strategic goals through methods like private placements, strategic investments, and share acquisitions. P&C Insurance: Anti-Internalization Efforts Paying Off PICC’s property and casualty insurance segment remains a core strength. In the first half of 2025, PICC P&C achieved original premium income of RMB 3232.82 billion, capturing a 33.5% market share. The comprehensive cost ratio improved to 95.3%, the best in a decade, down 1.5 percentage points year-on-year. Underwriting profits soared to RMB 116.99 billion, a 53.5% increase. Progress in Auto Insurance PICC Vice President and P&C President Yu Ze (于泽) attributed these gains to the industry’s successful anti-internalization efforts. In auto insurance, the implementation of the ‘报行合一’ policy (which standardizes pricing and costs) has规范ized competition. PICC P&C’s auto insurance comprehensive cost ratio dropped to 94.2%, down 2.2 percentage points year-on-year. Under the old accounting standards, the expense ratio for auto insurance fell by 18.2 percentage points compared to 2020. Outlook for Non-Auto Insurance While non-auto insurance has yet to show significant improvement, Yu expects the upcoming ‘报行合一’ policies for this segment, likely to be implemented in the fourth quarter, to positively impact 2025 results and significantly enhance performance in 2026. Global Expansion: Tapping into Overseas Opportunities PICC is also making strides in international markets, particularly in新能源车险 (new energy vehicle insurance). Yu Ze reported that PICC P&C issued its first new energy auto insurance policy in Hong Kong in early 2025 and has since insured over 1,000 Chinese-brand new energy vehicles in the region, with a current loss ratio of around 50%. In June, the company expanded to Thailand, marking a key step in its global strategy. With Chinese new energy vehicle exports growing robustly, PICC aims to leverage its experience in Hong Kong and Thailand to explore markets in Southeast Asia, Europe, and South America. Overseas auto insurance is poised to become a significant growth driver for PICC P&C. Life and Health Insurance: Accelerated Value Growth PICC’s life and health insurance segments also delivered strong results. PICC Life reported original premium income of RMB 905.13 billion, up 14.5% year-on-year, with new business value surging 71.7% to RMB 49.78 billion. The bancassurance channel was particularly successful, with new business value jumping 107.7% to RMB 29.24 billion. Strategies for Sustained Growth PICC Vice President Xiao Jianyong (肖建友) credited this growth to optimized business structures, reduced costs, and lower product premium rates under the ‘报行合一’ framework. PICC Life collaborates with nearly 90 banks and plans to innovate further in bancassurance products. PICC Health also achieved record results, with premium income exceeding RMB 400 billion for the first time in a half-year period, reaching RMB 407 billion, a 12.2% increase. Net profit grew by 49.6% to RMB 51 billion, and new business value rose by 51.0% to RMB 38.37 billion. Xiao emphasized that health insurance will continue to expand its market reach. Conclusion: A Blueprint for Sustainable Growth PICC’s strategic focus on steadily increasing its A-share investment asset scale and proportion has proven highly effective, driving both financial performance and market confidence. By leveraging China’s economic growth, enhancing operational efficiency, and exploring new opportunities domestically and internationally, PICC is well-positioned for continued success. Investors and industry observers should monitor the company’s execution of its investment and expansion plans, as these initiatives are likely to yield significant returns in the coming years. For those interested in the evolving landscape of China’s insurance and financial markets, PICC offers a compelling case study in strategic agility and growth.
PICC’s Strategic Surge: How China’s Insurance Giant is Boosting A-Share Investments and Driving Growth
