China Life faces earnings drag as investment returns weaken

The insurer posted a fourth-quarter loss of $1.9b despite annual gains.

China Life Insurance is expected to post steady business growth, but earnings may stay uneven as investment returns soften.

The insurer’s 2025 net income rose 44% year-on-year to $21.6b (RMB154.1b), but growth slowed because of weak investment returns and impairment charges, which led to a $1.9b (RMB13.7b) fourth-quarter loss.

Even so, core business trends stayed firm, with new business value rising 36% in 2025.

Morningstar expects this momentum to continue into 2026. It forecasts more than 25% new business value growth in the first half, supported by product mix changes, lower pricing, and a low base.

Net earned premiums are also expected to grow 5% in both 2026 and 2027, reaching $33.1b (RMB236.1b) by 2027.

The main risk is investment income. China Life is more exposed than peers to equity market swings, and Morningstar expects investment yield to ease from 6.1% to around 5.0%, though that would still be above its 4.0% long-term assumption.

Net income is forecast to fall to $19.2b (RMB137.2b) in 2026 before recovering to $20.5b (RMB146.5b) in 2027.

($1.00 = RMB6.91)