China Life Insurance outlook lifted as CGS raises forecasts

CGS International expects NBV margins to improve.

China Life Insurance is expected to deliver stronger results in the second half of 2025 as policy changes and market recovery support margins and investment income, CGS International said in an equity note.

The cut in guaranteed rates for life and participating insurance policies, effective from 1 September, is forecast to lift margins and new business value (NBV) growth. 

CGS International expects NBV margins to improve, helping offset earlier weakness in first year premiums.

A recovery in China’s A-share market is also anticipated to boost investment returns. 

Forecasts for investment yield between 2025 and 2027 have been raised, contributing to higher earnings per share (EPS) estimates. 

EPS growth is now projected at 2.4% to 5.1% over this period.

China Life’s NBV rose 20% year-on-year in the first half of 2025 on a like-for-like basis, supported by a 40% jump in margins. 

However, first year premiums fell 14%, with agency sales declining whilst bancassurance rose 44%, increasing its share of new business to 21%.

Looking ahead, CGS International sees NBV growth between 8.1% and 17.1% for 2025 to 2027, driven mainly by margin gains. 
The company is also expected to benefit from strong sales activity around the policy rate changes in the third quarter.