China life premiums rise 1% as non-life sector grows 5% in 2025

Life insurers are moving towards participating products with lower guaranteed returns.

China’s life insurance sector recorded slower growth in the first four months of 2025, with premiums rising 1% year-on-year, according to Fitch Ratings. 

In contrast, non-life insurance premiums grew 5% during the same period, driven by government and regulatory support.

Life insurers are moving towards participating products with lower guaranteed returns to manage negative spread risks in the low-interest rate environment. 

This shift, however, has reduced the appeal of these offerings. Bancassurance growth slowed in 2024 following acquisition cost controls introduced in the third quarter of 2023.

Further pressure is expected from tightened agent commission rules implemented in the second half of 2024, which could dampen premium growth but support margin expansion.

On the non-life side, motor and select non-motor insurance products continue to benefit from policy support, although trade and tariff uncertainties could weigh on future growth.

Fitch expects financial performance volatility to remain higher amongst life insurers, given their increased allocation to equities in search of better yields, amidst low bond returns and regulatory incentives to raise equity holdings. 

Non-life insurers, meanwhile, are likely to maintain stable operating results, aided by underwriting discipline, pricing improvements, and cost controls.

The solvency positions of both segments are expected to remain stable, though insurers with higher investment risk exposure or expansion plans may continue to raise capital through debt issuance.