PICC profit rises 26% but growth set to ease

Net income is forecast to reach about HK$39.4b in 2026 from HK$36.0b in 2025.

PICC Property and Casualty is expected to see slower margin gains in the coming years, as management signals limited improvement in underwriting performance despite steady premium growth, according to a research note by Morningstar.

According to Morningstar, the company’s 2025 net profit rose 26%, but growth momentum is already easing.

Looking ahead, management is guiding for a flat combined ratio in 2026, pointing to limited upside in underwriting margins.

Morningstar said this cautious outlook suggests profitability may have reached a near-term peak, especially as competition increases and pricing remains under pressure in some segments.

Premium growth is expected to stay stable but moderate. Net earned premiums are forecast to grow around 5.9% in 2026 to about $70.9b (HK$545.3b), broadly in line with GDP growth.

Over the longer term, growth is likely to remain in the mid-single-digit range as the company balances expansion with market competition.

New energy vehicle (NEV) insurance and personal non-auto lines are expected to remain key growth drivers.

NEV premiums already rose 32% and account for 22% of total auto premiums, with PICC holding more than 35% market share in this segment.

However, rising competition could limit margin expansion even as volumes grow.

For non-auto business, the outlook remains more uncertain. Morningstar expects only modest improvement, with the combined ratio forecast at around 100% for 2026 to 2028.

Pricing pressure in government-related lines such as agricultural insurance, along with local fiscal constraints, is expected to continue weighing on profitability, although recent regulatory controls on expenses may provide some support.

Earnings are still projected to grow, but at a more measured pace. Net income is expected to reach about $5.1b (HK$39.4b) in 2026, up from $4.7b (HK$36.0b) in 2025, whilst earnings per share could rise to 1.80 from 1.62.

($1.00 = HK$7.84)