CITIC Construction Investment: The main investment line in the insurance sector shifts to medium- to long-term valuations, repairs, and highlights the value of high dividend allocations

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that looking back at the 26H1 performance of the insurance sector, debt-side life insurance NBV and financial insurance underwriting profits have maintained steady growth, and the improvement in the asset-side equity market has led to a general improvement in the return on total investment. Looking ahead, the main investment line in the insurance sector is expected to gradually switch to investment opportunities based on medium- to long-term value valuation repair and high dividend allocation. Strong demand for residents' savings insurance+favorable industry “anti-domestic” policies + channel side efforts to expand incremental+dividend insurance resonate, and the long-term positive trend on the life insurance debt side is clear; the “integration of reporting” and comprehensive management of non-auto insurance directly hit the pain points of the industry's aggressive expansion model, which is expected to drive financial insurance cost rate optimization, and the industry's Matthew effect is expected to be further strengthened. Currently, sector valuation still has a high margin of safety, and long-term allocation value is remarkable.

CITIC Construction Investment's main views are as follows:

Looking back at the 26H1 performance of the insurance sector, on the debt side, life insurance NBV maintained steady growth. The average arithmetic NBV growth rate of the 7 listed insurers was +13.7%. Among them, the agent channel was the main driver, and the 7 listed insurers' agent channel arithmetic average NBV growth rate was +20.3%. Financial insurance underwriting profit also increased steadily. The total underwriting profit of the five listed insurers was +15.3% year over year. Auto insurance is still the main driver, mainly due to listed insurers actively promoting refined cost management and strict cost control in the context of deepening “integrated reporting and banking” reforms to drive cost rate improvements. On the asset side, driven by the improvement in the equity market, the arithmetic average annual return on total investment of the seven listed insurers was +1.3 pct to 5.5% year-on-year, and the arithmetic average growth rate of net profit to mother was +70.9%. The share allocation ratio of listed insurers increased year-on-year and was basically stable compared to the end of the previous year. Among them, the allocation ratios for OCI shares and TPL shares were +1.6 pct and +1.5 pct to 5.5% and 6.8%, respectively, compared with +0.5 pct and -0.2 pct at the end of the previous year.

Looking ahead, we believe that the main investment line in the insurance sector is expected to gradually switch to investment opportunities based on medium- to long-term value valuation repair and high dividend allocation. Looking ahead to the third quarter, the growth rate on both sides of the capital market faced some month-on-month weakening pressure under the higher base for the same period last year. The main upward momentum in subsequent stock prices is expected to gradually switch to valuation restoration based on medium- to long-term value and high dividend allocation requirements. On the debt side, the strong demand for residents' savings insurance+favorable industry “anti-domestic” policies + the channel side resonates with the quadruple benefits of incremental and dividend insurance transformation, and the long-term positive trend on the life insurance debt side is clear; the “integration of reporting” and comprehensive management of non-auto insurance directly hit the pain points of the industry's aggressive expansion model, which is expected to drive financial insurance cost rate optimization, and the industry's Matthew effect is expected to be further strengthened. On the asset side, listed insurers have taken multiple measures to optimize asset allocation to provide strong support for the long-term return on investment. Combined with the transformation of debt-side dividend insurance and the increase in the share of insurance policies with lower scheduled interest rates, drive the optimization of rigid debt costs, and consolidate long-term interest spreads. In terms of valuation, as of 8/31, the A-share PEV of mainland listed insurers was 0.47x-0.70x, and the H-share PEV was 0.28x-0.56x. Seven listed insurers had announced the payment of interim dividends. The average growth rate for interim dividends was +24.7%, and the dividend ratio for some targets was above 4%, which is a high overall margin of safety. Overall, the insurance sector's medium- to long-term allocation value is outstanding in its current position. If the potential pressure of the third-quarter performance growth rate under a high base causes short-term disturbances to stock prices, it is recommended to seize the opportunity to fall.

1. Steady growth on the debt side, and agent channels are the main driver of NBV growth

In the first half of 2026, the NBV of the seven listed insurers achieved steady growth as a whole. The arithmetic average NBV growth rate was +13.7%. The driving factors were differentiated. Ping An, Taiping, and Sunshine were mainly driven by new premium growth, while China Life Insurance, Taibao, Xinhua, and People's Insurance were mainly driven by improved value ratios. Overall, the 7 listed insurers' new premium calculation average growth rate was +13.5%. Among them, Sunshine performed well, reaching +63.5%; the average NBVM for the first half of the year was +1.4pct to 18.5% year-on-year. The performance of China Life Insurance, Sunshine, and Human Insurance was particularly outstanding. NBVM was +3.5pct, +2.8pct, +2.2pct to 21.2%, 15.0%, and 14.4%, respectively.

By channel, NBV growth is mainly driven by agent channels. The average arithmetic NBV growth rate of the agent channels of the seven listed insurers in the first half of 2026 was +20.3%. China Life Insurance performed well. The NBV of the agent channel was +37.5% compared to the same period last year. With the exception of China Life Insurance and Human Life Insurance, which is mainly driven by improvements in value ratios, the NBV growth in agent channels of other listed insurers is mainly driven by new policy premium growth. The average growth rate of the seven listed insurance companies' agent channels for new premiums in the first half of 2026 was +23.9%. Among them, Sunshine and Taibao performed well. The growth rates of new orders from their agent channels reached +67.6% and 28.4% respectively in the first half of the year.

The arithmetic average of the agent channels of the seven listed insurers was -2.1pct to 25.7% year-on-year. China Life Insurance and Life Insurance performed well. In the first half of 2026, the agent channel NBVM was +5.9pct and +2.6pct, respectively, to 38.8% and 23.1% year-on-year.

If split according to team size and per capita production capacity, per capita production capacity is the main driver affecting changes in premiums and NBV for new agent channels. From the perspective of per capita new policy premiums, the average year-on-year growth rate of the five listed insurance companies (excluding Human Insurance and Sunshine) agent channels was +27.3% year-on-year in the first half of the year. Among them, Taiping and Taibao performed brilliantly, +43.1% and +29.8%, respectively. From the perspective of NBV per capita, the average NBV per capita growth rate of the agent channels of the five listed insurance companies (excluding Human Insurance and Sunshine) was +29.4% year-on-year in the first half of the year. Among them, Taiping and China Life Insurance performed well. The NBV per capita in the first half of the year was +49.7% and +38.7%, respectively. The increase in per capita production capacity in the first half of the year was mainly due to the lower base of the “integration of reporting and banking” implementation during the same period last year, strong demand for residents' savings insurance, and the release of the results of early channel reforms.

The overall size of the agency team continues to decline, but China Life Insurance has both increased year on year and month on month. On a year-on-year basis, the five listed insurers (excluding Human Insurance and Sunshine) had an average year-on-year growth rate of -5.8%; compared to the end of the previous year, the five listed insurers (excluding Human Insurance and Sunshine) agent channel size arithmetic average growth rate was -0.9%.

2. Documents No. 65 further strengthened the “integration of reporting and banking”, showing the differentiation of banking insurance channels

In the first half of 2026, the average arithmetic NBV growth rate of the six listed insurers (excluding China Life Insurance) banking insurance channels was +3.8%. The performance of each company was divided. The NBV of the Taibao Banking Insurance channel declined year on year, while other companies increased year on year. Among them, the NBV growth in the Ping An and Sunshine Banking Insurance channels was mainly driven by new premiums, while the NBV growth in the Xinhua and People Insurance banking insurance channels was mainly driven by improvements in NBVM. The decline in NBV of Taibao Banking Insurance was mainly affected by the reduction in premiums for new policies. The average premium growth rate of the banking insurance channels of the seven listed insurers was 16.4%. Among them, Sunshine and Ping An performed particularly well. The growth rates of new bank insurance policies reached +83.4% and +74.4% respectively.

The banking insurance channel NBVM changes and differentiates greatly. The banking insurance channel arithmetic average of the six listed insurers (excluding China Life Insurance) was -1.9pct to 14.9% year on year, but China Insurance, Xinhua, and Taibao performed well. NBVM of the banking insurance channel was +2.3pct, +3.7pct, and +2.5pct, respectively, to 10.4%, 16.7%, and 15.0%, mainly due to the increase in the share of new futures contracts.

The share of the banking insurance channel's contribution to the new premiums and NBV of listed insurers declined slightly. The banking insurance channel arithmetic average of the 7 listed insurers accounted for -1.1 pct to 43.1% year on year, and the average arithmetic NBV of the 6 listed insurers (excluding China Life Insurance) banking insurance channel accounted for -2.3 pct to 38.6% year over year.

Recently, regulatory policies such as Document No. 65 have further promoted the implementation of “integration of reporting and banking” in banking insurance channels. Combined with the higher base for the same period last year, the short-term banking insurance channel's new order growth rate may fluctuate to some extent, but it will help NBVM to optimize, and the market share of leading insurers is expected to further increase. Earlier, the supervisory authorities issued the “Notice on Matters Relating to Further Strengthening Bank Agent Channel Fee Management” (Document No. 65 for short) and officially implemented it on July 1 this year. Document No. 65 further refines the reporting requirements for banking insurance commissioners, such as remuneration incentives, training, and customer service fees, requires insurance companies to incorporate “integrated reporting” compliance management into the company's assessment and accountability mechanism, and will establish an industry notification mechanism for “integrated reporting” violations and typical cases. The purpose of these requirements is to regulate “small account” issues arising from the implementation of “integrated reporting and banking” by banking insurance channels, promote strict implementation of “integrated reporting and banking” through more detailed policy requirements, and promote the development of healthy banking insurance business standards. Looking at the short term, the channel cooperation and adjustment carried out by the banking insurance parties in line with the requirements of the new regulations may have a certain impact on the sales pace in the short term. Combined with the fact that the third quarter of last year was affected by the adjustment of scheduled interest rates, the growth rate of new orders in the banking insurance channel may face certain fluctuations in the short term. However, on the one hand, this policy helps to optimize fee spreads in banking insurance channels and is expected to help improve NBVM in banking insurance channels. On the other hand, it also helps leading insurers to further increase their market share.

3. The share of new dividend insurance orders has increased, and NBV's sensitivity to return on investment assumptions has generally declined

Listed insurers are actively developing floating income products such as dividend insurance, and the premium scale of new dividend insurance policies has grown rapidly, and their share has increased significantly. The share of China Life's floating income business has further increased; first-year premiums for Ping An Life Insurance dividend insurance products account for more than 90% of total first-year premiums (excluding universal insurance). In the first half of 2026, Taibao's dividend insurance premiums amounted to 65.687 billion yuan, an increase of 76.1% over the previous year; the share of dividend insurance in the new insurance business increased to 55.5%. Xinhua achieved premiums of 34.502 billion yuan for new dividend insurance policies, +645.7% year-on-year, and the share of new orders was +73.0pct to 83.9% year-on-year. Taiping Life's dividend insurance accounts for 87.1% of the premiums paid in the first year of long-term insurance. The total premium of Sunshine Dividend Insurance was +272.3% year-on-year to 24.928 billion yuan.

In the context of the new asset liability management regulations, it is difficult to achieve asset liability matching through asset-side efforts alone. Both sides of the asset side need to work together and promote dividend insurance transformation on the debt side to better match net investment income with rigid debt costs. On August 21, 2026, the State Financial Supervisory Administration issued the “Measures for the Management of Assets and Liabilities of Insurance Companies” (hereinafter referred to as the New Asset Management Regulations) and the “Notice Concerning the Implementation of the 'Measures for the Management of Assets and Liabilities of Insurance Companies'”. The new asset management regulations require personal insurance companies to meet the requirement that the net return on investment coverage should not be less than 100%. The downward trend in net return on investment on the asset side is expected to continue in the short term in a low interest rate environment. At this time, it is more difficult to meet the net investment return coverage requirements through asset-side efforts alone. Compared to traditional insurance, dividend insurance has a lower rigid debt cost. Life insurance companies need to work together on the debt side to drive the optimization of rigid debt costs through vigorous development of floating income products such as dividend insurance on the debt side, so as to better achieve asset balance in a low interest rate environment and consolidate the foundation for long-term steady development.

4. The marginal balance of contract services and the new CSM business have both achieved growth, and future profits are supported

The overall CSM balance of listed insurers continued to grow at the end of the first half of 2026. The average year-on-year growth rate of the CSM balance of the seven listed insurers was +7.1%, compared with the arithmetic average growth rate of +5.5% at the end of the previous year. The increase in the CSM balance provides a solid foundation for future profits. The six listed insurers (excluding Sunshine) had an average arithmetic growth rate of +32.8% for their new business in the first half of 2026. China Life Insurance performed particularly well. The CSM for the new business was +157.4% year-on-year in the first half of the year.

5. Financial insurance underwriting profits are growing steadily, and car insurance cost rates are expected to continue to be optimized

The comprehensive cost ratio of the financial insurance business of most listed insurers generally improved in the first half of 2026, which led to an increase in underwriting profits. Of the five listed insurers, with the exception of Taiping, the comprehensive cost ratio declined. Among them, Taibao's overall improvement was significant, with a comprehensive cost ratio of -1.3 pct to 95% year-on-year. The comprehensive cost ratio of People's Insurance in the first half of 2026 was 0.8 pct to 94.0%, maintaining its leading edge. The total underwritten profit of the five listed insurers for the first half of 2026 was +15.3% year-on-year to 29.24 billion yuan.

Looking at further breakdowns, there are differences in the drivers of overall cost rate improvements. People's insurance is mainly driven by cost rates, while Ping An, Taibao, and Sunshine are mainly driven by payout rates. The arithmetic average cost ratio of the five listed insurers for the first half of 2026 was +0.1pct to 26.8% year over year, with human insurance -0.9 pct to 22.1% year over year. The arithmetic average payout rate of the five listed insurers in the first half of 2026 was 0.2 pct to 69.4% year on year. The performance of each company varied greatly. Among them, Ping An, Taibao, and Sunshine declined year on year, while Human Insurance and Taiping increased year on year.

By type of insurance, car insurance is an important driving factor for the increase in underwriting profits. The four listed insurers (excluding Taiping) had an average auto insurance underwriting profit arithmetic growth rate of +18.7% in the first half of 2026. It is estimated that due mainly to the deepening of the “integrated reporting” reform of auto insurance, listed insurers actively promote detailed cost management and strict cost control to drive comprehensive cost rate improvements. The 4 listed insurers (excluding Taiping) have an average comprehensive cost ratio of -0.6 pct to 95.1% year-on-year in the first half of 2026. Among them, the comprehensive car insurance cost ratio for the first half of 2026 is -2.2 pct to 93.5% year on year. The four listed insurers (excluding Taiping) had an arithmetic average growth rate of +1.1% in the first half of 2026. With the exception of Sunshine, car insurance service revenue all increased year-on-year.

The performance of the four listed insurers (excluding Taiping) in the first half of 2026 was highly differentiated. Ping An and Sunshine underwriting profits declined, and Taibao and People's Insurance underwriting profits increased. The total underwriting profit of the four listed insurers (excluding Taiping) was +17.82% year-on-year to 9.8 billion yuan.

Split by type of insurance, there are differences in the influencing factors behind changes in non-auto insurance underwriting profits among listed insurers. 1) Human Insurance's non-auto insurance underwriting profit +27.3% to 5.459 billion yuan, mainly driven by Yijian Insurance's underwriting profit turning loss into profit. The company's eHealth Insurance business focuses on underwriting control, expense control and claims management, continuously improving business quality and continuously improving the business structure. The comprehensive cost ratio is 2.8 pct to 99.0% year on year. In addition, the company continues to promote underwriting portfolio management, strengthen the management and control of high-risk businesses, improve specialized operation capabilities, upgrade risk reduction service levels, improve overseas insurance service network construction, strengthen differentiated allocation of resources, and improve cost investment efficiency. The comprehensive cost ratio of non-car insurance other than agricultural insurance, health insurance, liability insurance and corporate financial insurance was 7.4pct to 81.2% year-on-year, and underwriting profit was +50.5% to 2,885 billion yuan. 2) Ping An's non-auto insurance underwriting profit -14.2% to 2.5 billion yuan, mainly affected by health insurance. Yijian Insurance's underwriting profit in the first half of the year was -31.26% to 673 million yuan, with a comprehensive cost ratio of 96.7%, up 3.1 percentage points from the previous year; 3) Taibao's non-auto insurance underwriting profit was +74.1% to 1,807 billion yuan, mainly driven by agricultural insurance. Affected by the optimization of commercial insurance structures in some regions, the company's agricultural insurance premium income in the first half of 2026 was 14.064 billion yuan, -1.6% year over year; the comprehensive underwriting cost ratio was 96.2%, -2.6 pct year on year. 4) Sunshine's non-auto insurance underwriting profit changed from profit to loss, mainly affected by health insurance. Affected by the phased increase in the cost of the policy health insurance business, the comprehensive cost rate of iHealth Insurance coverage in the first half of the year was +4.5 pct compared to the same period last year to 102.2%.

On August 21, 2026, the State Financial Supervisory Administration issued the “Action Plan for the Comprehensive Management of Non-Vehicle Insurance” (hereinafter referred to as the “Plan”). The Plan consists of six parts. The first is the general requirements. Focus on outstanding issues and risks in the field of non-car insurance, carry out source management, in-depth management and system governance, adhere to the principles of problem orientation, classification policies, first break, and steady progress, continuously improve the management system system, effectively enhance the operating capacity of market players, accelerate the construction of a good industry ecology, and further consolidate the foundation for high-quality development of non-car insurance business. The second is to strengthen product source management. Establish regulatory guidance, corporate responsibility, and industry-supporting product management systems to promote market standards through product source standardization. The third is to promote the steady operation of the business. Focus on the main areas where non-car insurance risks are exposed, strengthen behavioral supervision of market players, and promote non-car insurance compliant management and orderly competition. Fourth, consolidate system data support. Promote the unification of data standards, system platform construction, and data accumulation and application to provide strong support for scientific management and accurate supervision. The fifth is to regulate intermediary business practices. Strengthen the control of key aspects such as insurance intermediaries, insurance business on internet platforms, and management responsibilities of insurance companies. The sixth is to strengthen governance guarantee measures. Clarify the responsibilities of all parties involved in supervision, institutions, and industry organizations; form an implementation mechanism with vertical linkage and horizontal collaboration; deepen departmental collaboration, strengthen summary and publicity; establish evaluation and feedback mechanisms to improve policies and measures in a timely manner according to market changes and implementation effects. The “Plan” will help push the insurance industry to continuously improve the level of refined management and accelerate the completion of transformation and upgrading to improve quality and efficiency; it is expected to further optimize the cost rate and comprehensive cost ratio of listed insurers for non-auto insurance business, thereby driving the growth of underwriting profits.

6. The improvement in the equity market drives improvements in investment performance, and OCI stock expansion continues

In the first half of 2026, the overall performance of the stock market continued its upward trend, with significant structural differentiation. The Shanghai and Shenzhen 300 Index accumulated +7.55% (25H1: +0.03%), and the Hang Seng Index accumulated -10.73% (25H1: +20.00%). In the fixed income sector, interest rates in the bond market fluctuated in a narrow range at low levels, and term spreads rose at the center. The cumulative yield on 10-year treasury bonds was -11.43BP to 1.7330%.

Driven by the positive equity market, the arithmetic average annualized total return on investment in the first half of 2026 of the seven listed insurers was +1.3 pct to 5.5% year on year. Among them, Taiping and China Life Insurance improved significantly, +2.5 pct and +2.3 pct to 5.2% and 5.6%, respectively. Overall, the arithmetic average growth rate of the total investment income of the seven listed insurers in the first half of 2026 was +61.8%.

The net return on investment continues to trend downward. The arithmetic average annualized net return on investment for the first half of 2026 of the seven listed insurers was -0.5pct to 2.8% year-on-year; the arithmetic average growth rate of the net investment income of the seven listed insurers in the first half of 2026 was -1.4%.

Comprehensive investment income performance in the first half of 2026 was highly differentiated, mainly due to differences in calculation caliber. Taiping's annualized comprehensive investment return in the first half of the year was +1.12pct to 2.98% year over year. The performance was impressive, mainly due to the fair value change of +14.708 billion HK$14.708 billion in FVOCI debt securities in the first half of the year, or +144.5% over the same period last year. Changes in the fair value of FVOCI debt securities were excluded from the comprehensive investment income of Ping An, Taibao, and Sunshine. It is expected that due to weakening OCI stock prices, the comprehensive return on investment declined year-on-year.

In terms of allocation structure, the share allocation ratio of listed insurers increased year-on-year. Compared with the end of the previous year, it was basically stable, and the share of OCI shares increased. The arithmetic average share allocation ratio of the seven listed insurers at the end of the first half of 2026 was +3.2pct to 12.4% year-on-year, and +0.2pct compared to the end of the previous year. Looking at the internal composition, the overall share of OCI shares has further increased. The arithmetic average OCI stock allocation ratio of the seven listed insurers at the end of the first half of 2026 was +1.6pct to 5.5% year over year, +0.5pct compared to the end of the previous year, while the arithmetic average TPL stock allocation ratio was +1.5pct to 6.8% year over year, and -0.2pct compared to the end of the previous year.

On August 21, 2026, the State Financial Supervisory Administration issued the “Measures for the Management of Assets and Liabilities of Insurance Companies” (hereinafter referred to as the New Asset Management Regulations) and the “Notice Concerning the Implementation of the 'Measures for the Management of Assets and Liabilities of Insurance Companies'”. Under regulatory indicators such as net return on investment coverage, there is still room to increase the allocation ratio of insurance funds to high-dividend stocks. The new asset management regulations require that the net investment income of personal insurance companies in the past three years should cover the debt guarantee costs of the past three years. Against the backdrop of continuous low interest rates and scarcity of high-quality non-standard assets in recent years, the net return on investment of listed insurers continues to be under pressure. In particular, the interest income portion is under significant pressure. It is expected that the allocation ratio of insurance companies to high-dividend stocks will increase further. OCI stock accounts still have room for expansion. Furthermore, insurance capital's preference for asset management products that can generate more stable dividend income is expected to increase further.

Listed insurers' share of bond allocations declined slightly year-on-year, and was generally stable from the end of the previous year. The arithmetic average bond allocation ratio of the seven listed insurers at the end of the first half of 2026 was -1.1 pct to 57.3% year over year, +0.2 pct compared to the end of the previous year.

Looking ahead, in line with the recently issued new asset liability management regulations, there is still a demand for insurance capital to prolong the life of assets and control the long-term gap, but it is expected that the pace of implementation will be more flexible to better balance term matching and income matching. In 2024 and before 2024, the life insurance industry as a whole sold more long-term savings insurance products. As a result, the long-term debt period increased rapidly, and although the long-term asset life of the industry increased in the context of insufficient supply of long-term high-quality fixed income assets, the overall growth rate was slower than that of long-term debt. As a result, the overall long-term gap is still under pressure to expand. According to a report by the Bank of China Insurance News Network, in 2022 to 2024, the average tenure of life insurance companies' liabilities increased from 13.26 years to 16.33 years, and the tenure gap widened from -6.75 to -9.15 years. Since 2025, the life insurance industry has vigorously promoted dividend insurance transformation, helping to ease the pressure of long-term matching, and the overall long-term gap of leading insurers is more manageable. On the one hand, it is expected that the current industry's overall long-term gap may still be a bit far from regulatory requirements. There is still demand for lengthening the long-term asset period and managing the long-term gap. Among them, leading insurers have worked together to control the long-term gap, and it is expected that the long-term gap can be controlled within the scope of regulatory requirements. The demand for long-term gap management by small and medium-sized insurers is expected to be even stronger. On the other hand, the minimum regulatory requirements for interest rate risk hedging for personal insurance companies under the scenario of a long period of time on the debt side will be lower than the previous draft for comments. The implementation period of the superimposed new asset management regulations will change from July 1, 2026 to January 1, 2027, as proposed in the previous draft for comments, and a three-year transition period will be allowed to provide insurance companies with a certain buffer period for strict implementation of policies. It is expected that the pressure on short-term insurance companies to match over a long period of time will ease marginally. Insurance companies can adopt a more flexible allocation strategy in terms of interest rates The relatively high point is expected to increase the allocation to better balance term matching and revenue matching.

Benefiting from improvements in investment service performance, the net profit of listed insurers all increased. In the first half of 2026, the seven listed insurers' net profit calculation average growth rate was +70.9%. China Life Insurance's growth rate was particularly impressive, +228.6% over the same period last year. The average pre-tax profit calculation rate of the seven listed insurers in the first half of 2026 was +80.4%.

7. Investment Suggestions

We believe that the main investment line in the insurance sector is expected to gradually switch to investment opportunities based on medium- to long-term value valuation repair and high dividend allocation. Looking ahead to the third quarter, the growth rate on both sides of the balance and liability side faced some month-on-month weakening pressure in the same period last year. The main upward momentum in subsequent stock prices is expected to shift from medium- to long-term value growth to valuation repair and high dividend allocation requirements based on medium- to long-term value.

Strong demand for residents' savings insurance+favorable “anti-domestic” policies in the industry+channel side to expand incremental+dividend insurance transformation resonates with the quadruple benefits of excellent quality, and the long-term positive trend on the life insurance debt side is clear. First, residents' demand for savings insurance will remain strong in the medium to long term. As one of the few financial products that can currently provide a “guaranteed and flexible” income model, the design of savings insurance products is well suited to the current characteristics of Chinese residents' investment preferences, and is expected to become an important vehicle for residents to enter the market and achieve long-term steady value-added. Second, a series of policies, such as “integration of reporting and banking” and new asset liability management regulations, help leading insurers increase their market share and stabilize profit margins. Third, in a context where the competitive environment in the industry is tending to be benign, leading insurers are making further active efforts to expand banking insurance channels and improve the quality and efficiency of agent teams to strengthen long-term growth momentum. Fourth, the dividend insurance transformation helps to optimize the cost of rigid debt and improve the stability of long-term performance. At the same time, the increase in its share helps reduce the sensitivity of EV investment, which in turn helps to repair valuation.

The “integration of reporting” of non-auto insurance and comprehensive management directly hit the pain points of the aggressive expansion model of the industry, which is expected to drive the optimization of financial insurance cost rates, and the Matthew effect in the industry is expected to be further strengthened. Compared with the previous policy, the “Action Plan for the Comprehensive Management of Non-Vehicle Insurance” issued on August 21, 2026 further strengthens product source management, requiring the re-filing of non-car insurance stock products by type of insurance, speeding up product clean-up and quality improvement, promoting market standards through product source standards; strengthening risk identification and control of key businesses, strictly controlling high-risk businesses, optimizing long-term serious loss businesses, and focusing on high-growth businesses; and further proposed exploring the establishment of an express handling fee insurance policy system based on earlier “integrated reporting” requirements. On the one hand, this helps drive further optimization of non-car insurance cost rates. On the other hand, it also means that the past model of non-car insurance that relied on high processing fees and aggressive bidding for scale will be difficult to sustain, while leading insurers are expected to further increase their market share with stronger brands, channels, data, risk pricing, service networks, and risk reduction capabilities.

On the asset side, listed insurers have taken multiple measures to optimize asset allocation to provide strong support for the long-term return on investment. Combined with the transformation of debt-side dividend insurance and the increase in the share of insurance policies with lower scheduled interest rates, drive the optimization of rigid debt costs, and consolidate long-term interest spreads. In terms of allocation strategies, fixed income asset allocation better balances term matching and income matching, and grasping relatively high interest rates to increase allocation efforts; on the one hand, equity asset allocation focuses on leveraging the role of high-dividend OCI stock bottom positions, and on the other hand, actively lays out new productivity areas to enhance long-term returns; alternative asset allocations actively promote ABS, REITs, and private equity. Among them, ABS and REITs are preferred to generate long-term stable cash flow to match long-term liabilities. Private equity investment grasps the double line of productivity growth and health promotion. Enlarge the layout.

Currently, sector valuations are in the lower historical quantile, and the margin of safety is sufficient. Seven listed insurers have announced the payment of interim dividends. The average growth rate for interim dividends is +24.7%, and the dividend rate for some targets is above 4%.

If the subsequent increase in macroeconomic policies exceeds expectations, it is expected to be a catalyst for sector valuation repair. On August 21, Mr. Liao Min, Vice Minister of Finance, stated at a press conference on the theme of the “Start the 15th Five-Year Plan” series held by the State Information Office that new policies and measures for fiscal and financial collaboration are continuing to be studied and formulated in the second half of this year in line with the needs of economic development. A number of new real estate policies were released centrally on August 28, helping to marginally mitigate potential depreciation concerns about the stock exposure of listed insurers.

Overall, the insurance sector's medium- to long-term allocation value is prominent in the current position. If the potential pressure of the third-quarter performance growth rate under a high base causes short-term disturbances to stock prices, it is recommended to seize the opportunity to take advantage of a low layout and be optimistic about valuation restoration based on medium- to long-term value and high dividend allocation investment opportunities.