ROE reached 21.4% in H1 2026 as stronger investment returns boosted profitability.
China Life Insurance is expected to maintain strong earnings as its large distribution network and diversified business continue to support new business growth, although high exposure to equities will keep pressure on its capital position.
Fitch Ratings expects China Life’s profitability to remain strong, supported by its market position and regulatory measures to control expenses across its agency and bancassurance channels.
New business value (NBV) rose 33.7% year on year to $5.70b (CNY38.2b) in the first half of 2026.
Return on equity increased to 21.4% in the first half of the year (H1 2026), from an average of 20.2% between 2023 and 2025, mainly due to stronger investment returns amidst favourable capital-market conditions.
Fitch expects the insurer’s broad distribution platform and diversified business profile to continue supporting value growth.
However, higher equity exposure is likely to make earnings more sensitive to movements in equity markets.
Fitch expects capitalisation to remain a weakness despite some easing in capital pressure from stronger earnings.
Its core and comprehensive solvency ratios were 157% and 198%, respectively, at end-H1 2026, well above the regulatory minimums of 50% and 100%.
China Life’s exposure to domestic equities has increased partly in response to policies encouraging insurers to provide long-term capital to equity markets, whilst also seeking higher returns in a low-interest-rate environment and supporting returns on participating products.
The insurer also has concentration risk through its 43.7% stake in China Guangfa Bank, equivalent to 17.4% of total equity at end-H1 2026.
Fitch said China Life’s dominant position in China, extensive distribution network, strong agency force and brand recognition give it a competitive position that is difficult for peers to replicate.
The agency expects these strengths to continue supporting earnings.
($1.00 = CNY6.70)