Life Insurance Industry 2026 Business Outlook: Left Hand "Deposit Relocation," Right Hand "A-Share Slow Bull"

1. 2025 Life Insurance Industry Review: Beta and Alpha Resonance

1. Sector Performance and Index Fitting: Excess Returns Under Strong Beta Characteristics

In 2025, the Wind Insurance Index and Hong Kong Insurance Index increased by 31% and 57%, respectively, both significantly outperforming the CSI 300 and Hang Seng Index, confirming the market characteristic of the life insurance sector as an “equity beta” asset class.

2. Sources of Excess Returns:

① Asset Side (Core Driver):

• Equity Market Recovery: In the second half of 2025, especially since the third quarter, the recovery of the equity market was the key factor driving the sector’s rise. As one of the largest institutional investors in the market, insurance funds’ equity holdings (stocks + funds) reached approximately 15.5% at the end of Q3 2025, a historical high. This high allocation made insurers’ profits highly sensitive to secondary market fluctuations, with stock market gains directly boosting fair value change gains and losses (FVTPL), thereby increasing net profit for the period.

……