Analysis Report on the Growth Rate Divergence Between China Pacific's Life Insurance and Property & Casualty Insurance Businesses

Based on the collected data, I will provide you with a systematic and comprehensive analysis report.

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According to the 2025 annual performance data, China Pacific shows a clear trend of business divergence [0][1]:

Business Segment	Premium Income (CND 100 million)	Year-on-Year Growth Rate	Growth Rate of Insurance Service Income
Life Insurance Business	2,581.15	+8.1%	+2.6%
Property & Casualty Insurance Business	2,035.61	+0.2%	+3.5%

The growth rate gap is as high as

, with the life insurance business growing significantly faster than the P&C insurance business.

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Pacific Life Insurance launched the “Long Voyage Initiative” transformation strategy in 2021. After years of deepened promotion, the transformation dividends are being accelerated [1][2]:

• Strong Growth of New Business Value
  : In the first three quarters of 2025, the new business value reached CND 15.351 billion, with a year-on-year growth of 7.7%, and
  31.2% year-on-year growth on a comparable basis
  [1]
• Significant Improvement in New Business Value Margin
  : In 2024, the new business value margin reached 16.8%, up 3.5 percentage points year-on-year; it increased by 8.6 percentage points year-on-year before adjusting economic assumptions [2]
• Steady Growth of Embedded Value
  : By the end of 2024, the embedded value reached CND 421.837 billion, representing a 4.9% growth from the end of the previous year [2]

The bancassurance channel has become the core engine for life insurance growth [1]:

Indicator	First Three Quarters of 2025 (CND 100 million)	Year-on-Year Growth Rate
Total Premium of Bancassurance Channel	583.10	+63.3%
New Single Premiums with Installment Payment in Bancassurance Channel	159.91	+43.6%

The reasons for the high growth of the bancassurance channel include:

• Deepened innovation in cooperation models with banking channels
• Captured the wealth management and pension health insurance needs of bank customers
• Continuously optimized product and service supply, and strengthened customer management

Pacific Life Insurance proactively adjusted its product strategy to increase the proportion of high-value businesses [1][2]:

• Significant Increase in the Proportion of Participating Insurance
  : The proportion of participating insurance in new single installment premiums of the agent channel reached 58.6%, a significant year-on-year increase
• Upward Shift to Middle and High-End Customer Segments
  : The proportion of middle and high-end customers and above increased by 4.8 percentage points year-on-year
• Deep Integration of Products and Services
  : Deeply integrated insurance products with the health care service ecosystem

The agent channel achieved “stable scale and improved quality” [1]:

Indicator	Value	Change
Monthly Average Insurance Agents	181,000	Basically flat year-on-year
Monthly Average First-Year Total Premium per Core Employee	CND 71,000	+16.6%
13-Month Policy Persistency Rate	96.6%	Increased by 2.8 percentage points year-on-year

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The growth rate of China’s auto market sales has slowed down. In 2024, the cumulative retail sales of narrow-passenger vehicles in the domestic market reached 22.89 million units, with a year-on-year growth of 5.49% [3]. As the largest business segment of P&C insurance, the growth rate of auto insurance is basically flat. In the first three quarters of 2025, the original insurance premium income of Pacific P&C Insurance reached CND 160.206 billion, with

[1].

The continuous tightening of regulatory policies has a direct impact on the P&C insurance business [4][5]:

• In September 2025, the State Administration of Financial Regulation issued the “Notice on Strengthening the Supervision of Non-Auto Insurance Business (Draft for Comment)”, expanding the “Premium Rate & Expense Compliance” requirement from the auto insurance sector to the non-auto insurance sector [4]
• The “Notice” requires insurance companies to strictly implement the registered insurance clauses and rates, and shall not set high fees that are inconsistent with the services provided
• The reduction of expense ratio restricts the growth of premium scale in the short term

The P&C insurance business is facing multiple cost pressures [3][5]:

• Higher Loss Ratio of New Energy Vehicle Insurance
  : The claim rate and compensation cost of new energy vehicles are higher than those of traditional fuel vehicles
• Impact of Natural Disasters
  : Frequent natural disasters such as heavy rainfall in southern China in 2024 led to an increase in claim payments
• Pressure on Combined Ratio
  : The combined ratio of Pacific P&C Insurance in 2024 was 98.6%, up 0.9 percentage points year-on-year

Competition in the non-auto insurance sector is becoming increasingly fierce [4]:

• Small and medium-sized insurance companies seize market share through price wars
• Irrational competition through high handling fees, long account periods, etc. has emerged in some sectors
• Although leading insurance companies have stable market shares, their growth space is limited

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Value Indicator	2024 Performance	Investment Implication
New Business Value	CND 13.258 billion, +20.9%	Foundation for future profit growth
New Business Value Margin	16.8%, +3.5pct	Continuous improvement in business quality
Embedded Value	CND 421.837 billion, +4.9%	Core valuation indicator for life insurance companies
Net Profit	CND 35.821 billion, +83.4%	Significant improvement in profitability [2]

: The high-quality growth of the life insurance business will continuously enhance the company’s embedded value and new business value, creating value for long-term investors.

Although the growth of the P&C insurance business has slowed down, its operating quality remains stable [1][5]:

• Improvement in Underwriting Profit
  : In the first half of 2025, the underwriting profit reached CND 35.5 million, with a year-on-year growth of 30.9%
• Optimization of Combined Ratio
  : In the first quarter of 2025, the combined ratio was 97.4%, down 0.6 percentage points year-on-year
• Stable Leading Position
  : Pacific P&C Insurance firmly ranks among the top three in the industry, with a stable market share

: The P&C insurance business provides stable profits and cash flow, but it is difficult to contribute significant growth elasticity.

Current Valuation Level [0]:

Indicator	Value	Industry Comparison
Price-to-Earnings Ratio (P/E)	8.10x	At a historical low
Price-to-Book Ratio (P/B)	1.49x	Below the industry average
Return on Equity (ROE)	18.68%	Better than the industry average

: Pacific’s current valuation provides a margin of safety, and there is a valuation repair opportunity against the backdrop of the continuous manifestation of the results of the life insurance transformation.

• Interest Rate Risk
  : A continuous decline in long-term interest rates may affect investment income and reserve accrual
• Transformation Progress
  : The progress of the “Long Voyage” transformation may fall short of expectations
• Policy Risk
  : Regulatory policies such as “Premium Rate & Expense Compliance” continue to tighten
• Market Competition
  : Competition in the life insurance and P&C insurance markets continues to intensify

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1. Continuous Release of Transformation Dividends from Life Insurance Business
   : The growth of new business value is accelerating, the product structure and customer structure are continuously optimized, and the bancassurance channel has strong growth momentum
2. P&C Insurance Business Provides Stable Support
   : Although growth has slowed down, underwriting profit has improved, the combined ratio (COR) has been optimized, providing a stable profit foundation
3. Valuation at Historical Low
   : P/E ratio is only 8.1x, P/B ratio is only 1.49x, providing a high margin of safety
4. Recovery of Capital Market
   : In the first three quarters of 2025, total investment income increased, and net profit grew by 19.3% year-on-year [1]

Assessment Dimension	Rating	Explanation
Growth	★★★☆☆	The high growth of life insurance offsets the slowdown of P&C insurance, maintaining steady overall growth
Profitability	★★★★☆	ROE reaches 18.68%, with a substantial growth in net profit
Valuation Attractiveness	★★★★☆	Valuation is at a historical low with sufficient margin of safety
Business Quality	★★★★☆	New business value margin continues to improve, product structure is optimized
Risk Level	★★★☆☆	Need to pay attention to interest rate risk and transformation progress

: Against the backdrop of the manifested results of life insurance transformation and the stable P&C insurance business, China Pacific has good investment value. The short-term growth rate divergence does not change the long-term investment logic. It is recommended to pay attention to the progress of the company’s “Long Voyage” transformation and the performance of new business value.

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[0] Jinling API - China Pacific Company Profile and Market Data (601601.SS)

[1] Wall Street CN - “China Pacific’s Net Profit Surges 19.3% in the First Three Quarters, with Significant Results from Life Insurance Transformation” (https://wallstreetcn.com/articles/3758356)

[2] China Pacific 2024 Annual Report - Analysis of the Results of “Long Voyage” Transformation and Business Value (https://www.cpic.com.cn/upload/resources/file/2025/03/26/85911.pdf)

[3] Lianhe Ratings - “2025 Property & Casualty Insurance Industry Analysis” (https://www.lhratings.com/file/fda56e6231f.pdf)

[4] Securities Times - “Non-Auto Insurance ‘Premium Rate & Expense Compliance’ Reshapes Half of the P&C Insurance Market” (https://www.stcn.com/article/detail/3588725.html)

[5] Guosen Securities - “Commentary on Non-Auto Insurance ‘Premium Rate & Expense Compliance’: Reshaping the Non-Auto Insurance Ecosystem, Benefiting Underwriting Profit Improvement” (https://pdf.dfcfw.com/pdf/H3_AP202507091705738674_1.pdf)