Chinese Insurance Sector Offers Long-Term Value After Strong H1 2026, CSC Financial Says

China's listed insurance companies demonstrated solid performance in the first half of 2026, with both their core insurance operations and investment returns showing significant improvement, according to a new research report from China Securities Co., Ltd. (CSC Financial). The brokerage highlighted that the sector's investment thesis is now shifting toward long-term value restoration and opportunities in high-dividend stocks, suggesting a favorable outlook for investors.

H1 2026 Performance Highlights

CSC Financial reported that the industry's liability side, which represents its insurance business, saw steady growth, while the asset side benefited from a more favorable equity market. The firm's analysis of major listed insurers revealed strong year-over-year growth across key metrics.

• Life Insurance NBV: The arithmetic average for New Business Value (NBV) across seven listed insurers grew by +13.7%, primarily driven by a +20.3% increase in the agent channel.
• P&C Underwriting Profit: Five listed property and casualty insurers saw their combined underwriting profit rise by +15.3%, with auto insurance being a key contributor due to improved expense management.
• Investment Returns: Amid better equity market conditions, seven insurers posted an average annualized total investment yield of 5.5%, an increase of 1.3 percentage points from the prior year.
• Net Profit: The average growth in net profit attributable to parent companies for the seven insurers was +70.9%.

Favorable Outlook and Key Drivers

Looking ahead, CSC Financial anticipates that the sector's momentum will be sustained by several positive factors. The firm believes the focus will pivot from short-term results to long-term valuation recovery, supported by both operational and regulatory tailwinds.

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On the liability side, the report points to a confluence of four positive trends: strong consumer demand for savings-oriented insurance products, favorable policies aimed at curbing excessive competition, proactive expansion of sales channels, and a strategic shift towards higher-quality, dividend-paying policies. For P&C insurers, regulatory reforms are expected to optimize expense ratios and consolidate the market positions of leading players.

Valuation and Investment Potential

According to the brokerage, the Chinese insurance sector currently trades at an attractive valuation with a high margin of safety. As of August 31, mainland-listed A-shares were trading at a Price-to-Embedded-Value (P/EV) ratio of 0.47x to 0.70x, while Hong Kong-listed H-shares were at 0.28x to 0.56x.

Furthermore, the sector's appeal is enhanced by growing shareholder returns. Seven listed insurers have already announced interim dividends, with an average growth rate of +24.7%. Some stocks offer dividend yields exceeding 4%. CSC Financial concluded that the sector's long-term allocation value is significant and recommended that investors view any short-term price pullbacks as potential buying opportunities.