Life insurance premiums fell 13.6% YoY in August; some insurers kick off 2027 early-year sales earlier

Life Insurance Premiums Continue to Face Headwinds

1. Cumulative and Monthly Performance (Jan–Aug 2026)

• Total original premium income for life insurance companies reached 3,571.9 billion yuan in the first eight months of 2026, down -0.2% year-on-year, turning negative from +1.8% in the Jan–Jul period.
• In August alone, original premiums totaled 401.1 billion yuan, a decline of -13.6% year-on-year, widening by 0.4 percentage points (pct) from July.

2. Investment-Type Products

• Policyholder investment deposits (mainly universal life insurance) grew +8% year-on-year in the Jan–Aug period. However, August saw a -8% year-on-year decline, reversing from +4% in July.
• Investment-linked insurance fell -42% year-on-year in Jan–Aug, with August alone dropping -69%, a 22 pct deeper decline than in July.

3. Outlook for September

We expect that the short-term pressure on new policy growth in July–August was mainly due to a high base in the same period last year and the impact of the Bank-Insurance Channel Document No. 65. Premium growth is likely to see marginal improvement in September.

According to Jinribao reports, some insurers have begun holding 2027 "Door-Opening" (Q1 sales campaign) launch meetings since early to mid-September, with preparations potentially starting earlier than last year. We anticipate that the 2027 Door-Opening products will continue to feature participating (dividend) insurance as the main offering, with a guaranteed return of 1.75% plus floating returns, which remains attractive to customers.

Health Insurance: August Growth Slows Significantly

• Jan–Aug 2026: Health insurance premiums reached 783.8 billion yuan, up +3.1% year-on-year.
• August alone: Premiums totaled 73.8 billion yuan, up only +0.1% year-on-year, a slowdown of 3.6 pct compared to July.
• Share of total premiums: Health insurance accounted for 20% at end-August, down 0.4 pct from end-July.

Our View: Against the backdrop of deepening cooperation between basic medical insurance and commercial health insurance, the development potential for commercial health insurance remains significant. By integrating insurance, health check-ups, rehabilitation, elderly care, pharmaceuticals, and hospital services into a "health management + medical services + insurance" one-stop ecosystem, insurers can effectively enhance customer loyalty and drive business growth.

Property & Casualty Insurance: August Growth Slips

1. Overall Performance

• Jan–Aug 2026: P&C insurance premiums totaled 1,247.3 billion yuan, up +2.2% year-on-year.
• August alone: Premiums reached 129.1 billion yuan, up +1.8% year-on-year, a slowdown of 1.9 pct from July. Both auto and non-auto insurance premiums saw month-on-month growth declines.

2. Auto Insurance

• Cumulative premiums were flat year-on-year.
• August auto insurance premiums fell -0.1% year-on-year, turning negative again (July: +0.2%).
• According to the China Association of Automobile Manufacturers, August auto production and sales fell -4.7% and -5.1% year-on-year, respectively. Domestic market monthly sales continued to face pressure, while new energy vehicle production and sales grew +19% and +18%, respectively.

3. Non-Auto Insurance

• Cumulative premiums rose +4.4% year-on-year.
• August non-auto premiums grew +4.6% year-on-year, slowing by 3.7 pct from July. Breakdown by line:
• Health insurance: +29% (up 2 pct from July)
• Liability insurance: +9% (down 1 pct from July)
• Accident insurance: +2% (flat vs. July)
• Agricultural insurance: -3% (down 8 pct from July)

4. Our View: Q3 2026 has seen more natural disasters compared to the same period last year, which may have a short-term impact on the combined ratio (COR). However, with the ongoing comprehensive remediation of non-auto insurance and continued cost-reduction and efficiency-improvement efforts by insurers, the overall profitability of the property insurance industry is expected to gradually improve.

Sector Outlook: Fundamentals Remain Resilient; Valuation Recovery Potential Continues

• Demand remains strong. The transition to participating (dividend) insurance will further optimize fixed liability costs, alleviating pressure from interest rate spreads.
• Bond yield environment: The 10-year government bond yield has recently fallen to around 1.67%. We expect that as the domestic economy recovers, a rebound in long-term interest rates could ease pressure on insurers' new fixed-income investment returns.
• Institutional positioning: As of end-Q2 2026, public fund holdings of insurance stocks fell to 0.42%, significantly underweighted.
• Valuation: As of September 24, 2026, the insurance sector is trading at 0.45–0.83x 2026E PEV and 0.88–1.58x 2026E PB, both at historical lows.

Rating: We maintain an "Overweight" rating on the insurance sector.