Orient Securities has released a research report indicating that life insurance premium growth slowed notably in July, primarily due to a high comparison base from the same period last year and the impact of bancassurance channel adjustments following the implementation of Document No. 65. However, the rising share of participating policies, persistently low预定利率, and standardized channel fee structures continue to drive down liability costs, with life insurance operations increasingly focused on value-driven growth.
The property and casualty insurance segment saw a rebound in premium growth, with short-term health insurance and liability insurance contributing the most incremental gains. As auto insurance growth stabilizes and non-auto insurance comprehensive rectification efforts proceed, underwriting profitability for P&C insurers is expected to improve steadily. The core logic driving the current industry narrative remains the decline in life insurance liability costs coupled with new business value growth, alongside improved underwriting profitability in the P&C sector.
Orient Securities' key perspectives are as follows:
Event Overview: National Financial Regulatory Administration Releases Insurance Industry Operating Data for January-July 2026
Total insurance industry premium income for January-July 2026 reached RMB 4.289 trillion, representing a year-on-year increase of 1.9%. This breaks down to RMB 3.1708 trillion for life and health insurance and RMB 1.1182 trillion for P&C insurance, up 1.8% and 2.3% year-on-year respectively, indicating stable overall scale growth.
Life Insurance Monthly Decline Significantly Widens, with High Base and Bancassurance Policy Adjustments Jointly Impacting Short-Term Sales
For the January-July 2026 period, life insurance premium income stood at RMB 2.6375 trillion, up 2.4% year-on-year. However, July alone recorded RMB 243.5 billion, down 15.6% year-on-year, marking a substantial widening of the decline compared to June. Given that the base period of July-August 2025 remains elevated, short-term premium growth is expected to continue facing pressure, with liability cost reduction and NBV growth remaining the core operational focus.
Looking at distribution channels, the individual agency channel faces pressure on short-term premium growth due to a high base created by product discontinuation and switching during the same period last year. However, the ongoing transition toward participating policies continues, and the trend of improving liability costs persists. As traditional insurance policy预定利率 continue to decline and the proportion of participating policies rises, product liability costs will keep falling. Meanwhile, listed insurers are placing greater emphasis on NBV and value margins, with individual agency growth increasingly dependent on improvements in agent productivity, optimized product mix, and the accumulation of renewal business. While the high base primarily suppresses new policy and premium scale performance in the short term, the rising share of participating policies and improved value margins remain supportive of NBV growth.
Regarding the bancassurance channel, Document No. 65 has been fully implemented since July 1st, further tightening channel fee constraints and marking the entry of bancassurance operations into an adjustment period following policy implementation. The new regulation brings commissions paid to banks, bancassurance specialist compensation incentives, training and customer service fees, and allocated fixed expenses more comprehensively into filing and execution management, further narrowing the space for fee shifting and additional channel incentives. Concurrently, the cap on participating policy illustrative rates was lowered from 3.9% to 3.5%, with the June product transition creating a phase of front-loaded sales. The bancassurance channel thus faces simultaneous adjustments in both fees and products. Given that bancassurance sales are relatively sensitive to channel incentive changes, sales momentum is expected to be somewhat affected during the early stages of policy implementation. In the medium term, reduced channel costs will help lower customer acquisition expenses and improve business value margins, elevating the importance of product competitiveness, customer management, and branch-level productivity.
P&C Monthly Growth Rebounds with Non-Auto Insurance Contributing the Bulk of Incremental Gains, While Internal Growth Continues to Diverge
P&C insurance premium income for January-July 2026 reached RMB 1.1182 trillion, up 2.3% year-on-year. July alone recorded RMB 133.6 billion, an increase of 3.7% year-on-year, further improving from June's performance. By line of business, auto insurance premiums in July were RMB 73.9 billion, up just 0.1% year-on-year, with overall scale remaining stable. In July, passenger vehicle sales fell 0.8% year-on-year, while new energy vehicle sales surged 23.7% year-on-year, reflecting weaker traditional fuel vehicle sales against the backdrop of rapid NEV growth. New vehicle sales primarily impact the new business of auto insurance, and monthly vehicle sales fluctuations have a certain effect on overall auto premium volumes. The continued rise in NEV penetration provides some support to auto insurance premium scale. Against the backdrop of low-growth auto insurance premiums, listed insurers' CORs are gradually trending downward, with underwriting profitability improving steadily.
Non-auto insurance premiums in July reached RMB 59.7 billion, up 8.5% year-on-year, significantly outpacing auto insurance and serving as the primary driver of July's P&C premium growth. Among these, short-term health insurance, liability insurance, agricultural insurance, and short-term accident insurance generated monthly premiums of RMB 12.9 billion, RMB 11.5 billion, RMB 13.9 billion, and RMB 4.9 billion respectively, up 25.2%, 10.6%, 4.5%, and 2.1% year-on-year. The rebound in non-auto insurance growth during July was primarily driven by short-term health and liability insurance. As comprehensive rectification of non-auto insurance continues, improvements in business quality are expected to provide ongoing support for underwriting profitability.
Risk Disclosures
Downside risks include long-term interest rates declining more than expected; significant volatility in the equity market; life insurance reform results falling short of expectations; P&C comprehensive cost ratio rising more than anticipated; resident income failing to meet expectations; and regulatory policy change risks.