China Reinsurance's net profit in 2025 declined by 7.8% year-on-year, and Dadi Property & Casualty's "Number Six" position may no longer be guaranteed.

Asking AI · The Land of Earth Property & Casualty’s “Sixth Old” Position Faces Challenges—How Significant Is the Impact of Impairments on Transition Business?

【Text / Yu Shan Guan Jin Studio Li Limeng】

On March 30, domestic reinsurance giant China Reinsurance (Group) Corporation (01508.HK) released its 2025 annual performance announcement. The data show that in 2025, China Re’s combined gross premium income was 180.368 billion yuan, up 1.1% year on year; combined insurance service income was 103.087 billion yuan, up 1.7% year on year; net cash flow amounted to 18.574 billion yuan, up significantly 79.51% year on year; net profit was 10.217 billion yuan, down 7.8% year on year; and net profit attributable to shareholders of the parent company was 9.771 billion yuan, down 7.44% year on year. Basic earnings per share were 0.23 yuan, with average return on average net assets of 9.29%, down 1.34 percentage points from the same period last year.

Regarding the reasons for the decline in profit, China Re explained in the announcement that it was mainly based on the macro environment and market changes; the group prudently assessed assets and liabilities and further enhanced its resilience for sustainable growth. China Reinsurance is divided into three major business segments: property reinsurance, life reinsurance, and direct property insurance; in 2025, the net profit of the direct property insurance segment (mainly China Earthquake Insurance) fell sharply by 14.7% year on year.

China Earthquake Insurance’s “Sixth Old” status may be uncertain; the gap with “Seventh Old” Sunshine Property & Casualty has shrunk to within 1 billion yuan

The financial report shows that in 2025, China Reinsurance’s direct property insurance segment, China Earthquake Insurance, achieved insurance service income of 48.869 billion yuan, up 4.2% year on year, accounting for 46.6% of the group’s insurance service income; net profit fell sharply by 14.7% year on year. The report clearly states that the sudden drop in profit was mainly due to provisions for impairment losses for transition business. It is also worth noting that Sunshine Property & Casualty’s premium income in 2025 had reached 47.89 billion yuan, narrowing the gap with China Earthquake Insurance from 3 billion yuan in 2024 to about 1 billion yuan.

2025 Premium Income Ranking

Meanwhile, in 2025, China Earthquake Insurance also ran into compliance issues. In 2025, it received high regulatory fines for multiple violations. On August 1, 2025, due to multiple violations including failing to use approved or filed insurance clauses and premium rates, etc., China Earthquake Insurance and the relevant responsible personnel were collectively fined 6.08 million yuan. In addition, branch offices in Zhejiang, Tianjin, Inner Mongolia, Shandong, and other places were also fined in succession for issues including providing benefits to policyholders outside the contract, entrusting unqualified institutions to sell insurance, and falsifying financial and business data, among others.

China’s largest professional property reinsurance leader consolidates its leading position; pre-tax profit of 6.566 billion yuan

In 2025, as China’s largest professional property reinsurance company, this segment—amid short-term pressure on agricultural insurance business—built its growth foundation through structural upgrading, and stabilized its core profitability through cost control, continuously strengthening its leading market position.

On the business side, domestic property reinsurance ceded premium income reached 40.106 billion yuan, up 3.5% year on year. Within this, ceded premium for motor vehicle insurance was 11.877 billion yuan, up 7.5% year on year, driven mainly by vigorous expansion into new tracks such as new-energy vehicle insurance. Ceded premium for non-motor insurance was 28.228 billion yuan, up 1.9% year on year; short-term health insurance, IDI, catastrophe insurance and other emerging businesses together achieved total ceded premium of 4.598 billion yuan, becoming a new growth engine. On the client service side, it maintained business relationships with 86 domestic property insurance companies, with a client coverage rate of 97.7%. The share of contracts held by the chief reinsurer was over 40%. These two core indicators remained firmly ranked first in the market, and the industry’s right to speak continued to be strengthened.

On the profitability side, insurance service income for the segment was 45.812 billion yuan, a slight decrease of 0.5% year on year. The main reason was a decline in the scale of ceded premiums for agricultural insurance. However, cost-side controls delivered notable results: insurance service expenses decreased 4.2% year on year to 38.106 billion yuan. Together with increases of 3.3% and 6.2% in interest and investment income respectively, the segment ultimately achieved pre-tax profit of 6.566 billion yuan, flat year on year. Net profit was 5.114 billion yuan, down only 1.2%. The combined cost ratio for domestic operations was 95.98%, up 3.21 percentage points year on year, mainly affected by the low base effect from the release of initial losses in agricultural insurance in the same period last year.

Life reinsurance net profit down 7.4% year on year; insurance service fees up 18.3%

During the reporting period, insurance service income of the life reinsurance segment rose slightly by 2.5% year on year to 10.088 billion yuan, basically flat. It relied mainly on steady development of protection-type business. Investment income was a highlight, surging 148.2% year on year to 7.841 billion yuan.

However, cost-side pressure was significantly amplified: insurance service expenses increased 18.3% year on year to 12.930 billion yuan. Due to updates to assumptions for some businesses, it eroded profit space; underwriting financial losses, though, decreased 7.6% year on year to 3.203 billion yuan. At the same time, investment income from associates fell 11.1% year on year to 0.873 billion yuan. With multiple factors compounding, net profit of the life reinsurance segment fell 7.4% year on year to 3.896 billion yuan.

Total investment assets of 4620.63 billion yuan; third-party asset management scale down 12.8% year on year

As of the end of 2025, the group’s total investment assets balance was 4620.63 billion yuan, up 4.1% year on year. Total investment income for the full year was 182.49 billion yuan, up 4.9% year on year; the total investment yield was 4.66%.

The financial report shows that in a low-interest-rate environment, the group actively optimized the structure of its asset allocation. In 2025, the company increased its investments in other debt investments and other equity instruments. Among them, investments in other equity instruments increased sharply by 61.25% compared with the end of the previous period, and the proportion of total assets rose by 1.28 percentage points.

The balance of managed third-party assets fell to 3340.89 billion yuan, down 12.8% year on year. From the perspective of cash flows, in 2025 the group’s net cash flow from operating activities was 185.74 billion yuan, up 79.51% year on year. Net cash flow from investing activities turned from negative to positive, reaching 103.91 billion yuan.

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