Sunshine Insurance's 20th Anniversary Report: Double-Digit Growth in Premiums and Net Profit, Life Insurance Exceeds 100 Billion Yuan for the First Time, and Property Insurance Underwriting Losses

In 2025, the insurance industry continues to navigate through a period of “endurance.” Persistently low interest rates exert ongoing pressure, with asset shortages and spread losses shadowing the sector. Although there are signs of a rebound on the liability side, growth remains constrained, and the industry as a whole is still in the deep waters of transformation.

On March 16, Sunshine Insurance released its 2025 annual results. While most of the industry is anxious about spread losses, this 20-year-old insurer delivered a “dual-wheel” performance: investment activities support profit margins with a 6.1% comprehensive return, and cost controls—reducing expenses by over 2 billion yuan—help maintain bottom-line profitability. Between offense and defense, the company’s net profit attributable to shareholders grew by 15.7%.

However, the other side of the coin reveals significant sector divergence: life insurance premiums broke the 100 billion yuan mark for the first time, with new business value increasing nearly 50%; meanwhile, property and casualty (P&C) insurance was dragged into a quagmire by guaranteed policies, with a single line of business incurring an underwriting loss of 1.51 billion yuan, directly turning underwriting from profit to loss.

Through the numbers, one can sense the profound transformation this private insurer is undergoing. From personnel changes to strategic focus, from organizational restructuring to technological empowerment, Sunshine is setting its own pace to pave the way for its second decade. Yet, cautious market expectations for 2026 and UBS’s recent downward revision of target prices remind us that external scrutiny remains, and the cycle’s test is far from over.

Profit Growth: Offense in Investment, Defense in Costs

The annual report shows that Sunshine Insurance’s total premium income for the year reached 150.72 billion yuan, up 17.4% year-over-year; net profit attributable to shareholders was 6.31 billion yuan, up 15.7%. Both core indicators achieved double-digit growth. The embedded value of the group reached 1.208 trillion yuan, a 4.3% increase from the end of last year. Based on this, the board plans to distribute a final cash dividend of 0.19 yuan per share (tax included), totaling approximately 2.185 billion yuan.

Looking back at recent data, Sunshine’s net profit attributable to shareholders declined consecutively in 2022 (48.8 billion yuan) and 2023 (37.4 billion yuan), but rebounded strongly by 45.8% in 2024, and in 2025, this upward trend continued further.

The sustained profit growth hinges on steady investment returns. In 2025, the company achieved net investment income of 19.83 billion yuan, up 3.3%; total investment income was 25.23 billion yuan, up 27.1%; and comprehensive investment income reached 32.44 billion yuan, up 8.9%. The company’s annual net investment yield was 3.7%, total investment yield 4.8%, and comprehensive investment yield 6.1%, with respective changes of -0.5, +0.5, and -0.4 percentage points from the previous year.

Source: Sunshine Insurance 2025 Annual Report

As of December 31, 2025, the company’s total investment assets amounted to 640.20 billion yuan, a 16.7% increase from the end of last year.

Source: Sunshine Insurance 2025 Annual Report

In terms of asset allocation, fixed-income financial assets accounted for 72.1%, totaling 4,619.9 billion yuan, up 13.6% year-over-year. Bond investments reached 3,342.9 billion yuan, a 5.9% increase, significantly lower than the 27.1% growth in 2024. Equity financial assets totaled 1,364.3 billion yuan, representing 21.4% of total investments, up 1.4 percentage points from the end of last year. Stocks and equity funds made up 14.9%, up 1.6 percentage points.

Sunshine Insurance stated in its announcement that in the secondary market, it continues to strengthen allocations to high-dividend, fundamentally sound value stocks to solidify portfolio returns, while balancing OCI and P&L assets to diversify market, industry, and style risks. In the primary market, it focuses on stable-yield, well-managed quality projects, actively expanding investment opportunities around national strategic emerging industries, and exploring innovation in product structures and cooperation models.

If the investment side determines the profit ceiling, cost control safeguards the bottom line.

In 2025, to hedge against operational risks from declining interest rates, Sunshine Insurance implemented management efficiency improvements centered on fixed costs, variable expenses, and liability cost management. The company reduced fixed costs by 9.8%, with Sunshine Property & Casualty and Sunshine Life decreasing variable expense ratios by 1.5 and 8.4 percentage points respectively, totaling a reduction of over 2 billion yuan in fixed and variable costs for the year. The costs of new single premiums and existing policies for Sunshine Life further declined.

Market performance in 2025 showed Sunshine’s stock price experienced a “rise first, fall later” pattern.

At the start of the year, it hovered around HKD 2.87, but as pessimistic expectations eased and fundamentals materialized, the stock surged over 7% on July 28, the company’s 20th anniversary, reaching an intra-year high of HKD 4.54. In the second half, long-term interest rates declined and equity market volatility pressured the sector, causing the stock to retreat and trade sideways in the HKD 3.6–4.0 range. As of the earnings release date on March 16, 2026, the stock closed at HKD 3.70, with a market cap of HKD 42.5 billion.

Source: Tonghuashun iFinD

The stock price’s failure to break further may relate to market cautiousness about 2026 outlook. UBS recently reported that, during the early phase of 2026, Sunshine’s agency channel could see first-year standard premium growth of about 30%. However, increased competition in bancassurance, sluggish product sales, and ongoing product mix adjustments may narrow the new business value profit margin in 2026.

It’s noteworthy that over 70% of Sunshine’s equity securities are classified as FVOCI (Fair Value through Other Comprehensive Income), far exceeding the industry average of 41%. This indicates lower resilience to stock market rebounds. Considering intensified competition in bancassurance, declining interest rates, and regulatory pressures on guaranteed policies, UBS lowered its target price from HKD 4.7 to HKD 4.1.

Life Insurance Performance Soars, P&C Faces Underwriting Losses

By segment, Sunshine Insurance’s 2025 results show a classic “ice and fire” contrast: the life insurance sector flourishes, with premiums surpassing 100 billion yuan and new business value increasing nearly 50%; the P&C sector is weighed down by guaranteed policies, turning profitable lines into underwriting losses.

Source: Sunshine Insurance 2025 Annual Report

The annual report indicates that Sunshine Life’s total premiums reached 102.61 billion yuan in 2025, up 27.5%, marking its first time crossing the 100 billion yuan threshold. New business value was 7.64 billion yuan, up 48.2%, ranking among the industry’s top growth rates. The contract service margin balance was 57.62 billion yuan, a 13.3% increase; net profit was 6.197 billion yuan, up 8.5%.

Channel-wise, individual insurance premiums totaled 25.98 billion yuan, up 13.6%; new single premiums were 6.05 billion yuan, down 7.6%. However, over half of new business was from floating-yield and guaranteed products, reflecting ongoing structural optimization. Bancassurance achieved remarkable results, with total premiums of 67.46 billion yuan, up 34.8%, and new single premiums of 3.409 billion yuan, a 69.0% surge. Floating-yield products accounted for 32.2% of new single premiums.

Source: Sunshine Insurance 2025 Annual Report

In stark contrast, Sunshine Property & Casualty shifted from underwriting profit to underwriting loss in 2025. The P&C business reported gross premiums of 47.89 billion yuan, nearly flat at +0.1%; non-auto premiums grew 4.5%, accounting for 46.1%, up 1.9 percentage points. However, the combined underwriting cost ratio rose to 102.1%, with an underwriting loss of 1.03 billion yuan.

Among lines, auto insurance remains the “ballast” role. Premiums were 25.83 billion yuan, down 3.3%, but with notable structural improvements: household vehicle premiums increased by 2.6 percentage points, and new energy vehicle premiums by 3.2 percentage points. The combined cost ratio was 98.2%, down 0.9 points, resulting in underwriting profit of 480 million yuan, up 2.4 billion yuan year-over-year. In the fiercely competitive auto market, this performance is commendable.

Non-auto insurance had mixed results. Excluding guaranteed policies, the combined cost ratio was 98.9%, with underwriting profit of 490 million yuan. However, liability and cargo transport insurance lines faced high costs, resulting in underwriting losses.

Source: Sunshine Insurance 2025 Annual Report

The real “gap” stems from guaranteed policies. In 2025, the guaranteed insurance segment’s combined cost ratio soared to 129.0%, with an underwriting loss of 1.51 billion yuan. The company explained that, to adapt to market changes and macro policy adjustments, it decided to cease new guaranteed insurance business from 2026 and made reserve provisions for prudence.

The issue is that Sunshine Property & Casualty’s decision came somewhat late. The industry had already seen a wave of retreat from guaranteed financing insurance in the past two years. Public information shows that Ping An Property & Casualty suspended financing guarantees in Q4 2023; PICC P&C fully shut down its core financing guarantee product “Tai Xiang Dai” early 2025; PICC also shifted focus to trade credit insurance. Dadi Insurance stopped adding new related business at the end of 2025.

Compared to these, Sunshine’s delay in halting was about half a year. This may be due to reluctance to give up the premiums and profits from loan-related business. As the industry’s leading players have already exited, Sunshine’s hesitation cost it 1.51 billion yuan in underwriting losses in 2025.

Personnel Changes and Strategic Focus in Tandem

In 2025, Sunshine Insurance marked its 20th anniversary, but the spotlight was not only on performance—it also revealed a profound personnel reshuffle and strategic realignment.

On April 2, 2025, Sunshine Insurance Group announced personnel appointments: Liu Yingchun was appointed Vice President of the group, while Wang Yongwen and Gu Wei were relieved of their vice president roles. Their departure was seen as a sign that the core management team from the startup phase was gradually stepping down.

Veterans of the company’s founding exited, replaced by mid-generation leaders, with management teams at the group and subsidiaries being streamlined. The core management teams of the life and property & casualty subsidiaries were reduced to eight members each.

This is a natural generational shift after two decades of development, but also reflects the insurer’s proactive strategic adjustments amid low interest rates, asset shortages, and tighter regulations: a need for younger, more professional, and more refined management teams.

Behind personnel changes is a clearer strategic path. The chairman’s message in the annual report emphasized a development tone of “focusing on doing well and seeking progress within good,” strengthening development capabilities, and advancing value creation. Innovation in models, data technology, and core capacity building are prioritized to lay a solid foundation for the company’s next twenty years.

In business strategy, each segment has its focus. Sunshine Life aims to capitalize on the relatively stable interest rate environment, pursuing multi-channel growth and dual-driven development of marketing and bancassurance, promoting comprehensive value business. Sunshine Property & Casualty plans to leverage the rational return to auto insurance and the “reporting and operation integration” policy for non-auto lines to improve profitability and systematically enhance sales team quality, opening a new cycle of value growth. Sunshine Asset Management adheres to core yield and asset-liability matching principles, seizing the trend to support high-quality, high-value development.

Personnel reshuffle and strategic focus are advancing in tandem, with Sunshine Insurance laying the groundwork for the next decade.