【6963】Sunshine Insurance 2025 Net Profit Increases 16% to 6.3 Billion RMB, Dividend of 0.19 Yuan; Group to Seek High-Grade High-Credit Debt Portfolio to Address Low Interest Rate Environment

Sunshine Insurance Group (06963)
Net profit attributable to the parent company’s shareholders in 2025 was approximately RMB 6.31 billion, up 15.7% year-on-year, with earnings per share of RMB 0.55. The dividend per share remained at RMB 0.19, unchanged from the previous year. In a macro environment with low interest rates, Executive Director and Co-CEO Peng Jihai revealed that in 2026, the group will adhere to the asset-liability matching principle, continue to seek high-grade, high-credit bond portfolios, and participate in the national fund’s “equity plus bonds” strategy. The stock allocation will be split 70/30, with 70% in high-dividend stocks and 30% in growth stocks.

Sunshine Insurance Seeks to Deploy High-Grade, High-Credit Bonds; 70% Stock Allocation in High-Dividend Stocks

In 2025, Sunshine Insurance’s total investment assets were about RMB 640.2 billion, with fixed income financial assets accounting for 72.1%, and equity financial assets accounting for 21.4%, of which stocks made up 13.7%.

The group stated that in a macro environment with cyclical low interest rates, bond investments accounted for 52.2% of total investment assets in 2025, down 5.5 percentage points from the end of the previous year, mainly due to rising interest rates causing a decline in the valuation of existing long-term bonds.

Peng Jihai, Co-CEO and General Manager of Sunshine Assets, said that given the expectation that bond yields will fluctuate within a narrow range in 2026, the group will continue to adhere to the asset-liability matching principle.

He pointed out that specifically, the company will actively seek high-grade, high-credit bond portfolios, while strictly assessing credit ratings to ensure stable returns and risk control. Additionally, it will actively invest in innovative product development and enhance overall returns through participation in the “equity plus bonds” strategy of the national fund.

Regarding stock allocation, Peng Jihai said the company plans to allocate 70% to high-dividend stocks and 30% to growth stocks. He emphasized that the company considers not only dividends and yields but also the cash flow stability, sustainable growth potential, and valuation of high-dividend companies. For growth stocks, the focus is on industry policy support and technology sectors, with a long-term investment approach.

Life Insurance CSM Rises 13.3% to RMB 57.6 Billion; Mao Dan: Expect Continued Growth in New Business Profitability

The company’s life insurance contract service margin (CSM) increased from RMB 50.8 billion in 2024 to RMB 57.6 billion in 2025, a 13.3% increase. Group Chief Actuary Mao Dan explained that approximately RMB 9.4 billion of the CSM was contributed by new business, with amortization deductions of about RMB 4.7 billion, accounting for 7-8% of the CSM, in line with industry levels. The remaining changes were due to interest and valuation adjustments.

Mao Dan forecasted that, over the long term, sustained growth in new business will continue to boost CSM, and with ongoing optimization of the business structure and refined management, profitability will remain stable and grow steadily.

Implementation of “Reporting and Operating as One” to Optimize Insurance Costs and Company Cash Flow

The “Reporting and Operating as One” policy impacts the insurance industry ecosystem. The Financial Regulatory Administration’s Property and Casualty Department promotes the implementation of “Reporting and Operating as One” and “Pay-First, Issue Policy,” meaning that insurance companies must report product terms and rates to regulators that are consistent with actual implementation.

Hua Shan, General Manager of Sunshine Property & Casualty, stated that once implemented, these measures will positively impact the non-auto insurance sector, with claims ratios expected to remain relatively stable and costs continuously optimized. The “Pay-First, Issue Policy” arrangement will have a positive effect on the company’s cash flow structure, helping to enhance operational stability.

Property & Casualty Underwriting Combined Ratio Exceeds 102% Due to Reserve Provisions for Discontinued Financing Guarantee Insurance

Data shows that in 2025, the combined underwriting cost ratio reached 102.1%, with an underwriting loss of RMB 1.03 billion. Guarantee insurance had a combined ratio of 129%, with a loss of RMB 1.51 billion.

Li Ke, Co-CEO and General Manager of the group, explained that this loss was mainly due to the group’s decision to cease new financing guarantee insurance business from January 1, 2025, in response to market changes and macroeconomic policies. Since financing guarantee insurance policies typically have a 36-month term, the group made risk provisions in 2025, resulting in the recorded loss.

Aging Brings 10 to 20 Years of Certainty Opportunities; Improving Senior Market Product Matrix

In response to aging populations, Sunshine Insurance has been actively developing the senior market in recent years. Li Ke stated that aging presents a certain 10- to 20-year opportunity for the insurance industry. Over the past three years, the group has conducted large-scale, systematic research on the needs of senior clients and continuously improved its insurance product offerings for this demographic.