Sunshine Insurance's Main Business Differentiates, Property and Casualty Insurance Underwriting Loss of 1 Billion, Increases Equity Asset Allocation, Total Investment Returns Rise 27%

Source: Yangtze Business Daily

Reporter: Xu Jia

On the 20th anniversary of its founding, Sunshine Insurance (06963.HK) has seen a recovery in overall performance, but its core insurance business shows a differentiated pattern.

Recently, Sunshine Insurance released its annual report. In 2025, the company achieved total revenue of 94.811 billion yuan, up 5% year-on-year; total premium income of 150.72 billion yuan, up 17.4%; insurance service income of 65.07 billion yuan, up 1.7%; net profit attributable to the parent company shareholders (hereinafter referred to as “net profit attributable to the parent”) of about 6.31 billion yuan, up 15.7%.

Yangtze Business Daily notes that in 2025, Sunshine Insurance actively seized market fluctuations to optimize asset allocation, significantly boosting investment returns, which became a key driver of overall performance growth. Meanwhile, the company optimized its asset allocation structure, increased holdings in equity assets, and hedged against valuation fluctuations of long-term bonds caused by rising interest rates. In 2025, the company’s total investment income reached 25.23 billion yuan, up 27.1%.

However, on the other hand, the core insurance business of Sunshine Insurance shows clear divergence. In 2025, Sunshine Life achieved total premium income of 102.61 billion yuan, up 27.5%; new business value of 7.64 billion yuan, up 48.2%. But Sunshine Property & Casualty was dragged down by guaranteed insurance business, facing short-term underwriting pressure. Coupled with the company’s cautious reserve provisioning and plans to suspend new financing guarantee insurance business in response to market conditions and macro policy adjustments, this directly led to underwriting losses in the property and casualty segment.

In 2025, Sunshine P&C’s combined underwriting cost ratio was 102.1%, up 2.4 percentage points year-on-year; underwriting losses reached 1.03 billion yuan. Among them, the guarantee insurance combined cost ratio was 129.0%, with underwriting losses of 1.51 billion yuan.

Total investment assets: 640.2 billion yuan

In 2025, China’s insurance industry entered a new cycle of high-quality development. With the deepening implementation of the “New Sunshine” strategy, Sunshine Insurance’s overall performance recovered on its 20th anniversary.

The annual report shows that in 2025, Sunshine Insurance achieved total revenue of 94.811 billion yuan, up 5%; net profit attributable to the parent of 6.307 billion yuan, up 15.7%; weighted average return on net assets of 10.5%, an increase of 1.6 percentage points year-on-year.

During the reporting period, Sunshine Insurance’s total premium income was 150.72 billion yuan, up 17.4%; insurance service income was 65.07 billion yuan, up 1.7%. As of the end of 2025, the embedded value was 120.78 billion yuan, a 4.3% increase from the previous year; effective customer count reached 29.82 million.

Amid market volatility, Sunshine Insurance seized investment opportunities, achieving a significant increase in investment returns, which also became an important growth driver for the company’s performance.

In 2025, Sunshine Insurance’s total investment income was 25.23 billion yuan, up 27.1%; comprehensive investment income was 32.44 billion yuan, up 8.9%.

During the period, the company’s net investment yield was 4.8%, down 0.5 percentage points; total investment yield was 4.8%, up 0.5 percentage points; comprehensive investment yield was 6.1%, down 0.4 percentage points. By the end of 2025, the company’s total investment assets reached 640.2 billion yuan, a 16.7% increase from the previous year.

Yangtze Business Daily notes that due to the rise in interest rates leading to a decline in the valuation of existing long-term bonds, as of the end of 2025, Sunshine Insurance’s bond investment scale was 334.287 billion yuan, up 5.6% from the previous year, but its proportion decreased to 52.2%, a drop of 5.5 percentage points.

On the other hand, Sunshine Insurance significantly increased its allocation of equity-type financial assets. As of the end of 2025, the scale of equity assets reached 136.431 billion yuan, up 24.4% from the end of the previous year, accounting for 21.4%. Among these, investments in stocks, equity funds, and wealth management products were 87.514 billion yuan, 7.444 billion yuan, and 30.819 billion yuan, respectively, with increases of 29.5%, 41.3%, and 4.4%, and proportions of 13.7%, 1.2%, and 4.8%.

Sunshine Insurance also stated that the company adheres to research-driven, active management principles for equity assets, actively explores investment opportunities, and emphasizes investments in high-dividend-yield value stocks and high-quality growth stocks with sustainable growth.

However, it should be noted that as of the end of 2025, Sunshine Insurance’s core solvency adequacy ratio and comprehensive solvency adequacy ratio were 136% and 196%, respectively, down 22 and 31 percentage points from the end of the previous year.

Specifically, Sunshine Life’s core solvency adequacy ratio and comprehensive solvency adequacy ratio were 110% and 170%, respectively, down 27 and 36 percentage points; Sunshine P&C’s ratios were 172% and 237%, respectively, up 7 and 4 percentage points.

Property & Casualty underwriting losses due to guarantee insurance drag performance

Despite the support from investment efforts, the performance of Sunshine Insurance’s core insurance businesses—life and property & casualty—showed significant divergence.

The annual report indicates that in 2025, Sunshine Life further deepened its diversified development strategy, effectively promoted product structure optimization, accelerated team transformation and upgrading, and steadily improved value creation across business lines, laying a foundation for long-term high-quality development.

During the period, Sunshine Life achieved total premium income of 102.61 billion yuan, up 27.5%; new business value of 7.64 billion yuan, up 48.2%.

By channel, in 2025, Sunshine Life’s individual insurance business achieved total premium income of 25.98 billion yuan, up 13.6%; but new single premium of 6.046 billion yuan, down 7.6%.

Yangtze Business Daily notes that in the traditional team, in 2025, the average activity capacity per agent was 22,000 yuan, down 3,000 yuan or 12%; new agent activity capacity was 18,000 yuan, unchanged from the previous year, while elite team members maintained more than twice the capacity of traditional agents.

In bancassurance channels, in 2025, Sunshine Life expanded its multi-channel approach, achieving total premium income of 67.46 billion yuan, up 34.8%. Among these, new single premium was 34.09 billion yuan, up 69%; floating-yield products accounted for 32.2% of new single premiums, with an average activity capacity of 148,000 yuan.

Additionally, in 2025, the combined premium income from other channels such as group insurance and telemarketing was 9.18 billion yuan, up 21.6%.

In contrast to steady growth in the life insurance segment, Sunshine P&C’s 2025 performance was relatively volatile, with underwriting facing short-term pressure.

The annual report shows that in 2025, Sunshine P&C’s original premium income was 47.89 billion yuan, nearly unchanged (+0.1%). Among these, motor vehicle insurance was 25.83 billion yuan, down 3.3%; non-vehicle insurance premiums increased by 4.5%, accounting for 46.1%, up 1.9 percentage points.

However, during the period, Sunshine P&C’s combined underwriting cost ratio was 102.1%, up 2.4 percentage points; underwriting losses reached 1.03 billion yuan, compared to underwriting profit of 123 million yuan in the same period last year. Non-guaranteed insurance’s combined cost ratio was 98.9%, with underwriting profit of 490 million yuan; guarantee insurance’s combined cost ratio was 129.0%, with underwriting losses of 1.51 billion yuan, becoming the main reason for the underwriting loss.

Sunshine Insurance explained that this was mainly due to the company’s decision to cease new financing guarantee insurance from 2026 in response to market and macro policy changes, and the prudent reserve provisioning led to a significant increase in the guarantee insurance combined cost ratio in 2025.

In 2023 and 2024, the guarantee insurance combined cost ratios were 98.8% and 99.0%, respectively.

Excluding guarantee insurance, in 2025, the combined cost ratio was 98.9%, down 1 percentage point year-on-year; underwriting profit was 487 million yuan, up 595.7%.

Additionally, in 2025, the combined cost ratios for liability insurance and cargo transportation insurance also reached 104.8%, with underwriting losses of 17.4 million yuan and 12.6 million yuan, respectively.

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Editor: ZB