NCI "Investment Operator" Appears at Performance Briefing, Reveals Equity Investment Strategy

NCI recently disclosed its 2025 performance, reaching a new historical high.

During the reporting period, net profit attributable to the parent company was 36.284 billion yuan, a year-on-year increase of 38.3%; total premium income was 195.871 billion yuan, a year-on-year increase of 14.9%; and investment income exceeded the 100 billion yuan mark for the first time.

On the afternoon of March 30, core executives from NCI appeared in Beijing to address investor concerns.

Among them, Chen Yijiang, President of NCI Asset Management Company, was present. He is the core "investment operator" of NCI's investment base and gave a detailed response regarding the investment paths for insurance funds in a Low Interest Rate Environment.

Zishi Tang has summarized the key points of this performance briefing as follows for our readers.

Investment Strategy in a Low Interest Rate Environment

In 2025, NCI's total investment yield reached 6.6%, which is the result of the company's long-term adherence to value investment, long-term investment, and asset-liability management.

Regarding interest rate trends, we believe the short-term will still show a volatile pattern, with credit spreads narrowing and term spreads widening. Short-term liquidity is relatively loose with strong certainty, while ultra-long-term interest rate volatility is increasing, and short-term and long-term rates are diverging. In a Low Interest Rate Environment, fixed-income investment needs to capture interest rate changes and structural opportunities to achieve reasonable returns.

Regarding the equity market, the company is optimistic about the medium-to-long-term development of China's capital market. Focus will be placed on three directions:

First, industries with high prosperity and continuous performance optimization.

Second, industries that align with national strategic directions, especially those related to new quality productive forces.

Third, investment targets with high dividend characteristics in a Low Interest Rate Environment.

Adherence to Absolute Return Orientation

Based on the above judgment, the company will adhere to the following principles in its 2026 asset allocation.

First, adhere to asset-liability matching. Arrange asset duration and structure reasonably based on liability characteristics to ensure that investment returns cover liability costs.

Second, adhere to diversified and multi-channel allocation. Optimize the portfolio structure among fixed income, equity, and alternative assets to enhance risk resistance and return elasticity.

Third, adhere to an absolute return orientation. Pay attention to the margin of safety amidst market fluctuations, seize structural opportunities, and achieve long-term stable returns.

Overall, the macroeconomic environment and financial markets in 2026 still face uncertainties, which present both challenges and opportunities for insurance fund management. The company will continue to track macro and policy changes, striving to create stable returns for customers and investors.

How to Cope with Equity Market Volatility

Regarding equity assets, it should be said that the company attaches great importance to the strategic role of equity assets within the overall investment portfolio. This is based on a strategic judgment that China's capital market is trending toward long-term improvement and is full of resilience.

In 2026, the company will continue to respond to medium-to-long-term market orientations, combine this with liability management needs and specific market changes, adhere to the general principle of seeking progress while maintaining stability, and coordinate the pace and structure of equity asset allocation.

There are three perspectives regarding the impact of capital market volatility on the company's operation and management:

First, under the concept of "big equity," the company conducts diversified asset allocation. This equity asset allocation—including our industry distribution, layouts in A-shares and H-shares, active and passive strategies, and distribution between dividend-paying assets and growth assets—uses portfolio effects to achieve dispersion of related volatility.

Second, strengthen research-driven investment behavior through the integration of investment and research. Practice has shown that our investment team is able to identify strategic targets including those with attractive valuations, high dividends, and high-growth potential, proving our professional confidence in this area.

Third, under the broad framework of asset management, especially in conjunction with the transformation of the liability side including participating insurance, effectively perform asset-liability management based on account incentive mechanisms.

Talking about the Honghu Private Equity Fund

Regarding the multiple insurance fund long-term investment reform pilot funds (Honghu Fund) jointly established by NCI and China Life, as of March 2024, three phases of the pilot have been carried out over the past two years, achieving a harvest in both social and economic benefits.

In terms of capital injection into the Honghu Fund, NCI has cumulatively invested 46.25 billion yuan. The establishment of the fund helps optimize asset-liability management and is also conducive to the stable and healthy long-term development of the capital market.

In terms of diversified investment, the company firmly executes this strategy. The selection of directions primarily considers three aspects:

First, in a Low Interest Rate Environment, diversify across asset types, industry distributions, and regional layouts to broaden investment space and raise the long-term return ceiling of the portfolio.

Second, respond to the national transformation of growth drivers and the development of strategic emerging industries, providing broad space for insurance funds to participate in diversified investment.

Third, rely on the investment capabilities accumulated by the company over many years and its continuously improving professionalism—including middle-and-back-office risk management and digitalization—to provide a foundation for conducting professional investment.

Wealth Management Opportunities for Life Insurance Companies

The "New Ten Articles" of the insurance industry has already listed wealth management as a primary responsibility and core business of insurance companies, greatly enriching and expanding the connotation and extension of insurance. Currently, the public's demand for wealth preservation and appreciation is very strong and diverse, constantly flowing into the capital market and insurance products.

We are entering a golden opportunity period for wealth preservation and appreciation transfer. The advantages of insurance products, such as stable returns, pension reserves, and intergenerational inheritance, are becoming more prominent—this is an opportunity.

From the perspective of challenges, the primary challenge currently facing China's life insurance industry is how to properly address negative spread risk in a Low Interest Rate Environment and achieve effective matching and coordinated development of assets and liabilities. The 10-year treasury bond yield remains low, and the financial investment attributes of former non-standard alternatives like real estate have significantly decreased. After customers choose to purchase insurance and large amounts of premiums flow into insurance companies, how these premiums can be transformed into long-term returns that weather cycles, overcome volatility, and are ultimately delivered to customers will place higher demands on the operational and investment capabilities of life insurance companies.

High-Base Growth in Premium Income

In 2025, the company indeed achieved excellent results: total premium growth reached 15%, and long-term first-year premiums also achieved rapid growth, establishing a high base for us and bringing a certain level of pressure. However, we have confidence in continuing to maintain stable growth on this high base.

Specifically regarding products and competitive strategies: First, practice the marketing philosophy of "scenario + product + service + technology" to deepen product models. By introducing external medical resources and focusing on disease medical treatment and nursing, we enrich health insurance products; simultaneously, we combine pension wealth management products with pension community resources to create an "insurance + retirement living" model, strengthening asset-liability linkage to support differentiated product development.

Second, address the diverse pension and wealth management needs of an aging society. In 2026, we will continue to strengthen the sales of risk-oriented incremental whole life insurance, while increasing the promotion of long-term annuities and pension annuities. Integrating these with the personal pension system and tax-advantaged policies, we will include whole life annuities and pension annuities in relevant systems to meet customers' retirement and wealth management needs.

Third, build a health protection product system that provides full-cycle solutions for prevention, control, and rehabilitation. Strengthen the link with social security and medical reforms, and explore the development of participating health insurance, consumer medical insurance, specific drug coverage, and nursing disability insurance products.

Regarding risk transformation, the company achieved preliminary results in 2025. On one hand, a breakthrough was achieved in sales, with full-year sales of participating insurance reaching approximately 2 billion yuan, achieving expected results in the context of transformation. On the other hand, the risk management system has taken initial shape. The company integrated front, middle, and back-office resources to launch a series of measures surrounding assessment, product control, team training, ecological synergy, and compliance guidance, forming a relatively complete risk management system.

AI Layout

In 2026, NCI's AI layout will continue to exert effort in four directions.

First, in terms of technology governance, rely on the Digitalization Committee to fully implement the technology plan of the 15th Five-Year Plan and deepen the new pattern of dual-driven technology governance.

Second, in terms of AI application, seven major digital employees will be created this year, covering high-frequency areas such as training, customer service, group insurance, claims, policy preservation, and investment advisory. Through the coordination of large and small models, digital productivity efficiency is expected to improve, equivalent to 3,000 FTEs (full-time equivalents), allowing robots to complete replaceable tasks and employees to focus on high-value work.

Third, deeply mine data value and build an integrated, two-platform, five-level big data architecture to make data change from visible to usable, becoming a core asset for business growth.

Fourth, solidify the data foundation and form a "one cloud, multiple new" infrastructure to achieve elastic scheduling and management of computing, storage, and computing network resource pools, ensuring business continuity.

In short, AI has deeply penetrated all links of NCI's business and management, becoming a core engine for high-quality development. The company will maintain strategic determination, balancing investment in human resources and technology, and strive to let AI generate greater efficiency under the guidance of the technology plan of the 15th Five-Year Plan.