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Hong Kong life insurance remained strong in 4Q25, and 2025 growth was no accident

Institution
JPMorgan
Date
2026-04-26
Authors
MW Kim AC; Dan Wang; Julia Kim
Company
Hong Kong Life Insurance Industry
Ticker
1299.HK; 2628.HK; 1828.HK; 2318.HK
Industry
Insurance
Rating
AIA Group Ltd 1299.HK OW; China Life Insurance-H 2628.HK OW; FWD Group Holdings 1828.HK OW; Ping An Insurance Group-H 2318.HK OW
BullishLow confidenceHong Kong life insurance APE grew 38% YoY in 2025, and still rose 21% YoY in 4Q25; the report believes regulatory adjustments mainly enhance customer protection, while underlying demand remains resilient and may create a virtuous cycle through in-force premium, CSM, core earnings, and DPS.
AuthorsMW Kim AC; Dan Wang; Julia Kim
Target price1299.HK HK$112; 1828.HK HK$47; 2318.HK HK$90; 2628.HK HK$40
Asset classesEquity
Business segmentsLife insurance、New business APE、In-force premium、Broker channel、Agent channel、Single-premium
Research firm divisions/subsidiariesJPMorgan（Other）、J.P. Morgan Securities (Asia Pacific) Limited（Other）、J.P. Morgan Securities (China) Company Limited（Other）

AI summary card

Hong Kong life insurance remained strong in 4Q25, and 2025 growth was no accident

JPMorgan believes the Hong Kong life insurance industry demonstrated a solid demand foundation in 2025 with full-year APE of HK$185B and 34% growth in in-force premium; while short-term MCV demand may normalize, the medium-term virtuous cycle still supports China Life-H and Ping An-H.

Covered names include AIA Group Ltd 1299.HK, China Life-H 2628.HK, FWD Group Holdings 1828.HK, and Ping An-H 2318.HK, all disclosed with OW ratings; the report relatively prefers 2628.HK and 2318.HK.
Hong Kong insuranceLife insurance APEMainland China visitorsBroker channelIn-force premiumCSMChina Life-HPing An-H
  • Hong Kong life insurance full-year APE reached HK$184.8B in 2025, up 38% YoY; 4Q25 APE was HK$35.3B, up 21% YoY.
  • The broker channel still accounted for 32% of APE in 4Q25, up 3 percentage points YoY, indicating demand held up better than market concerns ahead of commission regulation.
  • The report expects that even after tighter commission and product regulation, the market can still sustain around 10% annual healthy premium growth once fully normalized.
  • In-force premium grew 34% YoY in 2025, which the report believes will drive positive feedback among CSM balance, core earnings, DPS, and embedded value returns.
  • Heading into the 1Q26 earnings season, the risk of weak net profit for Chinese life insurers has been largely priced in, and the report prefers China Life-H and Ping An-H.

Report interpretation

Overview

This report focuses on the 4Q25 and 2025 sales performance of the Hong Kong life insurance industry. Full-year APE for Hong Kong life insurance reached about HK$185B in 2025, up 38% YoY, while 4Q25 APE reached HK$35B, up 21% YoY, indicating that the strong full-year growth was not caused by a single quarter or short-term disruptions. The report believes that although the Hong Kong Insurance Authority lowered upfront sales commissions starting in January 2026 and issued related practice guidance in July 2025, the underlying market demand remains resilient. In the short term, mainland China visitor-related sales may normalize as the pull-forward effect fades, but long-term demand is still expected to continue to be released through the agent channel.

Core views

The core views include three points. First, industry growth is not excessive, and tighter regulation is mainly aimed at enhancing customer protection, so it should not be simply interpreted as suppressing industry demand. Second, customer demand still exists: demand from new immigrants, top-ups by existing policyholders, and family offices among Hong Kong local customers, as well as demand from mainland China visitors for foreign-currency policies, higher yields, and offshore medical coverage, continue to support large-ticket and single-premium policies. Third, rapid growth in in-force premium may drive growth in CSM, core earnings, and DPS, forming a virtuous operating cycle for insurers. The report expects AIA's OPAT and total underlying free surplus generation growth to rise from around 10% currently to 14% by 2028.

Analysis framework

The report uses quarterly industry APE, currency mix, product mix, channel mix, and in-force premium trends as key evidence, and combines these with commission regulation, product standards, changes in public disclosure rules, and the valuation and earnings expectations of major listed life insurers. At the investment recommendation level, the report combines improving industry fundamentals with individual stock valuations, 1Q26E new business value growth, FY26E P/E, and dividend yield, reaching a conclusion that relatively favors China Life-H and Ping An-H.

Methodology notes

  • Industry growth analysisAPE trend analysis

    annualized premium equivalent

    Measures the sales strength of life insurance new business through quarterly and full-year APE. The report shows that Hong Kong's life insurance market had 2025 APE of HK$184.8B, up 38% YoY, and 4Q25 growth of 21% YoY.

  • Insurance operations analysisVirtuous cycle of in-force premium and CSM

    in-force premium, contractual service margin, core earnings, DPS

    Growth in in-force premium can drive expansion in CSM balance, acceleration in core earnings, and higher dividends per share, further supporting higher potential embedded value returns.

  • Channel analysisBroker channel and agent channel transition

    broker channel and agent channel transition

    The report believes concerns over the impact of commission adjustments on the broker channel may be excessive; after the short-term pull-forward effect fades, demand is expected to be gradually absorbed by the agent channel.

  • Valuation comparisonRelative preference framework

    growth, valuation and dividend yield comparison

    Based on 1Q26E new business value growth, 4-6x FY26E P/E, and dividend yields above 4%, the report believes China Life-H and Ping An-H are more attractive than Hong Kong-listed peers.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

  • AIA Group Ltd 1299.HK
    A major participant in Hong Kong life insurance, with strong growth in both 2025 APE and in-force premium.
    Strengths
    2025 APE grew 28% YoY and in-force premium grew 33% YoY; the report expects OPAT and total underlying free surplus generation growth to reach 14% by 2028.
    Weaknesses
    Valuation may not be as inexpensive as Chinese life insurer H-share peers, and in the short term it is affected by MCV normalization and commission adjustments.
    Comparison
    The report prefers China Life-H and Ping An-H over AIA/FWD, though AIA remains covered with an OW rating.
    Risks
    Regulatory adjustments, broker channel disruption, a pullback in MCV demand, and market skepticism about the sustainability of high growth.
  • China Life Insurance-H 2628.HK
    One of the Chinese life insurer H-shares relatively preferred by the report.
    Strengths
    The report is positive on its growth momentum, noting that Chinese life insurers' 1Q26E new business value growth may exceed 20%, with valuation at about 4-6x FY26E P/E and dividend yields above 4%.
    Weaknesses
    Hong Kong APE in 4Q25 was down 9% YoY and 57% QoQ, showing significant short-term sales volatility.
    Comparison
    More favored by the report than AIA and FWD, mainly due to a more attractive combination of growth, valuation, and dividends.
    Risks
    1Q26 net profit may be soft, and Hong Kong sales are affected by channel changes and MCV normalization.
  • Ping An Insurance Group-H 2318.HK
    One of the Chinese life insurer H-shares relatively preferred by the report.
    Strengths
    Valuation is not high, dividend yield is above 4%, and the report believes 1Q26E new business value growth momentum is strong.
    Weaknesses
    The body of the report provides limited disclosure on its Hong Kong market operating data, and the investment thesis comes more from comparisons within the Chinese life insurance sector.
    Comparison
    Together with China Life-H, it is among the report's preferred H-share insurance names, ahead of AIA/FWD.
    Risks
    Short-term pressure on net profit, market volatility, and the impact of interest rates and capital market performance on insurance profits.
  • FWD Group Holdings 1828.HK
    A participant in Hong Kong life insurance and a covered stock.
    Strengths
    2025 APE grew 42% YoY and in-force premium grew 51% YoY, indicating fast growth.
    Weaknesses
    4Q25 APE was down 28% YoY and 41% QoQ, showing high quarterly volatility.
    Comparison
    Although covered with an OW rating, the report relatively prefers China Life-H and Ping An-H.
    Risks
    High growth base, channel transition, and risks around valuation and earnings delivery.
  • Hong Kong life insurance industry
    The subject of the report.
    Strengths
    2025 APE grew 38% YoY and in-force premium grew 34% YoY; both local customer demand and MCV demand have structural support.
    Weaknesses
    Sales may normalize in early 2026, especially MCV demand after the earlier pull-forward effect fades.
    Comparison
    The report believes industry growth is not excessive, with implied APE CAGR of about 8.3% since 2017, indicating relatively healthy growth.
    Risks
    Tighter regulation, commission cuts, higher product standards, stronger public disclosure requirements, and broker channel disruption.

Key data

  • 2025 Hong Kong life insurance market APEHK$184.753B, YoY +38%Table 1 shows Market Total 2025 APE of HK$184,753 million.
  • 4Q25 Hong Kong life insurance market APEHK$35.327B, YoY +21%, QoQ -30%Sales remained strong in 4Q25, but declined versus 3Q25 due to normal seasonality or a post-pull-forward correction.
  • 2025 in-force premiumHK$662.813B, YoY +34%Table 4 shows total market in-force premium of HK$662,813 million for 12M25.
  • AIA 2025 APEHK$22.842B, YoY +28%AIA 4Q25 APE was HK$5.695B, YoY +16%.
  • Prudential 2025 APEHK$16.349B, YoY +8%4Q25 APE was HK$4.141B, broadly flat YoY.
  • AXA 2025 APEHK$11.007B, YoY +126%4Q25 APE was YoY +80%, but QoQ -41%.
  • China Life 2025 APEHK$12.624B, YoY +41%4Q25 APE was HK$1.449B, YoY -9%.
  • FWD 2025 APEHK$7.852B, YoY +42%4Q25 APE was YoY -28%, QoQ -41%.
  • Broker channel share32% of APE in 4Q25, YoY +3 percentage pointsThe report states that the broker channel remained resilient ahead of the commission cut.
  • Single-premium shareSingle-premium accounted for 52% of first-year premium, YoY +6 percentage pointsIndicates that demand for large-ticket and one-off premium policies remains strong.
  • Average MCV ticket sizeabout US$20KAIA FY25 disclosure shows the average ticket size is below the US$50K annual remittance limit, and the report believes there is still room for penetration.
  • Valuation and yieldChinese life insurer H-shares at about 4-6x FY26E P/E, with dividend yields above 4%Used to support the relative preference for China Life-H and Ping An-H.

Impact & implications

For investors, the report's message is that market concerns about commission regulation, broker channel disruption, and weak 1Q26 net profit may already be largely priced in, while structural support for Hong Kong life insurance demand remains in place. If growth in in-force premium continues to translate into CSM, core earnings, and dividend growth, valuation re-rating in insurance stocks may have fundamental support. The report prefers China Life-H and Ping An-H because of stronger growth momentum, undemanding valuations, and higher dividend yields.

Risks

  • After commission cuts, broker channel sales may slow more noticeably than expected.
  • Demand from mainland China visitors may normalize in the short term after the pull-forward effect fades.
  • 1Q26 net profit for Chinese life insurers may be soft, and if it comes in below what the market has already priced in, share prices may still be pressured.
  • Ongoing tightening in upfront commissions, product standards, and information disclosure may alter product structure and channel profit allocation.
  • Interest rates, capital markets, and exchange-rate volatility may affect insurers' embedded value, free surplus, and investment income.
  • Some visually recognized text in charts may carry a risk of mismatched company names; individual stock target prices should be based on the main text disclosures and chart titles.

What to watch

  • Whether 1Q26 new business value growth for Chinese life insurers reaches above 20%.
  • Whether the broker channel's APE share declines significantly after commission adjustments, and whether the agent channel can absorb demand.
  • Average ticket size of the MCV customer segment, regular premium share, and penetration outside the Greater Bay Area.
  • Whether annual healthy premium growth in the Hong Kong life insurance market can remain around 10% after normalization.
  • Whether growth in in-force premium continues to flow through to CSM balance, core earnings, DPS, and EV returns.
  • Quarterly APE and changes in currency, product, and channel mix for AIA, China Life, FWD, and other major insurers.
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