Deconstructing the underlying logic of the "golden period" of insurance industry development

Recently, listed insurance companies on the A-share market have successively delivered their operational reports for 2025, with impressive data highlighting the industry’s resilience. However, in the first quarter of this year, the A-share insurance sector continued to face pressure, indicating that the market still harbors concerns about the future performance of listed insurance companies.

In fact, the insurance industry is now standing at the starting point of high-quality development. At the recent 2025 annual performance release conference, leaders from top insurers such as China Life and PICC predicted that during the 14th Five-Year Plan period, the insurance industry will enter a “golden age” of development.

I believe that these predictions are not merely the result of short-term market benefits stacking up by chance, but are based on four core underlying logics: macroeconomic conditions, market demand, policy support, and technological transformation.

Macroeconomic stability and improvement lay a solid foundation for industry development. China’s economy remains stable, resilient, and has enormous growth potential. The 14th Five-Year Plan explicitly states that high-quality economic and social development should achieve significant results during this period, laying a foundation for doubling the per capita GDP by 2035 compared to 2020 and reaching the level of moderately developed countries. The long-term steady growth of the economy not only provides a stable environment for the insurance industry but also continuously drives market demand upgrades.

Targeted policy support safeguards industry development. The 14th Five-Year Plan mentions “insurance” 27 times, integrating insurance into the core components of building a multi-layered social security system. On the investment side, regulators continue to optimize policy guidance, encouraging insurance funds to leverage their “patient capital” advantage, deeply serve the development of new productive forces, and support stable returns on insurance assets, which is conducive to high-quality industry growth.

Demand structure continues to upgrade, opening new growth space for the industry. Currently, China’s per capita GDP has exceeded $13k for three consecutive years, and residents’ wealth levels are steadily rising. However, there is still a significant gap in insurance depth, density, and coverage compared to developed countries, leaving vast room for demand release. Meanwhile, China’s aging population continues to deepen, with increasing needs for elderly care, health, and long-term nursing security. As residents’ wealth management concepts strengthen, their financial planning needs are shifting from simple savings to a dual focus on “protection + wealth appreciation.”

Technological empowerment is reshaping industry operations. Intelligent technologies, represented by artificial intelligence, are deeply penetrating the entire insurance operation process, promoting cost reduction, efficiency improvement, and business model innovation. Technology not only optimizes traditional processes such as pricing, underwriting, and claims but also expands the scope of insurance customers and insurable boundaries, driving a deep transformation from “product sales-oriented” to “risk management + comprehensive service-oriented” business models.

The “golden age” of development has arrived. The insurance industry must proactively act and precisely exert efforts to turn enormous market potential into tangible operational results.

In my view, insurance companies should first anchor themselves to national strategies, achieving resonance with the real economy. They should move beyond mere business operations, seeking development opportunities and value enhancement within the service of national strategies. It is worth noting that during the 14th Five-Year Plan, China’s modern industrial system is accelerating construction, with emerging and future industries growing rapidly, providing broad space for insurance expansion. For example, in the large-scale development of emerging industries such as aerospace and low-altitude economy, insurance can play a role in risk protection and also uncover long-term investment opportunities.

Secondly, they need to strengthen asset-liability management to build a solid foundation for prudent operation. While seizing industry opportunities, insurers must also recognize potential challenges such as the downward pressure on market interest rates and further reinforce asset-liability matching management. On the liability side, they should optimize product structures around value, strictly prevent interest spread risks; on the asset side, adhere to the “long-term investment of long-term funds” philosophy, increase allocations to equities and alternative assets, and enhance long-term return stability.

Finally, they should deepen innovation-driven development to unleash long-term growth momentum. Many insurers have already increased technological investments and explicitly proposed strategies like “All in AI” or “AI in All.” Moving forward, insurers need to deepen the integration of technology and insurance business, using AI to optimize all business processes, innovate product forms, explore service model reforms, and shift risk management from “post-claim compensation” to “prevention and mid-term reduction,” making technology a core engine for high-quality industry development.

Standing at this new starting point, looking ahead to the 14th Five-Year Plan, insurance companies can only realize a leap from “premium growth” to “value growth” by actively embracing national development strategies, strengthening asset-liability coordination, and deepening technological innovation and business integration, thereby contributing more solid financial strength to the modernization of China.