FINANCE

China Tightens Long-Term Performance Metrics to Channel Insurance Funds into Markets

Published: Jul. 12, 2025 3:43 a.m. GMT+8

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The Ministry of Finance issues a Notice on Strengthening Long-Term Performance Assessments to Guide Insurance Capital Toward Long-Term, Prudent Investment on July 11. 2025.

China’s Ministry of Finance has unveiled new performance assessment rules for state-owned insurance companies, aiming to channel more long-term insurance capital into equity markets and reinforce the sector’s role as an economic stabilizer.

On Friday, the ministry issued a notice to major insurers — including the People’s Insurance Company of China, China Life Insurance Co. Ltd., China Taiping Insurance Holdings Co. Ltd. and China Reinsurance Group Corp.— as well as local financial regulators. The document increases the emphasis on long-term indicators in key financial performance metrics, starting with the 2025 evaluation cycle.

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China’s Ministry of Finance issued new performance assessment rules for state-owned insurers, emphasizing long-term investment in equity markets starting from 2025.
Financial metrics now use weighted averages: one-year (30%), three-year (50%), and five-year (20%) performance for ROE and capital preservation, with long-term metrics comprising 70%.
Insurers are required to adopt value-oriented, long-term strategies, enhance asset-liability management, and strengthen internal controls for greater market stability.

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Who’s Who

People’s Insurance Company of China: The People’s Insurance Company of China is one of several major insurers in China. It is state-owned and subject to new performance rules from the Ministry of Finance. These rules, effective from the 2025 evaluation cycle, increase the emphasis on long-term indicators for financial performance.

China Life Insurance Co. Ltd.: China Life Insurance Co. Ltd. is a major state-owned insurer in China. It is named in the Ministry of Finance's new performance assessment rules for state-owned insurance companies, which aim to direct more long-term insurance capital into equity markets. The company's performance will be evaluated based on new metrics emphasizing long-term returns.

China Taiping Insurance Holdings Co. Ltd.: China Taiping Insurance Holdings Co. Ltd. is one of the major insurers in China. The Ministry of Finance's new assessment rules, effective from the 2025 evaluation cycle, will impact their performance metrics, emphasizing long-term return on equity and capital preservation, encouraging more long-term capital into equity markets.

China Reinsurance Group Corp.: China Reinsurance Group Corp. is one of the major state-owned insurance companies in China. It is subject to new performance assessment rules issued by China's Ministry of Finance. These rules aim to encourage long-term insurance capital investment into equity markets and strengthen the economic role of state-owned insurers.

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What Happened When

October 2023：: China’s Ministry of Finance adjusted ROE assessments for state-owned insurers from a one-year focus to a blended model combining annual and three-year averages, each weighted at 50%.

January 2025：: Six government agencies jointly issued a plan to boost institutional investment, accelerating the drive to channel long-term insurance funds into capital markets. Vice Finance Minister Liao Min announced plans to revise insurer performance metrics to support long-cycle investing.

Friday, July 11, 2025：: The Ministry of Finance issued a notice to major state-owned insurers and local financial regulators, introducing new performance assessment rules with a focus on long-term indicators, effective starting with the 2025 evaluation cycle.

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