Annual Report Observation | Traditional insurance contributes half of the premiums; when will dividend insurance rise to prominence? Industry insiders: It will take another three to five years of gradual replacement cycle.

Everyday Business News reporter | Yuan Yuan    Everyday Business News editor | Liao Dan

Dividend insurance has been a “darling” in the market in recent years. Its “guaranteed + variable” mechanism design can both reduce insurers’ fixed cost burdens and allow customers to share in the company’s operating results, thereby making it one of the key products that insurance companies focus on developing.

Recently, at the earnings briefings of the five listed insurance companies, management teams also disclosed that vigorously developing dividend insurance has become a common choice among leading listed life insurers. However, based on product information from 2025 operations, non-dividend whole-life insurance and endowment-type traditional insurance products still remain the biggest contributors. Relying on their large base of renewal premiums, they firmly occupy the number one position in premium income.

However, under the dual driving forces of regulatory guidance and insurers’ proactive transformation, dividend insurance is undoubtedly moving from a supporting role to center stage. How far is it from taking the “top chair” in the life insurance sector?

Strategic side: Dividend insurance becomes a “must-answer question,” as insurers push business transformation with all their strength

In 2025, the low-interest-rate environment continues to squeeze insurers’ profit space, and interest-rate spread loss risk has become a “Sword of Damocles” hanging over the industry. Against this backdrop, dividend insurance—thanks to its “guaranteed returns + variable dividends” design—can not only reduce insurers’ fixed liability cost burdens, but also match customers’ asset growth needs through variable returns. Therefore, it has become a common choice among most insurers, and the top five listed insurers are no exception.

Based on annual reports, “dividend insurance” and “variable return products” have become keywords. In its annual report, China Life mentioned that the transformation to variable return business has been notably effective. The rigidity of new business liability costs has decreased steadily for three consecutive years. In 2025, dividend insurance’s share of first-year single premium paid for individual insurance rose to nearly 60%, becoming an important support for new premiums.

Last year, China Ping An’s premium volume from dividend insurance reached 91.89B yuan, up 41.28% year over year. Meanwhile, in Taikang Life, the proportion of dividend insurance in premiums from new policies within the premium-paying period increased to more than half; among premiums from new policies through the agency channel, the proportion of dividend insurance reached 61.4%. New China Life comprehensively launched its dividend insurance transformation, achieving 11.93B yuan in first-year premium for dividend insurance long-term products, with a substantial breakthrough in product transformation.

“In 2025, the company firmly advanced the dividend insurance transformation work, mainly reflected in breakthroughs in sales—dividend insurance sales totaled 12 billion yuan for the full year.” At the earnings briefing, New China Life’s president Gong Xingfeng said that New China Life started to intensify its transformation efforts from the second quarter and third quarter of last year, and achieved the expected results. In 2026, it will continue to deepen the transformation work, focusing on expanding product categories—for example, increasing the sale of dividend insurance annuities and capturing policy dividends for dividend insurance and health insurance.

Previously, Fu Xin, vice president and chief financial officer of China Ping An, also said in an interview with reporters from the Everyday Economic News that in 2025, the share of dividend insurance business within the individual insurance channel was about 30%, and in 2026, the company will promote dividend insurance as the core featured product for the full year. The related business share is expected to further rise.

Reducing interest-rate spread loss risk is one of the purposes of insurers’ active transformation into dividend insurance. Fu Xin said that increasing dividend insurance business is an inevitable choice for insurers to adapt to the current low-interest-rate market environment. From the customer perspective, dividend insurance allows policyholders to share the excess investment returns of insurance companies. In periods when interest rates decline, the competitive advantage of these products becomes increasingly prominent. From the insurer’s operational perspective, focusing on dividend insurance can effectively hedge interest-rate fluctuation risks, optimize the structure of liability costs. At the same time, funds in dividend insurance have more flexible room for allocation to equity-type assets, helping companies achieve long-term stable investment returns.

Structural side: Traditional insurance has a solid “base,” and it still tops the list of main-selling products

Although new business markets are being rapidly penetrated by dividend insurance, looking at the overall premium income structure (new policies + renewal premiums), non-dividend traditional insurance products remain the insurers’ “keystone” among the five major companies. The core reason for this contrast lies in the renewal premium base effect: after decades of development, traditional insurance has accumulated a vast stock of in-force policies. Each year, renewal premium volumes are large. By contrast, dividend insurance only restarted high-growth in recent years, so its stock base is relatively smaller.

Specifically, in 2025, Taikang Life’s traditional insurance premium volume was 8B yuan, accounting for 63.38% of the company’s scale premiums. China Ping An’s traditional life insurance premium volume reached 187.52B yuan; its annuity insurance business premium volume was 231.11B yuan. Together, the two accounted for 51.29%. New China Life’s premium income from traditional insurance (original insurance premium income) was 106.69 billion yuan, accounting for 54.47%. People’s Insurance Company of China (PICC) Life’s ordinary life insurance (original insurance premium income) was 108.16B yuan, accounting for 73.7%.

In addition, last year, the insurance products with the highest premium income among the five life insurers were all traditional insurance. The top five products by premium income were also basically traditional insurance products. Specifically, among the products with the highest premium income: China Life’s Guoshou Xinxing Future Endowment Insurance had total premiums of 92.9B yuan. Ping An Life’s Ping An Shenshi Jinyue (Exclusive Version) Whole Life Insurance had total premiums of 37.04B yuan. Taikang Life’s Chang Xiang Bin (Chuan Shi Version) Whole Life Insurance had total premiums of 29.8B yuan. New China Life’s Fu Sheng Shi Jia Whole Life Insurance had total premiums of 17.18B yuan. PICC Life’s PICC Life Ruyi Fu Endowment Insurance had total premiums of 18.18B yuan.

“Traditional insurance has been able to continuously maintain its dominant position in the market. The core reason is that during the interest-rate decline cycle, customers’ risk-hedging demand for deterministic returns and insurers’ operating strategies to prevent interest-rate spread losses are highly aligned.” Yang Fan, general manager of Beijing Paipaiwang Insurance Brokerage Co., Ltd., told reporters from the Everyday Economic News. “Under the current macroeconomic environment, customers’ risk appetite has decreased, and they are more inclined to lock in long-term return ‘certainty-contract’ products. Traditional insurance’s deterministic nature precisely meets this demand. At the same time, although insurers face transformation pressure, the sales inertia formed over the long term at the channel level and the path dependence on high-certainty products have caused traditional insurance to still have strong stickiness at both supply and demand sides. This is not the result of a single factor, but a market-selected and risk-control strategy-related phase balance.”

Looking ahead: It will take 3 to 5 years for dividend insurance to become insurers’ “top pick”

With interest rates continuing to trend downward, it is a consensus among the five listed life insurers and insurers across the industry to develop dividend insurance with a variable return design mechanism.

This momentum continues into the first quarter. In a research report, Guoxin Securities mentioned that in the first quarter of 2026, dividend insurance sales heat increased noticeably across multiple channels, especially among middle-aged and elderly customers and more conservative investors. Bank distribution channels, as a major exit for “moving money from deposits,” show that the share of dividend insurance has risen significantly; in some cases, certain insurance companies have even experienced tight product额度 (allocation limits).

However, in terms of overall business scale, dividend insurance still needs some time to surpass non-dividend traditional insurance. “At present, the main bottlenecks in scaling up dividend insurance are the lag in customers’ demand-side understanding and the insufficient capability of professional services on the supply side. The two are mutually causal.” Yang Fan said. From the demand side, customers have long been influenced by a “certainty-contract” mindset, leading to a mismatch in their understanding of the non-guaranteed portion of dividend insurance. In addition, the recent volatility in dividend payout realization rates has intensified wait-and-see sentiment. From the supply side, the sales force is in a period of transformation pains and still lacks the professional ability to shift from simply promoting “fixed returns” to explaining “investment logic.” This makes it difficult to effectively guide customers’ expectations, resulting in a structural disconnect between supply and demand.

In Yang Fan’s view, for dividend insurance to replace traditional insurance as the “top pick,” it roughly still needs a 3- to 5-year “gradual substitution” period, rather than a fast switch driven by policy. This process will be accompanied by a natural evolution through dynamic adjustments of the assumed interest rate. As traditional insurance’s pricing advantage weakens with interest-rate declines, dividend insurance will demonstrate advantages in surviving interest-rate volatility over the long cycle. The market will gradually complete the shift from “fixed-income thinking” to “equity/asset thinking.” This requires time to cultivate market trust and to verify investment capability, and it cannot be done overnight.

In addition, during the rapid promotion of dividend insurance, insurance institutions must thoroughly reshape the core competitive strength of channels—transforming from a single “product promotion” model to an “asset allocation adviser” model. Institutions should reverse the operating orientation that prioritizes scale over value. Strategically, they should establish an evaluation mechanism guided by long-term investment capability and dividend payout realization rates, and improve product transparency. On the channel side, they need to equip agents through high-intensity training, giving them the professional competence to explain macro conditions and complex products. By providing wealth management services across the full life cycle, they can compensate for the decline in product deterministic certainty, and win market trust through professional value.

Cover image source: Everyday Business News Media Resource Library