Traditional insurance contributes half of the premium revenue. When will dividend insurance finally "rise to prominence"?

Participating life insurance (endowment-type insurance) has been the “darling” of the market in recent years. Its “fixed + floating” mechanism design not only helps reduce insurers’ rigid cost burden, but also allows policyholders to share in the company’s operating results—making it one of the priority products that insurance companies across the board focus on developing.

Recently, at earnings press conferences of the five major listed insurers (China Life, Ping An, China Taiping, PICC, and New China Life), management teams disclosed that aggressively developing participating life insurance has become a common choice among leading listed life insurers. However, based on the information on operating products in 2025, non-participating whole-life insurance and endowment insurance—traditional products—still remain the biggest contributors, largely due to their massive renewal premium base. They firmly occupy the top spot in premium income.

However, driven by both regulatory guidance and insurers’ active transformation, participating life insurance is undoubtedly moving from the supporting role toward the center stage. How far is it from taking the “top chair” among life insurance products?

Strategic end: insurers push business transformation

In 2025, the persistently low interest-rate environment continued to squeeze insurers’ profit margins, and interest-rate spread loss risk has become the sword of Damocles hanging over the industry.

Against this backdrop, participating life insurance, with its design of “guaranteed base returns + floating participating dividends,” can both reduce insurers’ rigid liability costs and match customers’ asset growth needs through floating returns—making it a common choice among most insurers, and the leading top five listed insurers are no exception.

Looking at annual reports of listed insurers, “participating life insurance” and “floating-return-type products” have become key keywords. In China Life’s 2025 annual report, it mentioned that the transformation to floating-return business has achieved remarkable results. The rigid cost of new business liabilities has steadily decreased for three consecutive years. In 2025, participating life insurance accounted for nearly 60% of first-year single premium in individual insurance, becoming an important support for new business premiums.

Financial reports show that last year, Ping An’s participating life insurance premium volume reached RMB 91.89B, up 41.28% year over year. China Taiping’s professional life insurance subsidiary—Taiping Life—saw the proportion of participating life insurance within first-year premiums paid during the policy sales period rise to more than half, and in the agency channel this proportion for first-year premiums paid reached 61.4%. New China Life launched a comprehensive participating life insurance transformation, achieving first-year premium of RMB 11.93B for participating life insurance in long-term insurance, with a substantial breakthrough in product transformation.

“In 2025, the company firmly pushed forward the participating life insurance transformation efforts. This was mainly reflected in a breakthrough in sales, with participating life insurance sales reaching RMB 12 billion for the full year.” At the earnings press conference, New China Life’s president Gong Xingfeng said that New China Life began to intensify transformation efforts starting in the second and third quarters of 2025, and also achieved the expected results. In 2026, it will continue to deepen transformation work, with a focus on broadening product categories—for example, increasing the sales of participating life insurance annuities and capturing policy tailwinds for participating life insurance and health insurance.

Earlier, when Ping An’s deputy general manager and Chief Financial Officer Fu Xin was interviewed by reporters from the “Economic Daily News,” she also said that in 2025, the participating life insurance business share in the individual insurance channel was about 30%. In 2026, the company will make participating life insurance a core promoted product throughout the year, and the related business share is expected to further rise.

In fact, one of the purposes for insurers to actively transform toward participating life insurance is to reduce interest-rate spread loss risk.

Fu Xin said that increasing investment in participating life insurance is an inevitable choice for insurers to adapt to the current low interest-rate market environment. From the customer perspective, participating life insurance allows policyholders to share in the insurance company’s excess investment returns; in a period when interest rates are falling, the competitive advantage of such products becomes increasingly prominent. From the insurer’s operational perspective, focusing on participating life insurance can effectively hedge the risk of interest-rate fluctuations, optimize the structure of liability costs, and at the same time, the participating life insurance funds provide more flexible space for allocating equity-type assets, helping the company achieve long-term steady investment returns.

Structural end: traditional insurance “solid foundation”

Although the new business market is being quickly penetrated by participating life insurance, based on the structure of total premium income (new business + renewal business), non-participating traditional insurance is still the “keystone” for the five major insurers.

The “Economic Daily News” learned that this apparent contrast is mainly driven by the renewal premium base effect. After decades of development, traditional insurance has accumulated an enormous stock of in-force policies. Every year, the renewal premium scale is huge. By contrast, participating life insurance only restarted rapid growth in recent years, so its stock base is relatively smaller.

Specifically, in 2025, Taiping Life’s traditional insurance premium volume was RMB 187.52B, accounting for 63.38% of the company’s premium volume. Ping An’s traditional life insurance premium volume reached RMB 231.11B, while its annuity insurance business premium volume reached RMB 108.16B; together, the combined share was 51.29%. New China Life’s premium income from traditional insurance (original insurance premium income) was RMB 106.69 billion, accounting for 54.47%. PICC’s nationwide life insurance company under PICC—PICC Life—recorded original insurance premium income from ordinary-type life insurance of RMB 92.9B, accounting for 73.7%.

In addition, in 2025, the top life insurance products by premium income among the five insurers were all traditional insurance products, and the products ranked in the top five by premium income were also basically traditional-type insurance products. Specifically, among the products with the highest premium income: China Life’s was Guoshou Xinxiang Future Endowment Insurance, with total premiums of RMB 37.04B. Ping An Life’s was Ping An Shenshi Jinyue (Enjoyance Version) Whole Life Insurance, with total premiums of RMB 29.8B. Taiping Life’s was Changxiangban (Chuan Shi Version) Whole Life Insurance, with total premiums of RMB 17.18B. New China Life’s was Fushengshijia Whole Life Insurance, with total premiums of RMB 18.18B. PICC Life’s was PICC Life Ruyi Fu Endowment Insurance, with total premiums of RMB 15.3B.

“Why traditional insurance can continuously maintain and solidify its leading market position is fundamentally that, during periods when interest rates are falling, the high resonance between customers’ hedging demand for deterministic returns and insurers’ operating strategy to prevent interest-rate spread losses forms a high level of alignment.” Yang Fan, general manager of Beijing Paipaiwang Insurance Brokerage Co., Ltd., told reporters from the “Economic Daily News.” Under the current macroeconomic environment, customers’ risk appetite has declined, and they are more inclined to lock in so-called guaranteed-return products over the long term; traditional insurance’s determinism perfectly meets this demand. At the same time, although insurers face transformation pressure, the long-term sales inertia formed on the channel side and the path dependency on high-determinacy products mean that traditional insurance still has strong stickiness on both the supply and demand sides. This is not the result of a single factor, but rather the outcome of phased balance between market choice and risk-control strategy.

Looking ahead: reshaping channel core competitiveness

In today’s environment of continued low interest rates, the rapid development of participating life insurance with a floating-return mechanism has already become a consensus in the industry.

As the first quarter of 2026 begins, this trend is continuing. In a research report, Guosen Securities pointed out that in the first quarter of 2026, participating life insurance saw a clear increase in sales heat across multiple channels, especially among middle-aged and elderly depositors and more risk-averse, steady-type investors. As a main export route for “moving money from deposits,” bank distribution channels show that the share of participating life insurance has risen significantly; some insurance companies even reported tight product quotas.

But in terms of total business scale, participating life insurance still needs some time to surpass non-participating traditional insurance.

“The main bottlenecks for ramping up participating life insurance now lie in the lag in customer recognition on the demand side and insufficient professional service capabilities on the supply side; the two are mutually causal.” Yang Fan told reporters from the “Economic Daily News.” From the demand side, customers have long been influenced by a “guaranteed returns” way of thinking and have a mismatch in understanding of the “non-guaranteed” portion of participating life insurance. In addition, recent volatility in dividend realization rates has further intensified wait-and-see sentiment. From the supply side, the sales team is in a period of transformation pain and still lacks the professional ability to shift from simply promoting “fixed returns” to explaining the “investment logic,” making it difficult to effectively guide customers’ expectations. This results in a structural disconnect between supply and demand.

In Yang Fan’s view, for participating life insurance to replace traditional insurance as the “top pick,” it will roughly still take a gradual replacement cycle of three to five years, rather than a fast switch driven by policy. This process will naturally evolve alongside dynamic adjustments to the assumed interest rate. As traditional insurance’s pricing advantage weakens with falling interest rates, participating life insurance will demonstrate advantages in surviving interest-rate volatility over a long cycle. The market will gradually complete the shift from “fixed-income thinking” to “equity thinking.” This requires time to build market trust and validate investment capability, and it cannot be done overnight.

In addition, during the rapid promotion of participating life insurance, insurance institutions must completely reshape their channel core competitiveness—transforming from a single focus on “product promotion” to becoming “asset allocation advisors.” Institutions should reverse the operating orientation that emphasizes scale over value. Strategically, they should establish an evaluation mechanism oriented toward long-term investment capability and dividend realization rates, and improve product transparency. On the channel side, they need to provide empowerment through high-intensity training so that agents have the professional literacy to explain the macro environment and complex products. By providing wealth management services across the full life cycle, they can offset the decline in product certainty and win market trust with professional value.