New China Life Insurance's 2025 net profit increases by 38.3% year-on-year; President Gong Xingfeng: The transformation of dividend insurance has already opened up the situation.

Ask AI · How should dividend insurance transformation respond to the challenges of a low-interest-rate environment?

By Feng Biao

Edited by Liu Peng

On March 30, Xinhua Life Insurance held its 2025 performance briefing.

In operating performance, Xinhua Life achieved operating revenue of about CNY 157.8 billion, up 19% year over year. Net profit attributable to the parent company was CNY 36.28B, up 38.3% year over year. Shareholders’ equity attributable to shareholders of the parent company reached CNY 111.5 billion, up 15.9%.

In terms of premium income, in 2025, Xinhua Life’s original insurance premium income was nearly CNY 195.9 billion, up 14.9%. Of this, first-year premiums for long-term policies were CNY 57.78 billion, up 48.9%; first-year single premiums for long-term policies payable were CNY 37.2 billion, up 36.7%; renewal premiums were CNY 134.17 billion.

In addition, the proportion of dividend insurance in Xinhua Life’s overall business for regular premium payment has increased quarter by quarter, reaching 77% in the fourth quarter. The personal life insurance business’s 25-month continuation ratio continued to improve, rising by 7.1 percentage points year over year. New business value exceeded CNY 9.8 billion, up 57.4%.

In recent years, Xinhua Life has been pushing its transition toward dividend insurance business. At the briefing, Xinhua Life’s president, Gong Xingfeng, said that the 2025 dividend insurance transformation has been successfully opened into a good momentum, mainly reflected in breakthroughs at the sales level.

Gong Xingfeng said that, as an important product type that allows customers to share in the company’s development results, the dividend insurance product’s value rate is slightly lower than that of traditional insurance, which poses certain challenges for growth in new business value and value rate. However, Xinhua Life has a clear understanding, full preparation, and concrete actions in place. It has also implemented a series of work initiatives to effectively promote the continuous and stable growth of new business value. In 2026, Xinhua Life will seize policy dividends in dividend-oriented health insurance, strengthen product suitability management, adhere to selling the right products to the right customers, and resolutely avoid sales misguidance.

On the investment side, Xinhua Life’s total investment return for 2025 was about CNY 104.3 billion for the full year, up 30.9% year over year. The total investment yield reached 6.6%, up 0.8 percentage points year over year.

Regarding investment performance, at the briefing, Xinhua Life’s chairman, Yang Yucheng, said that the low-interest-rate environment is the company’s primary challenge at present. Currently, the yield on the 10-year government bonds remains at a low level. The financial investment attributes of areas such as non-standard investments, alternative investments, and real estate have been significantly weakened. After a large amount of premiums flows in, how to convert premiums into long-term returns that can weather the cycle, beat volatility, and deliver them to customers places higher demands on insurers’ operating capabilities and investment capabilities.

Xinhua Life’s deputy general manager, Qin Hongbo, said that Xinhua Life’s main investment lines have three aspects: first, focusing on industries with strong cyclical momentum and continuous performance improvement; second, investing in industries that align with national strategic directions, especially sectors related to new-quality productive forces; and third, continuously promoting a high-dividend investment strategy in the low-interest-rate environment.

For the interest rate outlook in 2026, Qin Hongbo believes that in the short term, the interest rate market will show a choppy pattern. The credit spread will narrow, and the term spread will widen. Liquidity for short-maturity funds will be relatively loose, offering greater certainty. However, volatility in ultra-long-term bonds will increase, and the interest rate trends for both long and short ends will diverge. In the low-interest-rate era, achieving reasonable returns from fixed-income investments hinges on capturing interest rate trends and structural opportunities.

Finally, regarding solvency, in 2025, Xinhua Life’s core solvency adequacy ratio was 135.11%, and its comprehensive solvency adequacy ratio was 210.47%. In response to the company’s solvency pressure and the issue of maintaining adequate solvency, Xinhua Life’s assistant to the president and board secretary Liu Zhiyong said that currently the company’s solvency is sufficient and above regulatory requirements. However, due to the objective pressure caused by the sustained downward shift of the 750-day moving-average government bond yield curve, the company’s solvency adequacy ratio has faced periodical pressure.

In maintaining solvency, Liu Zhiyong said that Xinhua Life mainly takes three major measures: first, strengthen endogenous capital replenishment by accelerating the transformation of dividend insurance business, focusing on value creation. Through refined expense control and operational efficiency improvements, the company will continue to enhance its comprehensive profitability and strengthen the foundation of internal capital accumulation; second, actively expand external capital replenishment channels and promote the implementation of measures such as issuing perpetual bond capital instruments with no fixed term; and third, further optimize the asset allocation structure to maintain a balance between asset returns and the demand for risk capital.