China Post Life Insurance 2025: A life-and-death race about "capital filling the pit"

In early spring 2026, the annual report season for bank-affiliated insurance companies is heavier than in previous years.

As the leader among bank-affiliated insurance companies, China Post Life Insurance conveyed a set of compelling data to the market through its solvency report for the fourth quarter of 2025:

The annual insurance business revenue reached 159.166 billion yuan, with a year-on-year growth of 18.0%, continuing to lead bank-affiliated insurance companies;

Net profit reached 8.345 billion yuan, a year-on-year decline of 9.2%, still maintaining a leading advantage among non-listed insurance companies.

In contrast to the impressive profit statement, there is a significant consumption of capital that is noticeably higher than the replenishment rate.

Xinfeng noted that although China Post Life Insurance received multiple capital injections in 2025, its actual capital continued to decline.

Through the solvency report, under the long cycle of low interest rates and the strict rules of strong regulation, this hundred-billion insurance company is undergoing a difficult transformation:

As the valuation fluctuations on the asset side resemble tides, and the costs on the liability side are as rigid as rocks, China Post Life Insurance, caught in between, must complete a fundamental shift in its survival logic.

"Thin Assets"

Changes in assets and liabilities can sometimes be more honest than profit statements.

In China Post Life Insurance's solvency report, a set of core data showed a divergence:

At the end of 2025, the actual capital was 62.642 billion yuan, a decrease of over 20 billion yuan compared to the end of 2024, with a decline rate of 25.6%.

For life insurance companies, actual capital is the true foundation for measuring their risk resistance capability and future expansion space. Against the backdrop of recording over 8 billion yuan in net profit for the year, the retreat of actual capital at the hundred-billion level is unusual.

Breaking it down, the capital flow changes for China Post Life Insurance in 2025 exhibited a typical "inflows do not cover outflows" characteristic.

Inflows are high-intensity external blood transfusions.

In 2025, China Post Life Insurance completed a capital change in June, receiving nearly 4 billion yuan from its two major shareholders, China Post Group and AIA, increasing its registered capital from 28.663 billion yuan to 32.643 billion yuan;

In the second half of the year, the company continued to utilize the interbank bond market to supplement capital, intensively issuing two perpetual capital bonds from November to December, with a total financing scale of 4.1 billion yuan.

Counting only the visible external capital inflows, China Post Life Insurance obtained nearly 8 billion yuan in incremental capital for the year.

However, in reality, both the external blood transfusion and internal profit injections failed to reverse the downward trend of China Post Life Insurance's actual capital, as the inflowing funds did not remain on the books for long and were quickly offset by capital outflows.

Outflows are rigid redemptions and asset valuation "reefs" under bond market fluctuations.

At the end of 2025, China Post Life Insurance exercised its redemption rights and fully redeemed 6 billion yuan of maturing capital supplement bonds, which led to a reduction in recognized assets that exceeded the adjustment of recognized liabilities, causing the solvency adequacy ratio to drop directly by 14.7 percentage points for that quarter.

However, against the backdrop of continuously declining coupon rates for new bonds, "redeeming old and issuing new" is still beneficial for optimizing the asset-liability structure.

Deeper impacts come from the shrinkage of assets on the investment side China Post Life Insurance revealed that, based on the long-term stable orientation of its investment portfolio, the company has invested a certain proportion of long-term bonds as strategic assets.

In the "bond bull market" of 2024, the fair value of the bonds held by China Post Life Insurance surged significantly, with a comprehensive investment return rate reaching 11.04%, accumulating substantial floating profits; however, entering 2025, the yield curve of the bond market shifted upward, and bond prices generally adjusted, causing the company's comprehensive investment return rate to drop to 0.74%.

China Post Life Insurance has switched to the new financial instrument standard (IFRS 9), and such assets may be accounted for in the FVOCI (measured at fair value with changes recognized in other comprehensive income) account, where price fluctuations do not impact profits but are reflected in equity.

This has also led to the fact that fluctuations in the bond market have not affected the profit and loss statement of China Post Life Insurance, but the accumulated floating profits have been largely given back.

China Post Life Insurance stated that after excluding the fair value changes of such assets, the company's annual comprehensive investment return rate is 3.91%, "which better reflects the company's asset-liability management strategic intent and is more meaningful for assessment."

As of the end of 2025, the core solvency adequacy ratio of China Post Life Insurance has dropped to 92.19%. Although it is still within the regulatory safety zone, the buffer from the regulatory red line has been significantly compressed.

Insurance Banking "Falling Behind"

If the fluctuations at the capital level are financial results, the slowdown at the business level is a deeper operational ailment.

For a long time, relying on the extensive urban and rural network of Postal Savings Bank, China Post Life Insurance has built a highly penetrating insurance banking sales network. However, in the deep water of industry transformation, the side effects of channel dependency have begun to emerge.

First is the pain of rate reform.

From 2024 to 2025, the reform of the profit distribution mechanism between banks and insurance companies continues to deepen, with the "integration of reporting and operation" policy strictly reducing the commission rates of insurance banking channels, and the removal of the "one-to-three" (one bank outlet serving three insurance companies) restriction has intensified market competition in the insurance banking channel.

The impact of the reform on bank-affiliated insurance companies has yet to be digested.

Industry communication data shows that in 2025, the new business premium growth rate of the top seven life insurance companies (China Life, Ping An, Taikang, New China, Taiping, PICC, and TaiKang) through insurance banking channels reached 48%, while the growth rate for bank-affiliated insurance companies was -7%;

Among them, as the "leader" of bank-affiliated insurance companies, China Post Life Insurance's first-year premium through insurance banking channels has declined by 27% year-on-year.

Long Ge, co-founder of Zhongtuobang and founder and CEO of Banghuibao, pointed out that the weakness of bank-affiliated insurance companies in the insurance banking channel is due to two reasons: first, the significant decrease in commissions in the insurance banking channel has weakened sales enthusiasm; second, leading insurance companies have entered the market with brand and service advantages, further leading to business diversion.

When the rate dividend is wiped out, the competitiveness of the product itself and the service system become the key to transactions.

Long Ge pointed out that bank-affiliated insurance companies still generally face issues such as excessive reliance on parent bank channels, a single product structure, and the new accounting standards amplifying the impact of interest rate fluctuations, "this is the pain of the industry transitioning from extensive growth to high-quality transformation, prompting some companies to shift to higher-value businesses."

Second is the liquidity pressure from hundreds of billions in policy surrenders In the fourth quarter of 2025, the comprehensive surrender rate of China Post Life Insurance rose to 2.16%.

The main savings-type products sold earlier have become the focal point for surrenders, with the "China Post Preferred Life Pension Annuity Insurance" accumulating a surrender scale of 5.296 billion yuan, resulting in a surrender rate as high as 16.26%.

This also indicates that, amid market fluctuations, customers' patience with long-term savings-type products is gradually waning.

In a low-interest-rate environment, customers' preference for asset liquidity is increasing, and the emergence of some higher-yielding short-term financial alternatives may also lead to the replacement of existing policies.

In addition, the incremental growth of bank-affiliated insurance companies in recent years has also stemmed from "quick return" medium and short-term businesses.

Due to the overlap in customer profiles between bank insurance channels and bank wealth management, when early policies reach their cash value peak, the lack of effective product stickiness and service retention may also trigger a concentrated exit by customers.

All of the above not only tests the company's cash flow management but also imperceptibly erodes the hard-won capital surplus.

"Actuarial Governance" and Strategic Turnaround

Faced with the dual pressures of tightening capital constraints and sluggish business growth, China Post Life Insurance did not choose to wait and see in 2025 but instead initiated a deep adjustment involving personnel structure and product strategy.

First, personnel changes, with actuaries taking the forefront.

In June 2025, China Post Life Insurance announced personnel appointments, with Chief Actuary Jiao Feng approved to serve as the company's financial head.

In the insurance industry, it is not common for the Chief Actuary to also serve as the Chief Financial Officer (CFO); this personnel arrangement reflects a logical shift in corporate governance from accounting to actuarial management.

A non-bank analyst from a brokerage pointed out that as interest spread loss risks become a focal point of industry concern, the board's decision to appoint executives with actuarial backgrounds to oversee financial authority aims to strengthen the governance of the balance sheet.

This means that every new business initiative must not only consider premium scale but also undergo capital consumption testing through actuarial models.

The analyst stated, "The change in accounting methods somewhat indicates that China Post Life Insurance is attempting to restore the endogenous motivation for capital adequacy."

Meanwhile, former Chief Risk Officer Liu Jincheng has been reassigned as the board secretary.

This adjustment brings the voice of the risk control line into the board's decision-making level, demonstrating the company's heightened vigilance regarding compliance while promoting business transformation.

The changes in management all send a clear signal: China Post Life Insurance is attempting to break away from the past sales-driven inertia and shift towards a more stable, value-centric operational path.

Second, strategic shift towards promoting dividend insurance as a necessary path.

On the product side, China Post Life Insurance has executed a tactical move from fixed to floating.

In recent years, products like increasing amount whole life insurance have been the mainstay of bank insurance channels, as these products promise rigid repayment to customers, which occupies a high amount of the insurance company's capital.

Data from 2025 shows a significant increase in the proportion of premium scale for dividend insurance at China Post Life Insurance.

The core logic behind vigorously promoting dividend insurance lies in introducing a risk-sharing mechanism. When investment returns fluctuate, the insurance company can adjust the dividend levels to transfer some investment risks to customers, thereby reducing its rigid liability costs and minimizing the consumption of core capital Although this transformation may lead to fluctuations in premium scale in the short term due to customer acceptance issues, in the long run, it is an inevitable path to alleviate interest margin losses and optimize capital structure.

For China Post Life Insurance, 2025 is a period of intense friction in the transition from old to new momentum.

The fluctuations in actual capital accounting, the slowdown in the growth of bancassurance channels, and the pressure of policy surrenders from existing businesses are products of the industry's downward cycle combined with the company's proactive transformation. Meanwhile, bank-affiliated insurance companies, accustomed to relying on the resources of their parent bank's outlets to "collect grain," must also adapt to the new era of "hard competition."

In this competition concerning capital and survival, every turn of China Post Life Insurance, as the "leader" among bank-affiliated insurance companies, is defining the true level of bank-affiliated insurance companies in the second half