As bank deposit rates continue to decline below 2%, the insurance market is undergoing profound transformation. In Q1 2025, dividend products accounted for nearly 40% of new products launched by life insurance companies, with industry data showing that the incremental dividend insurance market is expected to exceed RMB 1.8 trillion over the next three years. Behind this shift lies the dual driving forces of accumulating interest rate spread risks during the rate-cutting cycle and consumers' upgraded demand for wealth preservation. CHINA TAIPING has delivered an impressive transformation scorecard ahead of its peers.
CHINA TAIPING's 2025 interim results show that its core subsidiary, Taiping Life, has built a product matrix centered on dividend insurance: in the first half of the year, dividend insurance accounted for 87.1% of Taiping Life's first-year regular premium income from long-term insurance, and reached 91.3% in the new single premium long-term insurance structure.
Based on the risk-sharing mechanism of "guaranteed returns plus floating dividends," dividend insurance differs from traditional life insurance's rigid fixed-income payments by having insurance companies and customers jointly bear part of the investment risk. Through actuarial techniques, the predetermined interest rate is set at a more conservative level, reducing interest rate spread risks from the source. Meanwhile, its long-term holding characteristics result in surrender rates that are over 40% lower than traditional products. Combined with the dividend smoothing reserve pool mechanism required by regulators, it can effectively buffer income volatility caused by market fluctuations.
Benefiting from the increased proportion of dividend insurance, under the premise of unchanged major economic assumptions, compared to the same period last year, the negative impact of adverse scenarios on Taiping Life's new business value in the first half of 2025 was significantly reduced from 30.5% to 5.5%, demonstrating strong risk resistance capabilities.
The transformation results stem from systematic reform measures. According to Wang Xuze, Acting Head of Taiping Life, at the earnings conference, these achievements result from CHINA TAIPING's comprehensive approach of top-down strategic anchoring, advance planning, and efficient execution.
From a strategic perspective, Taiping Life actively responded to regulatory calls to develop floating-return insurance products in the low interest rate environment. With full support and guidance from the Group and shareholder Fujie, the company clarified its dividend insurance transformation direction. Through multiple full-level meetings, specialized training, and in-depth advocacy, the company repeatedly interpreted the core significance of transformation for high-quality development, ultimately achieving high ideological unity among headquarters and branches, internal and external teams, and front and back office departments, establishing a solid cognitive foundation for transformation.
In specific deployment, the company initiated transformation work as early as the second half of 2024, forming a three-dimensional advancement system of "concept guidance + skill enhancement + policy support." On one hand, focusing on team capability building, the company transformed traditional sales concepts through case teaching and compliance interpretation, while conducting specialized dividend insurance training and practical exercises to enhance management's operational coordination capabilities and frontline personnel's professional sales levels. On the other hand, centered on transformation needs, the company launched supporting measures in six key areas: products, assessment, value systems, training, promotion, and services. For example, incorporating dividend insurance sales into core assessment indicators, optimizing dividend insurance value accounting standards, and building dedicated promotion matrices to create transformation synergy through full-chain policy coordination. The company also verified strategy effectiveness in advance through two months of concentrated sales combat training.
In the first half of 2025, the company entered full execution phase, with all internal and external staff strictly following established strategies, forming an execution rhythm of "one concept, one voice, one action." On the product side, focusing on dividend insurance placement while compressing non-transformation-oriented product scale; on the assessment side, increasing dividend insurance business weight and establishing incentive mechanisms linked to transformation goals; on the resource side, tilting service resources toward dividend insurance, such as prioritizing ecosystem services like healthcare and elderly care for dividend insurance customers.
This closed-loop advancement of "strategy-deployment-execution" not only ensured transformation effectiveness but also continuously strengthened management and frontline teams' understanding of dividend insurance transformation, accumulating practical experience and building development confidence for subsequent deepening transformation.
CHINA TAIPING's transformation practice provides valuable experience for the industry. CICC consequently raised its target price by 25% to HK$28.4, noting that its dividend insurance transformation "leads peers" and expressing optimism about valuation repair potential from liability-side improvements. CICC believes that Taiping's focus on "long-term value + stable dividends" assets on the investment side, exploring overseas bond allocation to supplement fixed income, provides a solid foundation for dividend insurance returns. This model of "liability-side transformation + asset-side matching" represents an effective path for addressing the current low interest rate environment.
As transformation deepens, CHINA TAIPING is releasing long-term value potential. In the first half of 2025, Taiping Life not only achieved a 22.9% year-over-year increase in new business value (NBV), but Taiping Life's embedded value (EV), the indicator that best reflects long-term value potential, reached HK$223.591 billion, growing 8.1% from year-end. The Group's embedded value per share attributable to shareholders reached HK$53.03, a significant 9.2% increase from HK$48.57 at year-end, fully validating the core role of dividend insurance transformation in enhancing company value.
During this critical period of industry transformation, CHINA TAIPING has established a transformation benchmark from scale expansion to value priority through clear strategy, decisive execution, and solid performance. Its experience will drive more insurers to accelerate product innovation and structural optimization, injecting new momentum into the insurance industry's high-quality development.