2025 marked a year of profound transformation for the life insurance industry. The year was filled with numerous significant topics. For instance, there was sustained pressure from the external macroeconomic environment, a continuation of interest rate declines, a "slow bull" market characteristic in the capital markets, the ongoing progression of population aging, the deepened implementation of regulatory policies, the comprehensive rollout of the "Filing-Compliance Integration" rule, and the accelerated penetration of digitalization and artificial intelligence technologies... The entire industry has witnessed this. Such a deep adjustment, involving transformation, climbing, reform, striving, volatility, anxiety, and apprehension... has almost simultaneously been reflected across insurers of different scales and tiers. The internal competitive landscape of the life insurance industry has never been so persistently and rapidly diverging. During this period, leading companies steadily expanded by leveraging their capital strength, technological capabilities, and comprehensive service advantages, fully demonstrating their scale benefits. Small and medium-sized insurers, facing abrupt changes in both internal and external environments, grappled with multiple challenges including severe product homogenization, channel shrinkage, and insufficient solvency. Reflecting on 2025 and looking ahead to 2026, the inaugural year of the 15th Five-Year Plan, it is clear that this year's historical position will be pivotal in determining the market direction for the next five years. Facing the "triple squeeze" of high存量 costs on the liability side, intensified volatility in asset-side returns, and persistent pressure on the capital side, coupled with the transition to new accounting standards and the advancement of the second phase of Solvency II, how should insurance institutions strategically re-examine their business models and resource allocation logic? Furthermore, how can "customer-centricity" move beyond mere slogans to become genuinely internalized as the core principle driving products, channels, and organizational operations? As one of China's first actuaries, Lou Daoyong, founder and CEO of Yandao Digital Technology, has held core back-office management positions such as Chief Actuary and CFO in medium-to-large insurance companies, deeply participating in corporate-level liability management, capital planning, and operational decision-making. He has also directly led high-performance insurance sales and operations teams, gaining firsthand experience with customer needs, channel efficiency, and real business scenarios from long-term frontline involvement. In recent years, he has shifted focus to the insurance technology sector, engaging in continuous collaboration and research with multiple life insurers. This provides a broader, more横向 perspective to observe the differing responses and outcomes of various institutions amidst changing regulatory environments and increasing operational pressures. Leveraging this cross-cycle practical experience and insights from diverse roles, and starting from the logic of actuarial science, financial constraints, and real business scenarios, he attempts to forecast the industry's trajectory for 2026 and beyond: In this new cycle, which "underlying capabilities" should life insurers focus on honing, and which pathways need recalibration? 1 -Insurance Today- Forecast One Continued advancement of Filing-Compliance Integration Further cost reductions, more granular expense management "Filing-Compliance Integration," the most watched policy in the industry over the past two years, will see more scientific and refined implementation in 2026. Since 2023, regulators have progressively rolled out the "Filing-Compliance Integration" policy nationwide, requiring life insurers to report product附加费用率 and commission levels to regulators that must align with actual expense execution, aiming to promote fair competition and steady, healthy development. According to the central bank's 2025 Financial Stability Report—in 2024, expense reductions across the entire insurance industry exceeded costs by over 200 billion yuan. Adding liability-side cost reductions brings the total to over 300 billion yuan. The majority of this was concentrated in the life insurance sector. Entering 2025, this policy was not only fully implemented across all channels but was further supplemented by the "Notice on Regulating the Allocation and Recording of Life Insurance Product Expenses," which clarified expense attribution principles, accounting methods, and audit standards. Channel structure adjustment forces change: Intermediary channels reliant on high commission incentives are impacted, pushing the industry towards specialization and service-oriented transformation; Product design becomes more rational: Insurers are moving away from "trading high commissions for scale," instead focusing more on customer management, product embedded value (NBV), and sustainable profitability. From a higher perspective, "Filing-Compliance Integration" is essentially an industry-wide anti-involution and supply-side reform. It not only compresses irrational competition space and enhances market transparency but also creates a fair competitive environment for insurers truly possessing actuarial pricing capabilities, asset-liability matching skills, and customer service capacities, prompting them to establish more sophisticated cost management systems. This will undoubtedly remain a key focus for all institutions in 2026. 2 -Insurance Today- Forecast Two Dramatic shift in channel landscape: Bancassurance Continues strong growth, but significant room for specialized operations Bancassurance was undoubtedly the star channel of 2025, almost single-handedly carrying the industry's growth. Unlike the past where insurers were the eager party, banks are now equally enthusiastic about bancassurance, creating mutual fervor. The reasons are straightforward: Since 2023, the net interest margin (NIM) of commercial banks has continued to narrow. By Q3 2025, the NIM for commercial banks stood at 1.42%, a historically low level. A reasonable NIM level for Chinese commercial banks is generally considered to be around 1.6%-1.8%. In fact, regulators previously used 1.8% as a "deduction line" for NIM assessment... now, most banks are below this line. Furthermore, based on 2025 interim reports and 2024 annual reports, the number of banks with non-performing loan (NPL) ratios for personal loans exceeding 1.42% reached 27, primarily city commercial banks. Looking at the trend, the NPL ratios for personal loans at most banks are still rising. The big six state-owned banks generally have personal loan NPL ratios in the 1%-1.4% range. The critical inflection point where these two metrics—NIM and NPL ratio—inverted occurred in Q1 2025: The banking industry's NPL ratio rose from 1.5% in Q4 2024 to 1.51%; while the NIM narrowed more significantly from 1.52% to 1.43%. On one hand, this forces banks to highly value fee-based income and customer wealth management. Insurance, as a key financial tool in wealth management, has become a major source of fee income for banks. China Merchants Bank's cumulative trillion-yuan premium income figure has ignited the battle among banks for premium revenue. On the other hand, Chinese consumers place extremely high trust in banks, which also hold customer cash flow data, giving them a natural advantage in asset allocation. Coupled with the significant influences of Filing-Compliance Integration and declining policy interest rates, the value rate of bancassurance business has risen rapidly, transforming its role from a previously marginal one to a current hot commodity. Consequently, bancassurance has become the mutual choice for both banks and insurers. Almost all insurers now highly prioritize the bancassurance channel, including giants and foreign insurers who previously had small bancassurance shares or were even compressing it, all aggressively entered this channel last year. This drove its share of new single-premium business to rise rapidly to around 65%, with periodic premium payments接近 50%. This share is expected to continue rising in 2026's new business structure. However, inherent issues with bancassurance must be noted: There is still a long way to go in specialized operations. The current sales model still primarily focuses on customer cash flow planning and fund shifting ("挪储"). It remains at a very preliminary stage in addressing deeper customer needs like family protection, asset inheritance, retirement planning, education funding, and health coverage. Additionally, most insurers have not yet begun professional management of their external sales teams or systematic professional empowerment. Over the past two years, through research and visits to various types of companies, and leveraging our actuarial expertise combined with AI capabilities, we have developed specialized systems for external team management and systems for transitioning from customer insight to professional customer management. Pilot implementations in bank branches have shown a qualitative improvement in productivity. 3 -Insurance Today- Forecast Three Dramatic shift in channel landscape: Large-scale Agency Force Persistent pain, focusing on specialization is the only direction The agency force channel has been the most challenging sector over the past two years, yet remains a primary channel crucial for industry development. Especially for the true giants, the agency force is their most fundamental base. During this period, the once most-prized agent headcount has plummeted from its peak of nearly 10 million in 2018 to around 2.5 million by the end of 2025. Although one public data source suggests the industry's agent force shrank by about 3% in 2025, indicating a potential "slow decline" bottoming-out pattern, another同业交流 data source reveals severe divergence: established companies and foreign insurers experienced slightly smaller declines, while other domestic and small-to-medium-sized insurers saw larger drops, even reaching -8%. Considering active agents, the industry's true headcount is likely an unsustainable figure. This has created a vicious cycle of "agent incomes not rising, leading to an inability to retain people." In recent years, despite elite transformation initiatives led by giants and an increasing number of companies launching various "planner" programs, which have boosted productivity per agent... New business premiums and value rates face severe tests. Based on public data estimates, the industry's new agency single-premium business might have contracted by around 5% in 2025. Such growth undoubtedly puts immense pressure on every company operating an agency force. This implies that in 2026, companies must either find a "new agency model" or identify channels that can替代 the value of the agency force. The former is certainly not easy, but the latter seems even more difficult. Considering the full implementation of "Filing-Compliance Integration" in 2026, the test for agency operations will intensify. So, what is the future path for the agency force? The answer lies in the already clear direction of "specialization." Only by earning customer trust through professionalism can average premium per policy be increased and agent retention improved. As customers become more rational and their understanding of insurance grows, and with the full implementation of regulations like product suitability and sales suitability, how can the industry shift from the recent dominance of whole life insurance with increasing coverage back to being customer-needs oriented? How can this be concretely implemented to match specific needs like family protection, retirement planning, and wealth management with appropriate products? These are the areas where the agency force must exert significant effort on its path towards specialized operations. Within the large agency sector, how will intermediaries, serving as a supplement for many insurers, fare? The intermediary channel, which had a tough 2025, might need more time to stabilize in 2026. With the implementation of Filing-Compliance Integration in the intermediary channel over the past two years, all intermediary companies primarily engaged in offline life insurance business have been severely impacted, including leading intermediaries. For many small and medium-sized intermediaries, survival is clearly under great threat. Data disclosed by regulators shows: By the end of December 2024, there were 2,539 insurance intermediary institutions nationwide, a decrease of 27 from the end of 2023. Since 2025, online reports indicate over 20 insurance intermediary institutions have deregistered. According to exchange data from 44 companies operating offline life insurance intermediary business, new business standard premiums have declined significantly year-on-year after the implementation of Filing-Compliance Integration, as detailed in the table below: Note: Data source, peer exchange. Previously, the main logic for offline intermediaries was using higher commissions to push high cost-performance ratio products. But this logic struggles in a low-interest-rate era combined with Filing-Compliance Integration. Therefore, based on the current trend, stabilization for offline life insurance intermediaries will still require time, likely becoming apparent around 2027. 4 -Insurance Today- Forecast Four What changes will occur in the product market? Three conclusions, three main drivers: Participating Insurance + Mid-tier Medical + Pension Insurance Conclusion One: Against the macroeconomic backdrop of a persistent long-term downtrend in interest rates and a阶段性回暖 in capital markets, the underlying logic for rapid growth of floating-return insurance products like participating insurance is established. Looking further, the continuous low level of the 10-year government bond yield exerts sustained pressure on insurers' liability valuation, capital consumption, and overall solvency. Simultaneously, the significant recovery of the stock market in 2025 highlighted the relative advantages of long-term, patient capital, represented by life insurance funds, in equity allocation. Under the combined effect of these two factors, and as policy interest rates continue to decline, the sales appeal of traditional high-guarantee products is diminishing. For insurers to balance fairness to customer interests with long-term business sustainability and maintain basic competitiveness in return characteristics compared to other financial products, increasing the proportion of product forms like participating insurance and universal life insurance appears inevitable. It is important to note that participating insurance structures are relatively complex. Coupled with the market惯性 formed by multiple interest rate switches since 2018 leading to "last-minute sales surges," frontline sales systems face practical resistance during the product structure transition, which will take time to digest. From practical results, the agency and intermediary channels have completed some adjustment, while the bancassurance channel, constrained by multiple factors, still has a relatively low proportion of participating insurance. Overall, however, given the normalization of a low-interest-rate environment, participating insurance will remain a representative mainstream product type in the future insurance market. Data source: Ministry of Finance. Conclusion Two: DRG/DIP reforms and the innovative drug目录 drive medical insurance upgrades. Mid-tier medical insurance will gain traction, becoming a highlight in the new year. By the end of 2025, all统筹地区 nationwide had implemented DRG (Diagnosis-Related Groups) or DIP (Diagnosis-Intervention Packet) medical insurance payment reforms. Control over average hospitalization costs has tightened, changing the revenue structure of public hospitals. Medical insurance data from some first- and second-tier cities shows that in 2025, average costs per hospitalization in tertiary hospitals decreased by 3.4%–3.7%, significantly saving medical expenses. In November 2025, the Insurance Association of China, jointly with the National Medical Products Administration, released the first edition of the "Commercial Health Insurance Innovative Drug目录," including 121 high clinical-value肿瘤靶向药 and rare disease drugs not yet covered by basic medical insurance. These developments create opportunities for innovation in medical insurance product development. In recent years, premium growth for health insurance has been under pressure. From January to November 2025, cumulative health insurance premiums reached 943.9 billion yuan, with the full year expected to exceed 1 trillion yuan for the first time. Within this, disease insurance premiums saw a slight decline, but medical insurance premium growth was rapid. Data source: Mingde Consulting. Against this backdrop, breakthroughs in commercial medical insurance must focus on developing new products for areas outside basic medical insurance coverage. This is the mid-tier medical insurance sector, which the industry unanimously看好 and the author has long favored. Specific directions include: Special needs medical care and international department services; Reimbursement for innovative drugs and medical devices; Post-hospital rehabilitation and long-term care. Conclusion Three: Deepening aging催生 new growth drivers in pension insurance. In 2025, China's population structure continued its trend of concurrent "low birth rates + deep aging," becoming a fundamental factor influencing the demand structure for life insurance. According to the National Bureau of Statistics' "2024 National Economic and Social Development Statistical Bulletin": At the end of 2024, the population aged 60 and above reached 310 million, accounting for 22%, indicating an accelerating aging trend. Chart 1: Number and Proportion of China's Population Aged 60 and Above (2010–2025E) In December 2025, regulators officially released the "China Life Insurance Industry Experience Mortality Table (2025)," showing a continued increase in average life expectancy. This will have the following impacts: Reserve requirements for pension annuity products need to be adjusted upwards, leading to higher prices for new products; There is some room for slight premium rate reductions for life insurance products, but this is suppressed by interest rates and current pricing considerations, making adjustments less likely. These circumstances indicate a continuing expansion of the pension保障缺口: As the replacement rate of the first pillar, basic pension insurance, declines (currently around 39%), development space for the second and third pillars opens up. Since December 15, 2024, the personal pension system has been promoted nationwide from 36 pilot cities. According to the Ministry of Human Resources and Social Security, by June 15, 2025, the number of people nationwide who had opened personal pension accounts exceeded 150 million. Participation in the basic pension insurance system is a prerequisite for joining the personal pension system. MHRSS statistics show that by the end of 2024, approximately 1.07 billion people participated in basic pension insurance. Currently, the number of personal pension account holders represents about one-seventh of basic pension insurance participants. So, how to effectively tap into the pension insurance market? It is essential to conduct detailed analysis of customers' retirement plans and their existing pension insurance status (across pillars one, two, three, and other pension assets) to scientifically and rationally calculate future needs, while also meeting regulatory requirements for pension insurance sales suitability. This requires not only training on pension-related matters by insurers and banks but also the support of pension actuarial systems (including multi-level pension security system calculations) for the professional operation of pension insurance. This is an area the author's company has focused on in recent years, helping various insurers and bank branches achieve good results. 5 -Insurance Today- Forecast Five Scenario-based life insurance sales models shine Transitioning from product pushing to precision + advisory marketing In the current environment, life insurance marketing primarily relies on several relatively mature scenario-based approaches: The most common is "scenario marketing" or experiential marketing, which involves organizing activities around life scenarios customers are interested in. Examples include health check-ups and early screening at private hospitals, aesthetic medicine and anti-aging projects, visits to retirement communities, experiences of home-based elderly care scenarios, and various high-end lifestyle or cultural experience activities, supplemented by insurance product presentations. These activities are diverse in form, highly replicable, and can be flexibly designed according to different seasons and life scenarios, making them easy to conduct continuously. However, their weakness lies in a large initial "funnel" for lead generation. Without prior communication and预热 regarding insurance needs, conversion rates often suffer. The second type is the traditional bancassurance "fund shifting" scenario. This involves inviting customers to financial activities based on their cash flow information when阶段性 changes occur in interest rates, stock markets, exchange rates, etc., to achieve insurance sales. This scenario boasts high conversion efficiency but primarily targets cash flow planning, exhibiting fast-sales characteristics, with relatively limited exploration of insurance protection and risk management functions. Additionally, there are more professional scenario activities related to law, taxation, risk management, and asset allocation. These align more closely with insurance logic, resulting in higher成交效率 and customer匹配度, but they also demand more rigorous customer screening and前期 preparation. This implies that regardless of the channel or scenario used, if customers do not have a clear understanding of the activity's purpose and their own insurance needs before participation, even successful sales may not achieve truly effective protection allocation. Therefore, various scenario activities must be combined with advisory marketing: deeply integrating around customers' genuine risk protection and wealth management needs to unleash efficiency far surpassing traditional sales models. This model is reflected not only in increased average premiums per policy but also demonstrates significant comprehensive advantages in key business and quality indicators such as surrender rates during the cooling-off period, persistence rates, and complaint rates. This also aligns perfectly with the current regulatory direction. In the notice issued by regulators in Q2 2025 regarding deepening the reform of the personal marketing system in the life insurance industry, the concept of an "insurance sales advisor" was explicitly proposed. In fact, as the industry entered a period of deep transformation in recent years, with simultaneous strengthening of external environments and internal constraints, the reform of the life insurance operating system has shown a clear acceleration trend— Starting from September 2023, regulators successively released regulations like the "Measures for the Administration of Insurance Sales Conduct" and the "Standard for Sales Capability Qualification Grades of Personal Insurance Agents (Life Insurance Direction)"; Subsequently, in September 2024, the State Council issued the "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development of the Insurance Industry"; On July 11, 2025, the National Financial Regulatory Administration formally released the "Measures for the Administration of Financial Institution Product Suitability,"明确 stating its implementation date as February 1, 2026, providing a six-month transition period for the market. Against this backdrop, the future logic of professional operations in sales becomes visible: "Selling suitable products to appropriate customers by sales personnel possessing corresponding qualifications." This requires advisory marketing underpinned by sufficient professional skills. Revisiting成熟市场 practices like Financial Needs Analysis (FNA) and Needs-Based Selling (NBS) reveals their essential logic is consistent with the sales suitability management emphasized by current regulators. Furthermore, considering the backdrop of accelerating AI development, integrating data, scenarios, and customer insights will inevitably lead the life insurance industry's sales models towards a deeply integrated development path of "precision marketing" + "advisory marketing." In fact, the author, citing the continuous investment and support from their company in building relevant sales systems, can point to representative successful cases already emerging on this path. 6 -Insurance Today- Forecast Six While the asset side enjoys the bull market Under new Asset-Liability regulations Insurers will highly prioritize the challenges of ALM First, changes on the investment side: Over the past year, investment returns for insurance funds rebounded significantly. While the equity allocation ratio continued to rise,加剧的市场波动 also posed considerable challenges to the stable operation of insurers. As widely known, since the "9/24" market surge in 2024, relevant regulators have consistently supported and encouraged long-term patient capital (particularly life insurance and various pension funds) to increase investment in the capital market, addressing pain points and blockages for entering the stock market, and successively放宽 insurance company investments in gold and lowered risk factors for reserves on certain stocks. Driven by policy support and foreign capital回流, China's capital market experienced a "structural slow bull" in 2025. Consider three sets of data: First set: The CSI 300 Index closed at 3934.91 at the end of 2024 and at 4629.94 on December 31, 2025, a rise of 17.66%. Second set: According to the insurance fund utilization情况表 published by regulators for Q3 2025, the stock and fund持仓比例 of life insurers rose steadily, reaching 15.38% at the end of the most recent quarter. The financial conditions of life insurers improved significantly. Third set: In the first three quarters of 2025, the five major A-share listed insurers—China Life, Ping An, PICC, CPIC, and New China Life—collectively achieved归属于母公司股东的净利润 of 426.039 billion yuan, an increase of over 100 billion yuan year-on-year, a growth of 33.5%, setting a new record after last year's historical high. Looking solely at Q3 performance, the data is even more striking, with the five listed insurers' quarterly net profit同比增长 reaching 68.3%. Data source: Regulatory authorities. Towards the year-end, another policy concerning the investment side was released: the draft new rules for Asset-Liability Management. On December 19, 2025, the National Financial Regulatory Administration released the "Measures for the Administration of Insurance Company Asset-Liability Management (Draft for Comment)." This is a key measure to implement the requirement to "strengthen asset-liability linkage supervision" from the State Council's "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development of the Insurance Industry," and also an important institutional arrangement connecting the comprehensive implementation of new accounting standards in 2026 and addressing the impact of interest rate fluctuations on assets and liabilities. Previously, the 2018 "Insurance Asset-Liability Management Regulatory Rules" and the 2019 "Interim Measures for the Administration of Insurance Asset-Liability Management" established a preliminary regulatory framework. However, with changes in the external environment and internal conditions of the insurance industry, especially under pressure from low-interest-rate trends, issues like disconnection in ALM, unclear policy procedures, and lack of regulatory standards for indicators became apparent. The new measures aim to upgrade the regulatory system from "soft constraint pilot" to "hard constraint standardization" by integrating分散 rules and filling regulatory gaps. The new ALM measures mandate: An organizational system where the "Board of Directors bears ultimate responsibility, senior management provides direct leadership, the Asset-Liability Management Department coordinates, functional departments collaborate, and internal audit provides oversight." It stipulates that the Board must establish an Asset-Liability Management Committee (with no fewer than 3 board members), and the ALM department must maintain independence, performing its duties without interference from business or investment departments. It also clarifies that internal audit must review management effectiveness at least annually, forming closed-loop supervision. Insurers are required to submit ALM reports quarterly, with annual reports requiring third-party review. Regulatory authorities will implement differentiated measures based on indicator compliance and capability assessment results, forming a regulatory closed loop of "monitoring - assessment - rectification - penalty." 7 -Insurance Today- Forecast Seven Changes on the capital side Under the 750-day curve and new regulations Solvency pressure persists, debt issuance becomes常态 Solvency pressure continues to increase, which will undoubtedly be the most realistic challenge in 2026. Squeezed by both declining policy interest rates and the previously existing large duration gap in asset-liability management, most companies face利差损 risk. Although the industry currently benefits from the叠加 favorable effects of lower new product policy rates, adjustments under new accounting standards, and a favorable capital market, leading to generally positive overall profit trends, the "frog-boiling" effect persists as the 750-day moving average of the 10-year government bond yield curve remains at low levels. To address capital pressure, the life insurance industry resorted to issuing perpetual bonds and capital supplement bonds in 2025 to alleviate solvency pressure. Debt issuance exhibited characteristics of "total volume retreating, high proportion of perpetual bonds, and year-end冲刺 concentration." If the 10-year government bond yield curve can stabilize in 2026, this pressure might ease somewhat. Otherwise, various capital replenishment methods will need continued consideration. 8 -Insurance Today- Forecast Eight The wildcard: AI empowerment A major highlight for 2026 From发散 to precision, reshaping the insurance value chain AI, large language models, and related technologies are the hottest topics today. Almost no one doubts their potential to transform any traditional industry; the more traditional, the more profound the change. Rapid iterations of large models, computing infrastructure, and the semiconductor industry's fast development... in this domain关乎国运, everyone awaits the arrival of a singularity moment. And 2026 is destined to be a big year for AI+ applications, a priority written into national policy. As the industry deepens its research into application scenarios, technologies, and data for large models, in 2026, AI agents will inevitably deeply empower the life insurance industry, driving intelligent transformation across the entire process. Insurers will leverage AI to build customer insight models, combine them with advisory marketing logic, and establish personalized product recommendation engines to precisely match customer needs. For instance, AI health assistants based on wearable devices can monitor customer vital signs in real-time, enabling proactive health management. The integration of intelligent customer service and emotion recognition technology can significantly enhance service warmth and efficiency. Privacy-preserving computation ensures data security, facilitating compliant innovation. Undeniably, AI is upgrading from a tool to a strategic engine, reshaping the insurance value chain and leading the industry towards a new era of "customer-centric" precision marketing and smart insurance. This represents the most significant change the insurance industry has faced in centuries and will be a major highlight throughout the 15th Five-Year Plan period. Postscript Final Words Navigating the cycle: Six points aiding high-quality industry development In 2026, the life insurance industry stands at a historic inflection point. The industry must attach high importance to the following aspects: Channel restructuring is irreversible: Bancassurance rises, the agency force seeks rebirth; Sales models must truly become customer-centric, moving towards precision marketing and service marketing; Product innovation must focus on genuine customer needs, concentrating on retirement, health, and wealth inheritance; The asset side is in a repair window, with heavyweight policies arriving for asset-liability management; Technology is no longer "icing on the cake" but "a matter of survival or death"; Management moves towards refinement, with Filing-Compliance Integration continuing to deepen.