CITIC Prudential Life Insurance recently released its summary solvency report for the fourth quarter of 2025. Data shows that in 2025, the company's insurance business revenue reached 33.7 billion yuan, a year-on-year increase of 12%. Its net profit was 5 billion yuan, not only reversing previous losses but also reaching a record high since its establishment. However, behind this significant turnaround, the quarter-by-quarter increase in the comprehensive surrender ratio throughout 2025 has raised industry concerns about the sustainability of its growth.
The latest report indicates that in the fourth quarter of 2025, the surrender amount for CITIC Prudential's "ZhiShang Life" Annuity Insurance Plan C (Investment-Linked), referred to as "ZhiShang Life," was 1.833 billion yuan, corresponding to a quarterly surrender rate of 9.1%, a figure still within the normal fluctuation range for the industry. However, for the full year of 2025, the cumulative surrender amount for this product reached 9.1 billion yuan, with an annual cumulative surrender rate of 34.7%.
Why are investment-linked insurance products, which combine protection and investment functions, gradually losing favor with consumers? Given the current market environment, how can insurance companies enhance the market appeal and suitability of investment-linked products?
Apart from surrenders due to normal policy maturity without fees, consumer surrenders of investment-linked policies generally stem from two reasons: returns falling short of expectations or purchasing an unsuitable product. An insurance academic expert suggested that the future direction for investment-linked insurance lies in strengthening its investment attributes, as it is inherently an investment-oriented product. Clients purchase it seeking higher investment returns. These products require transparent processes, should be sold without misleading claims, targeted only at those who understand the risks, and insurers need to improve the investment returns of their investment-linked product segments.
CITIC Prudential's report shows that in 2025, the company achieved a net profit of 5 billion yuan, a record high. Insurance revenue reached 33.7 billion yuan, up 12% year-on-year. By the end of 2025, the company's total assets had risen to 270.2 billion yuan, with a comprehensive solvency adequacy ratio of 209% and a core solvency adequacy ratio of 123.5%.
Investment performance was a key driver of CITIC Prudential's high profit growth. The solvency report summary indicated the company's investment yield reached 4.83% in 2025, significantly higher than its average yield over the past three years (2.44%). A company representative stated that facing a complex and volatile market environment over the past year, the company continuously optimized its business structure and upgraded its asset allocation, achieving synergistic growth in quality and efficiency.
On the liabilities side, CITIC Prudential actively promoted product transformation, increasing its focus on floating-yield and pension products. On the assets side, the company adhered to a long-term investment philosophy, leveraging the advantages of insurance funds as "patient capital." By the end of the third quarter of 2025, the total assets under management for CITIC Prudential Asset Management were nearly 370 billion yuan.
According to its website, CITIC Prudential Life Insurance was established in 2000 as a joint venture life insurer co-founded by China CITIC Financial Holdings and Prudential plc, with each holding a 50% stake. To date, the company has established 23 branches in locations including Guangdong, Beijing, and Jiangsu. The company's operations had been relatively stable since its inception until 2022, when net profit began to decline sharply, entering a loss-making phase.
To address solvency pressures stemming from the performance downturn, CITIC Prudential initiated two capital increases totaling 5 billion yuan in 2024. In February 2024, approved by the National Financial Regulatory Administration, its registered capital increased from 2.36 billion yuan to 4.86 billion yuan. In November 2024, it raised capital by another 2.5 billion yuan, further increasing registered capital to 7.36 billion yuan, gradually strengthening its capital base. Concurrently, the company pursued business transformation, gradually shifting towards products with longer payment terms and higher value, with the proportion of participating and health insurance products continuously increasing.
CITIC Prudential attributed its sustained positive operating performance partly to the empowerment of its "Insurance+" ecosystem service system. In recent years, the company has focused on building a high-quality development model integrating products and services. In 2025, it officially launched a full-life-cycle product service system encompassing "Health, Pension, Education, and Wealth," creating a comprehensive service ecosystem covering clients' entire life cycles around four core scenarios: health medical care, pension companionship, children's education, and wealth management.
Despite the performance turnaround in 2025, the escalating surrender rate remains a concern. CITIC Prudential's comprehensive surrender ratio showed a quarterly increasing trend throughout 2025: 1.75%, 3.19%, 4.93%, and 6.13% for Q1 to Q4 respectively.
At the product level, the "ZhiShang Life" product is a representative example. Data shows that "ZhiShang Life" was sold through bancassurance and other channels. Its Q4 2025 surrender amount was 1.833 billion yuan, with a surrender rate of 9.1%. The cumulative surrender amount for 2025 was 9.1 billion yuan, with an annual surrender rate of 34.7%. This product is currently discontinued. According to the product description, "ZhiShang Life" was an investment-linked product, a comprehensive protection plan combining life insurance coverage with investment, offering benefits such as death benefits and annuities. The insurer provided clients with multiple investment accounts, allowing them to select one or more accounts and allocate premium contributions accordingly.
Regarding the surrenders, CITIC Prudential stated that the product design allowed for surrender after five years without fees, which is normal. Beyond this "normal" aspect, the volatility of the "ZhiShang Life" returns is also a notable issue. The product offered nine investment accounts: Cash Enhancement, Optimal Bonds, Stable Allocation, Balanced Growth, Strategic Growth, Aggressive Growth, Growth Pioneer, Leading Advantage, and Prime Selection. Each account had different asset allocation targets, investment strategies, and primary risks.
By the end of June 2025, the unit net values for these nine accounts were 0.95, 2.22, 1.19, -0.93, -2.20, 10.21, 2.97, -0.40, and 0.34, respectively. Compared to their initial unit values, some accounts had achieved growth with decent returns. However, compared to their unit values at the end of 2024, only the Aggressive Growth account showed positive returns; the others had experienced drawdowns, performing worse than at the end of 2024.
Furthermore, the predominant bancassurance sales channel indirectly contributed to the product's surrender behavior. Bancassurance clients typically have relatively conservative risk appetites and are often older, with lower tolerance for equity market volatility. When investment-linked accounts experience drawdowns, the mismatch between clients' risk tolerance and the product's risk profile can quickly intensify. Additionally, bancassurance transactions often rely more on client trust in the bank, with a weaker long-term service relationship between the client and the insurer. During market changes and increased account volatility, the lack of ongoing professional support and expectation management can more easily trigger surrender behavior, according to an insurance economics professor.
This phenomenon is not unique to CITIC Prudential. Data from solvency reports of various insurers show that products experiencing "normal surrender" like "ZhiShang Life" are not uncommon. Investment-linked products frequently appear among the top three products by annual surrender rate or surrender amount for many insurers. For instance, another insurer's investment-linked whole life product had a surrender amount close to 7.5 billion yuan in 2025, with a surrender rate nearing 40%. Another insurer's investment-linked product had a surrender amount of 666 million yuan, but a surrender rate exceeding 90%.
Insurers' official explanations typically categorize these as normal and state they do not pressure company cash flow or operations. However, from a consumer perspective, these actions are often driven by non-routine factors, such as sensitivity to account performance. A product manager suggested that the core reasons for the rising surrender rates of investment-linked products currently lie in performance sensitivity triggered by net value drawdowns due to capital market volatility, and expectation mismatches leftover from the sales process. Many consumers view these products as short-term financial tools rather than long-term protection plans. When market turbulence leads to returns below expectations or even paper losses, clients lacking long-term holding conviction are prone to panic redemptions. Simultaneously, some consumers facing liquidity pressures are forced to liquidate. Coupled with insufficient understanding of the product's fee structure, even if surrender fees apply, the disparity between expected and actual returns leads them to cut losses and exit. This "chasing highs and selling lows" mentality is a primary non-routine factor driving surrenders.
This does not mean investment-linked insurance has lost its appeal. As a product offering both offensive and defensive characteristics, its advantages remain significant. For example, it combines protection functions with flexible conversion modes and provides clients with more investment options. Against the backdrop of comprehensive net-worth-based wealth management, investment-linked insurance still has room for development, catering to the diverse investment needs of different customer segments. However, change is the current norm, and high surrender data signals that the original design of investment-linked products needs adjustment.
Insurers should build a defense system from a full life-cycle management perspective. In product design, they should optimize account switching mechanisms, add stable or defensive accounts for flexible allocation to reduce the impact of single-market volatility, and consider introducing profit-sharing mechanisms to smooth short-term fluctuations. In customer service, a shift from "sales-oriented" to "accompaniment service" is needed, strengthening investor education and establishing key market point account review and intervention mechanisms. During periods of high market volatility, timely psychological guidance can help clients rationally view short-term net value fluctuations. In investment management, enhancing asset allocation capabilities and pursuing long-term, stable absolute returns with solid investment performance will boost client confidence and loyalty.
Looking at the market environment from 2025 to 2026, the future development of investment-linked insurance is more likely to depend on insurers' asset management capabilities rather than单纯的 sales strategies. In a context of low interest rates and high volatility, the core factor maintaining the appeal of investment-linked products remains the long-term investment return capability of the accounts. Given the high proportion of equity assets typically allocated in these accounts, improving professional asset management levels and enhancing risk-adjusted returns will directly determine product competitiveness.
Overall, the future of investment-linked insurance is not simply a choice between "investment" and "protection." Instead, it requires maintaining investment flexibility while paying more attention to clients' risk tolerance and long-term holding experience, achieving a relative balance between investment attributes and stability.