China Post Life 2025: A Life-or-Death Race Against Time to "Fill the Capital Gap"

Early spring of 2026, the annual report season for bank-affiliated insurance companies feels heavier than in previous years. As the leader among bank-affiliated insurance firms, China Post Life delivered a set of compelling data to the market via its Q4 2025 solvency report: Full-year insurance business income reached 159.166 billion yuan, an 18.0% year-on-year increase, continuing to lead the bank-affiliated insurers; Net profit was 8.345 billion yuan, a 9.2% year-on-year decrease, yet it maintained a leading position among non-listed insurers. Contrasting with the bright profit statement, the speed at which its capital is consumed has now significantly outpaced the rate of replenishment. Xinfeng noted that although China Post Life repeatedly boosted its capital in 2025, its actual capital continued to decline. Through the solvency report, it is clear that amid a prolonged low interest rate period and strict regulations, this trillion-yuan insurance company is undergoing a challenging transformation: As the asset side’s valuations fluctuate like tides, and the liability side’s costs remain rock-solid, China Post Life, squeezed in between, must fundamentally shift its survival logic. **“Shrinking Family Wealth”** Changes in assets and liabilities can sometimes be more honest than the profit statement. In the solvency report for China Post Life, a set of core data showed a divergence: By the end of 2025, its actual capital was 62.642 billion yuan, down more than 20 billion yuan from the end of 2024, a drop of 25.6%. For life insurance companies, actual capital is the true foundation for measuring risk resistance and future expansion potential. Against the backdrop of more than 8 billion yuan in net profit for the year, a hundred-billion level contraction in actual capital is unusual. Breaking it down, the capital flow changes of China Post Life in 2025 showed a typical "outflows outweigh inflows" feature. **Inflows were high-intensity external injections.** In June 2025, China Post Life completed a capital change, receiving nearly 4 billion yuan from two major shareholders: China Post Group and AIA; registered capital increased from 28.663 billion yuan to 32.643 billion yuan. In the second half of the year, the company continued to replenish capital through bond issuance in the interbank bond market, issuing two perpetual capital bonds in November and December, totaling 4.1 billion yuan raised. Counting only obvious external capital inflows, China Post Life acquired close to 8 billion yuan of incremental capital throughout the year. However, in reality, neither external injections nor endogenous profits managed to reverse the downward trend in actual capital; the incoming funds did not linger on the books, as capital outflows quickly offset them. **Outflows were rigid redemptions and asset valuation “reefs” amid bond market volatility.** At the end of 2025, China Post Life exercised its redemption rights and fully redeemed 6 billion yuan of maturing capital bonds. This operation led to recognized assets decreasing more than the adjustment of recognized liabilities, causing the solvency adequacy ratio for the quarter to drop by 14.7 percentage points. Nevertheless, with new bond face interest rates continuing to fall, "redeem old and issue new" still serves to optimize the asset-liability structure overall. Deeper shocks came from asset shrinkage on the investment side. China Post Life disclosed that, following a long-term stable investment strategy, the company invested a certain proportion in long-term bonds as strategic assets. In the “bond bull” of 2024, China Post Life’s bond holdings saw substantial increases in fair value, with a composite investment yield as high as 11.04%, accumulating robust unrealized gains; but entering 2025, the yield curve shifted upward, bond prices generally retreated, and the company’s composite investment yield dropped to 0.74%. China Post Life has adopted new financial instrument standards (IFRS 9), so such assets may be included in FVOCI (fair value through other comprehensive income) accounts; price volatility isn’t reflected in profits, but in equity. This means bond market fluctuations didn’t impact the profit statement, but most of the previously accumulated unrealized gains have been given back. Excluding these fair value fluctuations, China Post Life’s annual composite investment yield was 3.91%. “This better reflects the company’s asset-liability management intentions and is more meaningful for assessment.” By the end of 2025, its core solvency adequacy ratio fell to 92.19%. Though still in the regulatory safety zone, the buffer from the red line has been sharply compressed. **Bank-Insurance “Falling Behind”** If volatility in capital is a financial outcome, the stall in business is a deeper operational issue. Long relying on Postal Savings Bank’s urban and rural network, China Post Life built a highly penetrative bancassurance sales network, but as the industry transitions into uncharted waters, the side effects of channel dependency are surfacing. First is the **pain of post-rate reform**. In 2024-2025, reform of interest distribution between banks and insurers deepened; the “reporting and business integration” policy strictly lowered bancassurance commission rates, and the removal of the “one-to-three” restriction enhanced competition. The shock to bank-affiliated insurers from these reforms has yet to be digested. Industry data shows that in 2025, the "Big Seven" life insurers—China Life, Ping An, CPIC, New China Life, Taiping, PICC, and Taikang—had a 48% year-on-year growth in first-year bancassurance regular premium, while bank-affiliated insurers saw -7% growth. Among them, China Post Life’s first-year bancassurance regular premium fell by 27% year-on-year. Long Ke, co-founder of Zhongtuobang and founder & CEO of Banghuibao, pointed out that bank-affiliated insurers’ weakness in bancassurance comes firstly from a sharp drop in commissions reducing sales motivation, and secondly from leading insurers using their brand and service advantage to grab market share. When commission advantage disappears, product competitiveness and the service system become decisive for closing sales. Long Ke pointed out that bank-affiliated insurers are still commonly faced with overreliance on parent bank channels, single product structures, and new accounting standards amplifying interest rate volatility—"This is the pain of an industry moving from rough growth toward high-quality transformation, pushing some companies to switch to higher value business." Second is the liquidity pressure of **hundred-billion-level surrender**. In Q4 2025, China Post Life’s comprehensive surrender rate rose to 2.16%. The previously sold mainstay savings products are now central to concentrated surrenders. Among them, "China Post Enjoyable Life Annuity" saw 5.296 billion yuan in annual surrenders, with a surrender rate as high as 16.26%. This means that, amidst market volatility, customers’ patience for long-term savings products is waning. In a low interest rate environment, customer preference for liquidity is rising, and with some higher-yielding short-term financial products available, policy replacement may occur. Furthermore, much of the growth for bank-affiliated insurers in recent years came from “quick-return” short and medium-term business. As customer profiles for bancassurance closely match those for bank financial products, when early policies enter peak cash value periods, lacking sticky products and retention services may prompt customers to leave en masse. All these factors not only test the company’s cash flow management but also subtly erode hard-won capital reserves. **“Actuarially Managed Company” and Strategic Pivot** Faced with tightened capital constraints and sluggish business growth, China Post Life did not choose to stand by in 2025, but instead initiated profound adjustments in personnel structure and product strategy. **First, personnel defense shift: actuaries move to the fore.** In June 2025, China Post Life announced a personnel change—Chief Actuary Jiao Feng was approved as CFO. It’s not standard practice for the chief actuary to also be CFO in insurance companies. This arrangement reflects a shift in company governance from accounting focus toward actuarial management. A non-bank securities analyst stated that, as interest rate differential risk becomes the industry’s focus, appointing executives with actuarial backgrounds to oversee finance board control is intended to strengthen root governance of the balance sheet. This means every new business line must pass capital consumption tests via actuarial models, not just meet premium scale. The analyst commented, “A change in calculation method signals, to some extent, that China Post Life aims to restore endogenous momentum for improving adequacy.” At the same time, former Chief Risk Officer Liu Jincheng became Board Secretary. This adjustment brings risk control authority into board decision-making, showing high vigilance toward compliance during business transformation. These management changes send a clear signal: China Post Life is moving away from past sales-driven inertia, pivoting toward a steadier, value-focused path. **Second, strategic transition: the inevitable route to promoting participating insurance.** On the product side, China Post Life executed a tactical shift from fixed to floating products. Over the past few years, incremental whole life and other fixed-income products led bancassurance channels, promising inflexible payouts to clients and consuming massive capital. Data from 2025 shows China Post Life’s participating insurance premium proportion increased significantly. Vigorously promoting participating insurance introduces risk-sharing: when investment returns fluctuate, the insurer can adjust payout levels, passing some investment risk to clients, reducing fixed liability costs and conserving core capital. Though this transition can cause volatility in premiums short term due to customer acceptance issues, it is an unavoidable solution for mitigating interest rate differential losses and optimizing capital structure long-term. For China Post Life, 2025 is a period of severe friction between old and new drivers. Accounting swings in actual capital, slowed bancassurance growth, and surrender pressure from legacy business—a result of industry downcycles and company-driven transformation—mean bank-affiliated insurers used to “harvesting” via their parent bank outlets must get used to “hard-fought” competition in a new era. In this contest of capital and survival, every pivot by China Post Life as the bank-affiliated leader redefines the true water level for bank-affiliated insurers in the second half. Risk Warning and Disclaimer Markets have risk, investments require caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial status, or needs of any particular user. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their circumstances. If you invest based on this, you do so at your own risk.