"Migration of Funds Beneath the Bank Counter"

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In the face of changes in interest rate markets and investment environments, depositors are making their own adjustments.

In the 2025 interim reports of banks, a subtle change is taking place: customers’ money is "migrating" to insurance products.

This “migration” does not appear in prominent headlines of financial statements, but is hidden within scattered disclosures:

Some banks include an extra line in their fees as “agency insurance income,” while others casually mention “increased insurance business” under non-interest income.

Although these seem like insignificant lines, they signal a major shift—insurance is becoming the “new battleground” of bank wealth management.

Bancassurance Performance “Delivers Good News”

By reviewing the interim reports of A-share listed banks in 2025, it can be seen that bancassurance data is being brought to the forefront.

It should be noted that the disclosure standards of A-share listed banks are not uniform: some disclose “agency insurance income,” others disclose "bancassurance intermediary income," while most have not disclosed these figures.

For example, Bank of Shanghai mentioned in its interim report that both the scale and intermediary income of bancassurance have increased, with bancassurance intermediary income up 16.59% year-on-year.

Ping An Bank’s report offers a similar statement. In the first half of 2025, the bank’s wealth management fee income totaled RMB 2.466 billion, rising 12.8% year-on-year. Among this, agency personal insurance income reached RMB 666 million, a 46.1% surge year-on-year, exceeding the growth of fund distribution (4.7%) and wealth management product distribution (16.3%).

“In 2021, we initiated a new bank-insurance business reform... integrating agency insurance business into the wealth management system... paving a new runway for our private banking wealth business,” Ping An Bank wrote in its 2025 semi-annual report.

One of the larger state-owned banks, China Construction Bank, also maintained insurance income growth. In the first half of 2025, CCB’s insurance business income was RMB 2.784 billion, an increase of RMB 446 million over the same period last year.

Agricultural Bank of China did not separately disclose bancassurance and intermediary income numbers, but did state in the interim report: “(Non-interest income section) Other business income increased by RMB 1.362 billion, mainly due to a rise in insurance business income.”

Changsha Bank, as a regional city commercial bank, provided even more direct data: agency business fee income of RMB 235 million, a whopping 48.51% year-on-year growth. The interim report further explained, “Fee income growth from agency business chiefly results from the bank’s vigorous development of wealth management, increased allocation of client insurance, trust and other products, driving continuous growth of wealth management income.”

This is already enough to show that bancassurance is gradually becoming a stable pillar of non-interest (intermediary) income for various banks.

Why Is This Happening?

“Agency insurance income” or “bancassurance intermediary income” refers to the sales commissions earned by banks from acting as distribution channels for insurance companies’ products.

Since this type of income is different from interest on loans and deposits—it doesn’t require banks to take on much risk or commit large capital—it is generally classified as “intermediate business income.”

But the basis for this income is the growth in sales scale of insurance products. Thus, the increase in bank income is actually driven by hot sales in insurance products—in other words, investors are showing more favor to insurance products than before.

So, what has led to this result?

Industry opinions cite two factors. One: the continued decline in bank savings rates is prompting savings deposits to “look elsewhere,” and life insurance products, with relatively stable and higher premium and guaranteed rates than deposits, quickly receive investor attention;

On the other hand, from the banks’ perspective, in today’s volatile market, encouraging customers to buy insurance products—whose returns are not real-time quoted and have long-term stable mechanisms—makes sense. It alleviates client anxiety and earns banks fee income.

Even more interesting, some big banks focusing on wealth management are willing to “take a short-term hit”: commission income may fall, but they still strive to boost insurance sales volume, guiding clients’ funds into long-term insurance products.

Which Insurance Products Are Favored?

So, what kinds of insurance products are more popular?

We can still get some clues from bank interim data. Since reporting standards and completeness of bank disclosures vary, these represent just a “snapshot” of the whole industry.

First, long-term protection-oriented products.

For example, Citic Bank mentioned directly: in the first half of 2025, its bancassurance business reached RMB 16.264 billion, with sales of long-term protection products accounting for 64%, a ratio that has risen for six consecutive years.

So-called “long-term protection-oriented products” usually include whole life insurance, annuity insurance, and long-term health insurance, which offer not only long coverage periods but also capital accumulation and wealth management functions.

Second, personal insurance products.

Bank of Communications gave a scale-related metric: as of mid-2025, the balance of BOCOM's bancassured personal insurance products was RMB 353.53 billion, up from RMB 326.331 billion at the end of last year.

Such “balance” disclosures mean ever-larger amounts of client money are being locked into insurance products—insurance is becoming a long-term allocation option on par with mutual funds and wealth management products.

Third, exclusive insurance products.

Bank of China stated in its interim report: “Optimized an all-weather suite of exclusive private banking products, increasing the supply of insurance products for private banking clients.”

Though the description is brief, it reflects the thinking of channel clients.

Facing the Challenge of “Integrated Pricing”

As bank funds flow into insurance products, it is not without challenges; the implementation of “integrated pricing” is under close watch by bancassurance channels.

In the interim report of a joint-stock commercial bank, bancassurance data showed an interesting contradiction: agency insurance income declined, but the insurered premium amount of distributed policies rose significantly.

Noting that agency insurance premium = total insurance purchase by clients (i.e. policy sales volume), its growth indicates ever-larger client insurance purchases through those channels.

But agency insurance income = commission fees banks get from insurance distribution. Its decline means the “commission pie” for the relevant bank is actually shrinking.

So, most likely, as transparency in regulatory policy demands grows, the channel commission for insurance product sales is set to be reduced one-off, building a more objective and transparent sales environment under policy impetus.

Banks that transform early and adapt sooner may be trusted by more customers eager for investment transition.

Risk Warning and DisclaimerMarkets involve risks; investments must be made with caution. This article does not constitute individual investment advice, nor does it take into account the specific investment objectives, financial circumstances, or needs of individual users. Users should consider whether any views or conclusions in this article are appropriate to their circumstances. Investment at your own risk. ```