Many policyholders prefer purchasing dividend insurance from large companies. However, most people are unaware of these companies’ dividend fulfillment rates. To address this, we spent a week analyzing the dividend fulfillment rates of over 300 products from four major insurers—China Life, Taiping, Ping An, and Taikang—as well as the highly regarded Sino-Italian Life. Which company performs best? Let’s find out.
1. Only a Few Hundred Yuan in Dividends After Investing 150,000 Yuan? A colleague, Xiao You, shared that her mother purchased Xinhua’s Wende Fu dividend insurance in 2022 for 150,000 yuan. Initially, Xinhua’s high dividend fulfillment rate of 172% the previous year seemed promising. The bank staff even projected a maturity IRR of 3.7% with high-end dividend, suggesting an 8,000-yuan advantage over fixed deposits. However, after three years, her mother found only 2,256 yuan in dividends—averaging 752 yuan annually. The product’s dividend fulfillment rate plummeted from 172% in 2021 to 20% in 2022 and only 61% in 2024. Are large insurers’ dividend rates truly this poor? Let’s examine others. 2. How Do Major Insurers’ Dividend Fulfillment Rates Perform? For objectivity, we analyzed 10 years of data from China Life, Ping An, Taiping, Taikang, and Sino-Italian Life, covering 300+ products. Below, optimal rates (≥130%) are highlighted in orange, while secondary rates (100%-130%) are in yellow. Compiling this data was arduous—if helpful, please share it to benefit others. 1) China Life As the pioneer of dividend insurance in China (launched in 1999), China Life disclosed rates from 2013–2023. Selected products with complete data are tabulated. Overall, its rates are decent, with 1/3 exceeding 130%. However, 2018 and 2021–2023 were subpar, with 2023 at just 37%.The relatively low dividend fulfillment rates in 2023 were primarily due to declining interest rates, which reduced insurance companies’ investment returns. To mitigate operational risks, regulators introduced a “ceiling order” last year.
Regulators capped dividend yields for participating policies at 3.1% for large insurers and 3.3% for smaller ones, leading to generally lower dividend fulfillment rates in 2023. Other companies, like China Life, were similarly affected, with average rates declining. Statistics show that the average dividend fulfillment rate for 46 life insurers in 2023 was 48.3%. China Life’s average rate of 37% was slightly below this. Among 58 products analyzed, 36 achieved cumulative dividend fulfillment rates exceeding 100% over the past decade, meeting expectations. The remaining 22 fell below 100%, though most still reached above 80%. 2. Taiping Life We reviewed 68 Taiping Life products. Their dividend fulfillment rates were remarkably consistent from 2014 to 2022, with most at 100% and two at 144%. In 2023, due to the ceiling order, rates dropped to 36% across all products. The 10-year cumulative rate of 90% remains commendable, reflecting stability with minimal fluctuations. Policyholders over this period averaged close to 90% of expected dividends. 3. Ping An Life Data for Ping An Life dates back to 2015, covering 70 products. Most policies have dual accounts with varying effective dates and fulfillment rates. Rates above 130% were typically for products effective between 2002/1/1 and 2007/9/24. From 2015 to 2024, only the first four years averaged above 100%. Rates stayed above 82% from 2019 to 2023 but plummeted to 34.3% in 2024. Overall, Ping An’s rates are stable, with few extremes beyond 2024’s dip. 4. Taikang Life Taikang’s products include two account types: standard individual accounts and longevity accounts (linked to retirement communities).Taikang has only disclosed the dividend fulfillment rates from 2019 to 2024. The first four years met dividend expectations.
However, like other insurers, the average dividend fulfillment rate for 2023-2024 was slightly lower, particularly in 2024, at only 29%, which is lower than the rates of the aforementioned companies. Additionally, the dividend fulfillment rate for longevity accounts is higher than that for personal accounts, especially in 2024 when rates were generally low. Longevity accounts typically outperformed personal accounts by around 10%, and in some years, certain products even achieved a 30% higher rate. Overall, for standard policies, the situation is similar to other major insurers, with average dividend fulfillment rates exceeding expectations in earlier years. For longevity accounts linked to retirement communities, the fulfillment rates are notably higher, ranking well among major insurers. 5. Generali China After reviewing the four major insurers above, let’s examine the “top performer” in the dividend insurance sector—Generali China. Although Generali is less well-known, it is widely recognized in the industry for its excellence in dividend insurance. How does its fulfillment rate compare? Is it as outstanding as rumored? Clearly, the dividend fulfillment rates from 2013 to 2023 are impressive, with the first 10 years achieving rates above 100%. Even more remarkable is that in 2023, when other insurers averaged around 30%, Generali achieved 90%, exceeding the industry average of 48.3% by over 40%. Some may wonder: Isn’t there a cap on dividends? How did Generali achieve such high rates in 2023? The primary reason is Generali’s exceptional investment capabilities, which earned it permission to exceed the cap, allowing greater flexibility in dividend payouts. Besides Generali, Heng An Standard, MetLife, Aviva-COFCO, AIA, and Lu Jia Zui Cathay also received approval to exceed the cap. Achieving such high dividend levels in a challenging investment environment is truly outstanding. The insurers mentioned above are the focus of this analysis and can serve as a reference when purchasing dividend insurance. If you are considering products from other insurers, you can check their dividend fulfillment rates on their official websites. There are generally two ways to query this information: ① Public information disclosure → Special information → Dividend insurance ② Public information disclosure → Special information → New insurance → Dividend insurance 3. When buying dividend insurance, is it sufficient to only consider the dividend fulfillment rate? While a high dividend fulfillment rate is desirable, it should not be the sole criterion for selecting a product. The following three factors should also be considered.1. The investment capability of an insurance company is the gold standard for high fulfillment rates.
A portion of dividends comes from the insurer’s interest spread, i.e., its investment returns. Regulations stipulate that actual dividends must not be less than 70% of the distributable surplus for the year. If the insurer earns more, it must distribute more to policyholders. Higher actual dividends naturally lead to higher fulfillment rates, highlighting the importance of the insurer’s investment capability. However, in recent years, the economic environment has been unfavorable, with rapidly declining interest rates. For example, a bank’s 3-year deposit rate was 3.4% in 2023 but has now dropped to 1.8%. For the same ¥100,000, the interest shrinks by ¥4,000–5,000. Even 30-year ultra-long-term government bonds now yield only 1.88%. Since insurers primarily invest in deposits and bonds, their returns are significantly affected. With a 3% investment return, how can insurers afford dividend insurance yields above 3%? This is compounded by other substantial operational costs. To survive, insurers may reduce or omit dividends, leading to noticeably lower fulfillment rates. Given the importance of investment capability, what data can we examine? Visit the insurer’s official website to review metrics like the 3-year average comprehensive investment return rate. 2. Projected dividends may contain some exaggeration. The dividend fulfillment rate reflects how much of the projected dividend was actually paid. For example, if the projected dividend is ¥100 and the actual dividend is ¥80, the fulfillment rate is 80%. Dividend Fulfillment Rate = Actual Dividend / Projected Dividend × 100%. However, fulfillment rates are historical data and do not reflect current conditions. While projected dividends can be reviewed, they are somewhat inflated and cannot accurately predict future payouts. For instance, Products A and B project dividends of ¥100 and ¥80, respectively, but both pay ¥80. Their fulfillment rates are 80% and 100%. Product B has a higher fulfillment rate, but the actual dividends are identical. Thus, focus less on projected dividends and more on the insurer’s investment capability. 3. Policy factors: Regulatory oversight influences dividend amounts. How much of the insurer’s profits are distributed to policyholders? Sometimes, the insurer doesn’t have the final say. Even if the insurer wants to adjust payouts, it must comply with regulatory requirements. For example, under the “ceiling order,” insurers cannot excessively distribute dividends, even if financially capable, to mitigate operational risks amid potential further interest rate declines.Additionally, insurance companies employ a ‘smoothing mechanism,’ which means setting aside a portion of profits from high-earning years to distribute as dividends during years with poor investment returns, thereby reducing volatility in earnings.
In summary, when considering dividend insurance, it is essential not to focus solely on the dividend realization rate or data from a single year. Instead, adopt a long-term perspective and evaluate the insurer’s overall financial strength. 4. Final Thoughts We have interacted with numerous clients, many of whom appreciate dividend insurance, especially in the current economic climate where it is one of the few products offering returns around 3.4%. However, some individuals remain skeptical due to the perceived unpredictability of dividends. Each person’s needs and risk tolerance vary. If dividend insurance does not align with your preferences, opting for alternative financial tools is perfectly reasonable. Conversely, if it resonates with your investment philosophy, it may be worth considering.
