Driven by aging demand and policy dividends, AIA Group is stepping up its investment in the Mainland China market

Ask AI · Why does AIA’s bancassurance channel growth not conflict with the agent channel?

In 2026, the year marking the start of the “14th Five-Year Plan,” China’s life insurance industry stands at a critical juncture transitioning from scale expansion to high-quality development. As one of the earliest foreign insurance companies to benefit from the opening of the financial industry, AIA Group has long regarded the Mainland Chinese market as its most important market.

Recently, in an interview with First Financial reporters about 2025 performance, AIA Group CEO and President Lee Yuanxiang and AIA Regional CEO and Chairman of AIA Life Zhang Xiaoyu stated that despite facing downward pressure on interest rates, the opportunities in China’s life insurance industry far outweigh the challenges, driven by factors such as exploding aging demand and favorable policies.

Based on this, AIA Group is further increasing its focus on the Mainland Chinese market. The expanding business areas under policy “favorable winds,” the newly established wholly foreign-owned insurance asset management company, and the rapidly growing bancassurance channel together outline the company’s new strategic priorities in China.

Opportunities in Mainland China Far Outweigh Challenges

Performance data shows that AIA Life’s wholly owned subsidiary in China achieved a new business value of $1.2 billion in 2025, with over 20% growth in the first two months of 2026.

“Mainland China is the most important market for AIA Group, and I can very clearly tell everyone that as the Group CEO. Whether in terms of future growth potential or contribution to the Group, I believe it ranks first within the Group,” Lee Yuanxiang repeatedly emphasized in the interview.

This important position undoubtedly stems from AIA Group’s optimistic outlook on the future development opportunities of China’s life insurance industry.

In Lee Yuanxiang’s view, although the current Chinese life insurance industry still faces challenges such as declining interest rates and deep transformation, from a longer-term perspective, “the opportunities far outweigh the challenges.”

Both in this year’s government work report and the “14th Five-Year Plan” outline, commercial insurance, as an essential part of the multi-layered social security system, has been mentioned multiple times, and industry development is highly anticipated during the “14th Five-Year Plan” period. Some analysts believe that China’s life insurance industry is entering a golden development period.

“‘14th Five-Year Plan’ is an important initial stage for China to basically achieve modernization by 2035, and it also marks a critical period for the transformation of the life insurance industry from scale expansion to high-quality development,” Zhang Xiaoyu further analyzed for reporters the three core opportunities for the life insurance industry during the “14th Five-Year Plan”: under the backdrop of an aging population, the demand for health and pension security continues to grow; residents’ risk awareness and wealth structure are constantly optimizing, leading to a significant increase in demand for long-term, stable protection products and professional services; the role of insurance in serving the real economy, supporting green and low-carbon development, and social governance is further strengthened.

Of course, for foreign insurance companies like AIA Life, the vast development space in Mainland China is also reflected in the regional expansion dividends brought by further opening up the financial industry.

Taking advantage of China’s further opening of the financial sector, from 2019 to last year, AIA Life established branches in nine provinces in Mainland China, increasing its operational regions from five before obtaining independent legal entity status to the current 14. According to annual reports, the new business value in these nine new regions in 2025 grew by 45%, contributing 9% to AIA Life’s new business value. From 2025 to 2030, AIA Life expects the compound annual growth rate of new business value in new markets to reach 40%.

Meanwhile, at the end of December last year, AIA Asset Management officially received approval to operate, becoming Shanghai’s first wholly foreign-owned insurance asset management company. “Separating asset and liability management is actually a more professional management and operation model. We adopt the same model in markets like Singapore, Hong Kong, the Philippines, and Thailand,” Lee Yuanxiang said. Establishing an independent asset management company not only helps attract high-quality investment talent but also allows the group’s trust center to conduct more unified governance, guidance, and risk control over asset management operations, improving operational efficiency; it also increases the flexibility of investment products, with future plans to retain the flexibility to issue asset management products.

Individual Insurance as the Main, Bancassurance as Supplement

How to seize the future opportunities in China’s life insurance industry? Zhang Xiaoyu said that the future development goal of insurance companies should not be solely to pursue scale growth, but to pursue high-quality, differentiated, and disciplined growth. In the view of AIA management, these development goals will ultimately be reflected in specific products, channels, and services.

In terms of products, protection-type products remain at the core of AIA Life’s product layout. Annual report data shows that in the second half of 2025, 44% of the new business value from the agent channel was contributed by protection products.

As for channels, industry consensus has been formed: as the life insurance industry shifts from “mass tactics” to “value-driven,” building a high-quality, differentiated multi-channel matrix has become an inevitable path for insurers to cycle through. Many insurers that previously relied entirely on individual agent channels have recently begun to heavily develop bancassurance channels, with some new premium income from bancassurance surpassing that of their traditional individual channels.

AIA Life’s bancassurance channel also shows rapid growth. Annual report data indicates that over the past three years, the growth rate of new business value from the bancassurance channel has exceeded that of the agent channel, with a contribution rate of 15% in 2025. Lee Yuanxiang explained that the reason for the higher growth rate in bancassurance is simple: it is a newly launched business with a lower base. The confidence in developing bancassurance comes from China’s policy commitment to promote healthy development of the channel, including measures like “integrated reporting and banking,” which has transformed the market. “Three years ago, the new business value rate for bancassurance could be as low as 1-2%, but now, under our differentiated model, it has increased to 35%.”

Zhang Xiaoyu further elaborated on AIA Life’s differentiated strategy for bancassurance. He said that AIA Life refuses to adopt a “shelf-style” distribution model and instead focuses on deep engagement with specific banks targeting high-net-worth clients. “Bancassurance is based on shared values and customer management.”

Although bancassurance has achieved rapid development, AIA Life remains committed to the core channel strategy of “excellent agents as the main, differentiated bancassurance as a supplement.” “I don’t believe that developing bancassurance will replace the agent channel,” Lee Yuanxiang clearly stated. AIA Life has not set specific proportion targets for bancassurance; its core positioning remains as an effective supplement to the agent channel.

From financial data, in 2025, the agent channel contributed 85% of the company’s new business value, remaining the main growth driver.

Zhang Xiaoyu said that the reason why AIA Life’s agent and bancassurance channels can form a complementary rather than a substitutive relationship lies in the obvious differences in product structure, customer groups, and customer age segments.

(This article is from First Financial)