【2025 Bonus Payout Ratio】Compare insurers’ bonus payout ratios in one article

The Insurance Authority introduced a cap on the projected returns shown for participating policies from July this year, with Hong Kong dollar-denominated products proposed to be capped at 6%, and non-Hong Kong dollar-denominated products at 6.5%. In the past, intermediaries in the market would often promote participating products (such as savings insurance) as offering high returns, but in fact these are projected returns, comprising both guaranteed and non-guaranteed returns, with the latter subject to uncertainty. The Insurance Authority’s move aims to curb insurers from exaggerating projected returns. But can insurers actually deliver on these projected returns? Before taking out a policy, consumers need to understand the insurer’s published “Fulfilment Ratio”.

The Fulfilment Ratio reflects an insurer’s past performance in distributing non-guaranteed benefits. The closer the ratio is to 100%, the more closely the non-guaranteed benefits align with the insurer’s projections at the point of sale. This article will compile the performance of the Fulfilment Ratio for 16 insurers in Hong Kong. Faced with complex Fulfilment Ratio data, how should readers interpret it? The following sections explain it one by one.

The main non-guaranteed benefits comprise three types of bonus, namely reversionary bonuses, terminal bonuses and special reversionary bonuses. Their declaration timing, underlying investment strategies and the capital requirements imposed on insurers differ significantly. As participating policies on the market are positioned differently, some focus on terminal bonuses while others highlight reversionary bonuses. 10Life has further refined its scoring criteria and methodology to list, bonus type by bonus type, the bonus fulfilment ratio for each category. Policyholders can refer to this according to the bonus structure of their preferred participating products.

Unlike insurers’ websites, which list the yearly bonus performance of each participating policy and generate a large volume of data that is inconvenient for the general public to analyse, 10Life calculates the average bonus fulfilment ratio for each insurer and its data distribution (including the highest and lowest values, as well as the proportion above a 70% bonus fulfilment ratio), making it easier for everyone to grasp the overall bonus picture. 

At present, insurance companies and insurance agents are actively promoting participating policies that primarily distribute terminal dividends. These policies often accumulate substantial terminal dividends over the long term, and insurers may also invest more heavily in growth assets such as equities to achieve higher long-term potential returns.

Terminal dividend refers to a type of non-guaranteed dividend paid by the insurer to the policyholder in a lump sum when the policy terminates, for example upon death, surrender, or maturity. The insurer will set out the terminal dividend for that year in the annual statement, and the amount of terminal dividend distributed each year is determined by a range of factors, including investment performance and operating expenses. As a result, terminal dividends can rise or fall, and the actual amount received is usually only known at the very last moment. 

As terminal bonuses are paid out upon policy surrender, they are not included in the dividend realisation rate data if no policy is surrendered in a given year. Given that the Insurance Authority only requires insurers to report dividend realisation rates for policies issued from 2010 onwards, the longest available track record is currently for policies issued 14 years ago. However, for participating policies with a long term, surrendering now is actually still relatively “early” — and in many cases, the policy has not yet broken even — so there are in fact not many policyholders surrendering at such an early stage. Moreover, expected bonuses in the early years of a policy are relatively small, so it is comparatively easier for insurers to meet their dividend realisation rates, and some even exceed the target (above 100%). Table 1 shows that the average dividend realisation rates of insurers are all above 75%. Of course, as the policy term lengthens, the expected bonuses in the future become higher and higher, so it becomes more difficult for insurers to maintain a high dividend realisation rate.  

In the past, many insurance companies have launched participating policies that focus on annual dividends, enabling policyholders to continue sharing in bonuses even in the earlier years of the policy. Annual dividend, also known as cash dividend, is distributed by the insurance company to the policyholder every year, much like a dividend. The amount already distributed usually does not change. Under the policy terms, policyholders may choose to withdraw the policy dividends or leave them in the policy account to accrue interest. The feature of this type of dividend is relatively high liquidity, with annual payouts, and withdrawals will not affect the policy’s guaranteed cash value.

Even though there are not many savings insurance plans currently marketed on the basis of annual bonuses, annual bonuses are distributed every year, and insurers are required to publish the relevant bonus fulfilment ratios annually. As a result, Table 2 contains more data points, allowing policyholders to observe insurers’ performance in consistently distributing bonuses in the early years. Table 2 shows that Fubon Life, China Taiping, and YF Life achieved average bonus fulfilment ratios of 103%, 100% and 97% respectively, while their lowest bonus fulfilment ratio data points were also 80% or above. 

In recent years, some participating policies have paid out Reversionary Bonus. Reversionary Bonus is declared annually and, once declared, its “face value” will not change. It is permanently added to the life sum assured and will be paid out together upon the insured’s death. However, the cash value of Reversionary Bonus remains non-guaranteed, and if the policyholder surrenders the policy, the insurer may pay out at a discounted value. 

At present, there are fewer data points for reversionary bonuses than for annual bonuses and terminal bonuses, as there are only a limited number of relevant products and the accumulation periods are also shorter. As shown in Table 3, most insurers, including AXA Hong Kong and Macau, China Taiping, Chubb Life, CTF Life, and Sun Life, have average bonus fulfilment rates of 95% or above, and their lowest bonus fulfilment rate data points are also 80% or above.  

Of the fulfilment rates for the above three types of bonuses, the fulfilment rate for annual bonuses has been somewhat uneven, whereas the fulfilment rates for terminal bonuses and reversionary bonuses have been better, which is related to the nature of the bonuses.

First, terminal bonuses are paid in a lump sum when the policy ends. The expected terminal bonus for savings insurance typically grows larger over time. Relatively speaking, the expected terminal bonus in the early years of a policy is not very high. However, the publicly available data on fulfilment rates currently only spans a little over 10 years, so it is short- to medium-term data, which makes it easier for insurers to meet bonus payout expectations.

As for reversionary bonuses, once an insurer announces a payout, the bonus is permanently added to the policy’s guaranteed death benefit and guaranteed cash value, and cannot be revoked. As such, the amount will not be adjusted in line with market fluctuations as terminal bonuses are. Given the limited data points for relevant products at present, and the fact that the policies are still at an “early” stage, the bonus performance of most products is quite ideal.

By contrast, annual bonuses are paid out every year. Once declared, they become “guaranteed”, requiring insurers to hold sufficiently stable assets to meet that expectation. The underlying investments are usually still tilted towards more conservative assets such as bonds, so their fulfilment rates should in theory be relatively stable. However, insurers generally need to continue paying bonuses to all policyholders every year, unlike terminal bonuses which are paid only upon surrender, so it is more difficult to maintain a high fulfilment rate for annual bonuses over time.

When comparing savings insurance products, consumers should first understand the product’s bonus structure and positioning, and then “match the product to the right category”, using the insurer’s bonus fulfilment performance on similar products as a reference. 

What data does 10Life use to calculate bonus fulfilment rates?

According to the IA’s guidelines, from 2024 onwards, insurers must publish bonus fulfilment rates before 30 June each year. 10Life collected 2024 bonus fulfilment rate data earlier, covering 20 insurers, 4,013 data points and 852 participating products. In view of insufficient data points for some insurers, to ensure the data is representative, 10Life focused its analysis on insurers that are better known in the market.

10Life currently uses data across all policy durations to analyse bonus fulfilment rates.

Why does 10Life use the average bonus fulfilment rate of an insurer, rather than the median?

Unless specifically required or there is a sufficient reason to do otherwise, data analysis usually tends to use the “average” rather than the “median”. The “median” is only suitable when the data distribution is severely skewed and the “average” is no longer representative.

Why are company bonus fulfilment rates calculated on an insurer basis, rather than by individual product?

Regulators require insurers to disclose bonus fulfilment rates so that consumers can understand an insurer’s historical performance in paying non-guaranteed benefits, as a reference when purchasing insurance products. Insurers publish bonus fulfilment rates product by product, but participating products are frequently updated and replaced. In addition, earlier rules did not require the disclosure of bonus fulfilment rates for longer policy terms, so many insurers choose not to disclose data for older products, while new products show only the data for the first few policy years, which cannot reflect the product’s long-term bonus fulfilment performance. Therefore, 10Life uses the insurer as the unit of analysis to assess an insurer’s overall fulfilment of non-guaranteed returns. 

 Some insurers publish total return rates. Compared with bonus fulfilment rates, is the total return ratio a better reference indicator?

Bonus fulfilment rates only reflect the actual payment of “non-guaranteed returns”. The total return of a participating policy comprises “guaranteed returns” and “non-guaranteed returns”. As insurers are required to pay the “guaranteed returns” (unless the insurer becomes insolvent), even if the actual “non-guaranteed returns” do not meet the originally expected figures, the “guaranteed returns” may increase the total return rate.

Compared with “non-guaranteed returns”, some products have a higher proportion of “guaranteed returns”. In such cases, receiving a lower bonus fulfilment rate does not necessarily mean the product’s overall total return is poor; the total return rate may better reflect the product’s overall return performance than the bonus fulfilment rate.

Therefore, consumers should pay attention to the proportion of guaranteed and non-guaranteed bonuses in participating products, and refer to both bonus fulfilment rates and total return rates. 

Can bonus fulfilment rates predict the future?

Bonus fulfilment rates only reflect historical data, and past data cannot predict the future; it should only be used as a reference. An insurer’s actual bonus payment situation is affected by market fluctuations, the company’s investment performance and the policy’s bonus policy.

What are the limitations of bonus fulfilment rates?

The bonus fulfilment rates above are based on the data currently disclosed by insurers, but this disclosure is not comprehensive, resulting in the following limitations:

• Insurers do not publish the expected bonus amount for a product in a policy year, nor do they disclose the product’s sales share. Therefore, the current bonus fulfilment only reflects the average and stability of participating products’ bonus fulfilment rates, and cannot be weighted according to factors such as actual annual payouts or product circulation.
• Under the rules, insurers are required to disclose bonus fulfilment rates from 2017 onwards, applicable to participating products issued from 2010 onwards and which have had new policies issued within the last five years. However, participating products are long-term financial planning tools, and meaningful non-guaranteed bonuses are generally only realised 20 or 30 years after a policy takes effect, or even later. The current data cannot reflect long-term bonus fulfilment.
• Some insurers combine products in different currencies when disclosing bonus fulfilment rates, and the 10Life team is unable to distinguish bonus fulfilment rates by policy currency. This not only reduces transparency, but also increases the difficulty of analysis. We recommend that insurers standardise the presentation of bonus fulfilment rates. For example, when participating policies involve different currencies, they should report them separately by policy currency. 

Why did 10Life establish a Stable Bonus Fulfilment Company Rating?

The IA requires insurers to publish bonus fulfilment rates by June each year. However, the timing of data updates varies between insurers, and because participating products involve different currencies and bonus categories, the presentation is complex and difficult for the general public to understand. Therefore, 10Life’s actuarial team applies a unified standard to consolidate a large amount of data and rate each insurer, while also taking into account the insurer’s experience factor, awarding the “Stable Bonus Fulfilment Company” rating to insurers that perform better than the market, making it easier for consumers to understand.

The company bonus fulfilment score depends on the following factors:

• Bonus performance, including average and distribution

When calculating the company bonus fulfilment score, 10Life considers all bonus fulfilment data published by the insurer, calculates the insurer’s average and the proportion of bonus fulfilment rates reaching 70%, and identifies insurers whose average bonus fulfilment rates are better than the market and whose performance is stable.

• Experience factor

Insurers have different lengths of operation and levels of experience in Hong Kong. For insurers with fewer bonus fulfilment data points, 10Life applies different adjustment factors to adjust the impact of the experience factor on an insurer’s bonus performance.

Will an insurer get a higher bonus fulfilment score if it has a partnership with 10Life?

10Life conducts research and scoring on bonus fulfilment rates to improve transparency and educate the public. It has not received any money and has not shown bias towards any insurer because of any partnership. At the same time, 10Life continues to publish its scoring methodology for public review and discussion. 

10Life collects market information, consolidates and analyses insurers’ bonus fulfilment rates, enhancing the transparency of participating products. During the process, we found that the existing information is still insufficient. 10Life will recommend that the regulators and insurers strengthen disclosure, with the hope of further improving the rating criteria and providing more accurate and in-depth analysis in future. 10Life also welcomes suggestions from the industry and consumers, working together to enhance transparency in insurance and increase public confidence in insurance.  

Note:
Last updated: 8 December 2025.
1. The above table analyses the bonus fulfilment rates up to the 2024 financial year.
2. The above information is provided by 10Life.  

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.