Yuanbao in the Age of AI Surge: Targeting the Elderly Under the Guise of Inclusive Insurance?

The more they earn, the greater the controversy.

Recently, Yuanbao (NASDAQ: YB), an internet-based insurance company, released its Q4 2025 and full-year financial performance report.The financial report shows that Yuanbao's revenue in 2025 was RMB 4.373 billion (unit: RMB, same below), a year-on-year increase of 33.1%; net profit reached RMB 1.308 billion, growing 51% year-on-year, with the profit margin increasing to 29.9%.

In terms of primary revenue sources, Yuanbao's insurance distribution service income in 2025 was RMB 1.447 billion, up 33.8% year-on-year; system service revenue amounted to RMB 2.923 billion, marking a 33.2% year-on-year growth. As of December 31, 2025, Yuanbao’s cash reserve reached RMB 4.04 billion.

Yuanbao's record-breaking performance stems from its continued focus on data models and technological capabilities, as well as the strengthening of its consumer lifecycle service engine. However, when shifting our focus from the glossy financial figures to media reports, consumer complaint platforms, and even notices from local regulators, Yuanbao is no longer seen as an innovative example of 'technology for people,' but instead has become a 'predatory entity' targeting countless users, particularly the elderly population.

As of March 24, searching for 'Yuanbao' on the Black Cat Complaints platform yielded 1,219 complaints under the merchant section, primarily focusing on issues such as 'unauthorized deductions,' 'misleading consumption,' and 'coerced insurance purchases.'

The contradictory reality of Yuanbao's 'two-faced world' lies in how AI technology, which should enhance service efficiency and transparency, has been distorted into a tool for exploiting users under the sole pursuit of performance and profit."Inducement ads" are disguised as "smart recommendations," and "automatic deductions" are beautified as "convenient services"... These have become the "hidden corners" behind the growth of this internet insurance company.

As of the close of US stocks on March 24, Yuanbao closed at $17.26 per share, down 2.49% from the previous day, with a total market value dropping below $800 million to $795 million.

Earnings Highlights: AI-Driven Growth Flywheel

Yuanbao, as a licensed internet insurance technology company, operates by using big data and AI technologies to provide consumers with distribution and services for personal life and accident health insurance products through its self-operated platform. It covers the entire process of insurance consumption, including personalized recommendations, purchases, policy management, claims, and after-sales service.

At a time when the industry is generally facing growth bottlenecks, Yuanbao achieved double-digit growth in both revenue and profits in 2025, with net profit margins remaining around 30%. This growth momentum mainly comes from its self-developed "full consumer service cycle engine" and its development and application of large artificial intelligence models. The engine deeply integrates media, user, and product networks, achieving end-to-end digital operations from precise outreach, intelligent matching, to efficient service.

As of December 31, 2025, Yuanbao's model library has expanded to 4,900 models and 5,700 features—based on these model networks, Yuanbao can run a wide range of scenarios, from initial user targeting and acquisition, sales conversion, to after-sales service, continuously optimizing service paths for each potential customer, embedding AI technology across the entire chain of customer acquisition, underwriting, and claims processing.

Specifically, on the product side, through analyzing user behavior data, it meets the segmented protection needs of different groups. For example, Yuanbao launched popular products such as "zero-deductible million-dollar medical insurance," "$100 critical illness insurance," specific disease insurance for women, "Work Peace of Mind Insurance" that relaxes occupational restrictions for new urban residents, and even cancer insurance for the elderly group, available up to age 80.

In terms of user reach, Yuanbao leverages AI and the internet’s broad coverage, low cost, and intelligent capabilities to break through traditional channel limitations, reaching more remote areas and broader markets, allowing users to "buy what they need" and enhancing the accessibility of protection. It then relies on thousands of media, user, and product models to precisely match these products to the right audience, ensuring that "the right products find the right people."

On the service side, Yuanbao embeds technology into the entire claims process, launching a "one-click upload" feature that automatically identifies and matches documents, significantly reducing users' time costs. According to the "Yuanbao 2025 Claims Annual Report," the fastest claim resolution time for its medical insurance was reduced to 3.4 minutes.

Looking at the overall internet insurance industry, companies now largely operate under the "AI + Insurance" model, highly digitizing, automating, and personalizing the entire business process of insurance sales. This ultimately transforms the traditional human-resource-driven sales model into an AI-driven one, improving the experience and efficiency of insurance sales and services. The difference lies only in each company's first-mover advantage and technical level.

Yuanbao Group's founder and CEO, Fang Rui, has publicly stated that the internet will become the main battleground for insurance companies to acquire customers in the future, and it will also become one of the primary channels for obtaining premium income. Through continuous investment in big data and AI, Yuanbao has used technology to lower operational costs, improve user experience, and generate a steady stream of new policies. Financial reports show that Yuanbao issued 30.7 million new policies in 2025, representing a year-on-year increase of 36.7%.

[Image / Founder and CEO of Yuanbao Group, Fang Rui]

Notably, Yuanbao's sales and marketing expenses reached 2.217 billion yuan in 2025, accounting for 73.02% of total operating costs and 50.7% of total revenue.This also indicates that aside from efficiency improvements brought by technology, Yuanbao's business growth currently still heavily relies on sales expense-driven strategies, particularly the need to seize traffic entry points through large-scale investments and guide users to the platform to complete conversions.

Hidden Perspective: Algorithmic Targeting and 'Elder-Trapping'

The growth in Yuanbao’s revenue and profit can be attributed to AI as its 'face' presented to the capital markets, while aggressive marketing strategies and the resulting compliance complaints are its hard-to-conceal 'underbelly'.

Statistical data released by CNNIC shows that as of December 2025, the internet usage rate among people aged 60 and above in China was 53.7%, with an overall scale reaching 173 million. Due to generally insufficient online experience, weaker risk awareness, and deteriorating physical functions such as vision and cognitive abilities, elderly individuals are more vulnerable to various online consumption traps. According to the '2025 Manual for Preventing Telecommunication and Internet Fraud' published by the Ministry of Public Security, losses from 'false investment and financial management fraud' account for about one-third of all telecommunication fraud losses, with middle-aged and elderly groups over 50 being key targets for fraud gangs.

In the field of internet insurance, platforms' algorithms seem to have a particular 'preference' for the elderly. They exploit older adults’ price sensitivity, unfamiliarity with technology, and weak understanding of insurance terms by pre-selecting options like 'automatic renewal' and 'password-free payment' on product purchase interfaces. Critical information such as 'unsubscribe,' insurance terms, and subsequent premium standards is hidden in obscure corners, with related buttons designed extremely small or without prominent notifications, whereas 'confirm insurance purchase' is enlarged and highlighted. This approach of exploiting the 'digital divide' to trap the elderly not only violates business ethics but also crosses legal boundaries.

This month, multiple media outlets reported consumer rights protection cases involving elderly individuals who were misled into purchasing insurance after accidentally clicking on mobile ads, raising questions about the marketing tactics of certain insurance platforms.

[Image/Multiple media reports on the rights protection case of an elderly person who mistakenly purchased insurance]

According to a report by the Xi'an Daily, a 60-year-old man was induced to click by a mobile phone pop-up advertisement. Without his knowledge or active confirmation of insurance, he purchased a million-yuan medical insurance policy that automatically renewed for over a year, with cumulative deductions exceeding 2,000 yuan as of February 2026. Ms. Xiao, the man's daughter, repeatedly contacted Shouxin Insurance Agency (Guangdong) Co., Ltd. (hereinafter referred to as "Shouxin Insurance"), hoping to recover the premium, only to be told that the 2025 premium could not be refunded due to the policy's expiration and that only this year’s fee could be returned.

A report by Guangxi News Channel also mentioned that since last September, a 69-year-old citizen of Nanning has frequently received bank card deduction messages on their mobile phone, with amounts ranging from two to three hundred yuan to over six hundred yuan. Upon inquiry at the bank, it was found that since September of the previous year, they had unknowingly purchased three insurance policies, with these charges deducted through Shouxin Insurance’s “password-free payment.” The citizen stated that they had never purchased insurance on any online platform, but customer service explained that the system showed that either the citizen or a family member clicked on an ad link while using the app, completed the insurance process, and activated the “automatic payment” feature.

【图/首信保险扣款页面截图】

Baiyu Public Security Bureau recently published a message stating that herders were inadvertently misled into clicking links while operating smartphones, unknowingly activating six medical insurance policies under an app called “Yuanbao,” resulting in continuous automatic deductions totaling more than 5,000 yuan over three months, forcing them to seek help from police officers.

Data from Qichacha shows that Shouxin Insurance is controlled by Muyi Health (Beijing) Technology Co., Ltd., which is wholly owned by Yuanbao Digital Technology (Beijing) Co., Ltd. On the Black Cat Complaints Platform, Shouxin Insurance has 141 complaints, mainly focusing on issues like “unauthorized signing” and “unauthorized automatic deductions.” Through equity penetration, it is revealed that Yuanbao’s CEO, Fang Rui, is the actual controller of 23 companies, including Muyi Health, Fumin Insurance, Yuanbao Insurance Brokerage, Shouxin Insurance, and Yuanbao Digital Technology.

[Image/Companies under Yuanbao displayed by Qichacha]

Previously, media reports indicated that in March 2022, Yuanbao was fined 10,000 yuan and issued a warning by the former China Banking and Insurance Regulatory Commission’s Shaanxi Regulatory Bureau for failing to conduct internet insurance brokerage business according to regulations. In November 2024, in the Gansu Consumer Association's announcement of typical consumer complaint cases, Yuanbao Insurance Brokerage (Beijing) Co., Ltd.’s Guangxi branch was criticized for infringing upon consumers' fair transaction rights.

However, Yuanbao's issues are not isolated incidents. Media reporters have found that such “hidden deduction” tactics are quite covert, with some platforms packaging insurance products as “free gifts,” “1 yuan for the first month,” or “just a few dollars per month,” making them highly enticing advertisements. After clicking on a “free gift” link on one platform, the middle of the page read “1 million accidental injury coverage,” requiring only the input of name and ID number to “receive it for free.” Following the prompts, the interface would redirect to WeChat's automatic renewal; agreeing and enabling would grant the “free benefit.” Throughout this process, detailed insurance types, premium amounts, exclusions, transfer authorization, and other “important notices” were placed in inconspicuous positions on the page, with small fonts easily overlooked.

These issues also expose a profound contradiction: Yuanbao’s claim of “AI inclusiveness” runs counter to its actual marketing logic. Its advanced AI technology, intended to enhance insurance accessibility, has been distorted into a tool for “precise harvesting”: 4,900 AI models are used not just for product matching but also to screen “less tech-savvy, low-rights awareness” elderly users, treating them as “high retention rate, low complaint cost” quality traffic. This illicit operation under the guise of “technology for good” creates a sharp value conflict—AI should lower insurance barriers, yet it becomes a means to amplify information asymmetry; inclusive insurance should protect vulnerable groups, but instead turns into a tool for extracting wealth from the elderly.

In response to these online consumption traps targeting the elderly, at this year’s National People's Congress, national representative Dai Yin called for stronger regulation by the Ministry of Industry and Information Technology, the State Administration for Market Regulation, and other departments. She suggested ensuring the transparency of deduction information and standardization of deduction procedures, strengthening the security management of password-free payments and automatic renewals, requiring multi-level verification for elderly users, especially not offering functions like “password-free payment,” “automatic renewal,” or “use now, pay later” to those over 70 years old. Additionally, there should be strict control over associated online illegal activities such as pop-up ads and misleading downloads.

The Path to Compliance: Radical Reforms Amid a Period of Growth Opportunities

Currently, the internet insurance sector where Yuanbao operates is enjoying unprecedented market and policy-driven growth opportunities.

On one hand, from the market perspective,In recent years, several internet insurance companies have sparked an IPO wave, drawing significant attention in the capital markets. Meanwhile, the penetration rate of online insurance sales remains far below that of online retail sales. According to Frost & Sullivan, China’s online insurance sales penetration rate will increase from 12.3% in 2023 to 30.2% by 2028.

On the other hand, from the regulatory perspective,2026 marks the beginning of the '15th Five-Year Plan,' with this year's Government Work Report mentioning insurance 13 times. The introduction of the first 'Commercial Insurance Innovation Drug Catalog' has opened new growth avenues for commercial health insurance. Furthermore, deepening and expanding 'AI+', alongside promoting the commercial-scale application of artificial intelligence in key industries, will allow 'AI + Insurance' to fundamentally reshape service models, improve operational efficiency, and become a new driver for industry development.

However, it is important not to overlook that the insurance industry is also facing stringent regulatory scrutiny and stronger compliance requirements.While the state encourages the use of artificial intelligence and big data technologies to enhance marketing and service levels in the insurance industry, it also emphasizes the need to continuously refine the regulatory framework, strengthen controls over sales practices, protect consumer rights, and manage intermediary channels. The new 'Ten National Guidelines' for the insurance industry particularly stress the importance of 'actively fostering an insurance culture with Chinese characteristics, shaping a trustworthy, reliable, and customer-centric image for the insurance sector.' This essentially places higher demands on insurance platforms: technology must not only serve growth but also foster trust.

To improve efficiency through AI and ensure compliant development, internet insurance companies should adopt radical reforms to break through current challenges. First, they should reform their marketing models by applying AI technology to compliance reviews, ensuring that advertising language is clear and transparent, especially for critical information such as 'automatic renewals' and 'password-free payments,' which should be prominently highlighted. Second, they should leverage technology to enhance the service experience; while AI improves claims processing efficiency, it should also optimize complaint handling mechanisms and establish fast response and refund channels, rather than waiting for regulatory intervention or media exposure before resolving issues. Lastly, they should explore high-quality growth opportunities. With the implementation of integrated 'medical + commercial insurance' settlement and the launch of the innovation drug catalog, inclusive health insurance still holds vast untapped potential. Internet insurance can use its technological and data advantages to develop truly differentiated products that address user pain points, rather than relying on a crude growth model of 'low-cost customer acquisition and automatic deductions.'

It can be said that with the support of AI, the insurance industry will enter a new phase of vigorous development.Enterprises capable of long-term development will surely rely on AI, big data, and high-quality services to build core barriers, such as achieving more accurate risk pricing, more efficient claims services, and more personalized product designs; the integration of technology into the entire insurance process will form a smart closed loop, with AI being the core engine driving this integration. At the same time, ecosystem-based and inclusive approaches will become mainstream. Leading enterprises will establish open ecosystems for mutual benefit, while insurance will also leverage AI to reach previously underserved users in下沉 markets and those with health anomalies. As an increasing number of consumer groups enjoy more comprehensive risk protection solutions beyond medical insurance, companies themselves will achieve sustainable and healthy growth.

Conclusion

Through Yuanbao's 2025 financial report, we can see both the rapid growth of China’s InsurTech sector and the continued presence of dependency on unregulated growth models and consumer pitfalls. The essence of Internet insurance should be utilizing technology to make insurance more inclusive, transparent, and empathetic, rather than creating new consumer traps that deter people.

For Yuanbao, whether it can hone a compliant and gentle glow on the sharp edge of AI will determine whether it becomes the 'leader' in InsurTech or merely a fleeting 'harvester.' This remains to be further verified.

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