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<Research>Guosen Securities Suggests Lower CN Life Insurance Preset Interest Rates May Reduce Insurers' Rigid Liability Costs, Recommends Focusing on Ping An, CPIC, AIA, China Life
Last Friday (25th), the Insurance Association of China (IAC) organized a 2Q25 meeting of the Expert Advisory Committee on the Assessment of Liability Reserve Rates for the life ins...
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<Research>Guosen Securities Suggests Lower CN Life Insurance Preset Interest Rates May Reduce Insurers' Rigid Liability Costs, Recommends Focusing on Ping An, CPIC, AIA, China Life
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Last Friday (25th), the Insurance Association of China (IAC) organized a 2Q25 meeting of the Expert Advisory Committee on the Assessment of Liability Reserve Rates for the life insurance industry, Guosen Securities mentioned in a report. The meeting focused on the macro situation, market interest rate trends, and industry development.

Insurance industry experts believed that the current research value for the predetermined interest rate of ordinary life insurance products is 1.99%, triggering the first adjustment of the predetermined interest rate in the life insurance industry this year.

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According to announcements from China Life and Ping An, the companies adjusted the maximum predetermined interest rates for newly filed insurance products. For ordinary insurance products, the maximum predetermined interest rate is 2.0%, for participating insurance products it is 1.75%, and for universal insurance products, the minimum guaranteed interest rate is 1.0%. The product adjustment deadline is August 31, 2025.

The broker assumed that the industry has multiple catalysts such as short-term premium income surge, narrowing interest rate spread risk, and improved investment return expectations, combined with increased market risk appetite, benefiting the valuation of Chinese insurance stocks.

In the short term, the reduction in predetermined interest rates is expected to initiate a new round of speculation of sales discontinuation, benefiting the spike in premiums, particularly for participating insurance. In the long term, dynamic adjustments to predetermined interest rates will immensely optimize the pricing rate regulation mechanism for life insurance products, improve the efficiency of industry rate adjustments, and reduce insurers' rigid liability costs.

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The broke recommended focusing on companies with strong comprehensive capabilities on the liability side, such as PING AN (02318.HK)  -1.050 (-1.946%)    Short selling $928.57M; Ratio 22.144%   , CPIC (02601.HK)  -0.900 (-2.844%)    Short selling $60.78M; Ratio 6.859%   , AIA (01299.HK)  -2.050 (-2.793%)    Short selling $188.92M; Ratio 11.241%   , and CHINA LIFE (02628.HK)  -0.600 (-2.637%)    Short selling $740.74M; Ratio 24.832%   .
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-08-01 16:25.)

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