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<Research>Citi Expects CN Life Insurers to Benefit from Lowered Assumed Interest Rates, Anticipates Shift in Product Structure Towards Par Products to Increase Equity Investment Proportion
Last Friday (25th), the Insurance Association of China (IAC) published the research value for the upper limit of pricing interest rates for ordinary insurance products, Citi Resear...
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<Research>Citi Expects CN Life Insurers to Benefit from Lowered Assumed Interest Rates, Anticipates Shift in Product Structure Towards Par Products to Increase Equity Investment Proportion
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Last Friday (25th), the Insurance Association of China (IAC) published the research value for the upper limit of pricing interest rates for ordinary insurance products, Citi Research issued a research report saying.

The rate for 2Q25 was 1.99% (compared to 2.13% for 1Q25 and 2.34% for 4Q24), marking the second consecutive quarter where the research value is lower than the current upper limit of 2.5% for ordinary product pricing interest rates, triggering an industry-wide pricing interest rate cut within 2 months.

Related NewsM Stanley: Reduction in Suggested Insurance Product Interest Rate Cap Eases Concerns Over Interest Rate Risks in CN Insurance Sector
CHINA LIFE (02628.HK)  -0.600 (-2.637%)    Short selling $740.74M; Ratio 24.832%   , China Pacific Life Insurance and Ping An Life Insurance announced that, by the end of August 2025, they will lower the pricing rate cap for ordinary/ par/ universal products from 2.5%/ 2.0%/ 1.5% to 2.0%/ 1.75%/ 1.0%, respectively.

Moreover, on the asset side, as the product structure shifts towards par products, Citi Research expected Chinese insurers to further increase their equity investment mix, as par product accounts have relatively higher risk tolerance, allowing for a higher proportion of growth-oriented equity investments.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-08-01 16:25.)

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