The Insurance Association of China (IAC) recently lowered the pricing interest rate (PIR) benchmark by 14 bps to 1.99%, which is 51 bps below the current traditional product PIR of 2.5%, UBS said in a report. This adjustment aligned with market expectations, primarily reflecting the downtrend in market interest rates (such as government bond yields, deposit rates, and loan market quoted rates) in 2Q25.

This adjustment in PIRs may signify the end of the golden era for traditional assured whole life plan (IWLP). Although these products are favored by consumers, they pose higher interest rate risks for insurance companies. In contrast, the attractiveness of participating (PAR) products is increasing, benefiting both the Hong Kong market (illustration rate of return of 6-6.5%) and the mainland market.

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In the transition to PAR products, AIA China holds an advantage due to its strong investment capabilities, performance rates, and agent capabilities. Additionally, PING AN (02318.HK)  -1.050 (-1.946%)    Short selling $928.57M; Ratio 22.144%   and CHINA LIFE (02628.HK)  -0.600 (-2.637%)    Short selling $740.74M; Ratio 24.832%   also outperformed their peers in the transition to PAR products.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-08-01 16:25.)