Shang Hai Zheng Quan Bao·2025-07-25 18:29Core Viewpoint - The China Insurance Industry Association has set the current predetermined interest rate for ordinary life insurance products at 1.99%, marking a decrease from the previous rate of 2.13% established in April 2023, indicating a trend of declining interest rates in the insurance sector [1][2] Group 1: Interest Rate Adjustments - The new research value for ordinary life insurance products is 1.99%, which is 25 basis points lower than the current predetermined rate of 2.5% [1] - Major insurance companies, including China Life, Taiping Life, Ping An Life, and ICBC-AXA Life, have announced adjustments to their predetermined rates, setting the maximum for ordinary life insurance products at 2.0%, for participating products at 1.75%, and for universal life products at 1.0% [1][2] Group 2: Impact on Insurance Products - The reduction in predetermined rates for ordinary and universal life insurance products is by 50 basis points, while the participating products see a decrease of 25 basis points, which is expected to stabilize future product adjustments and consumer expectations [2] - The shift towards floating income products is accelerating, with life insurance companies increasing their focus on developing participating products and launching new offerings [2] Group 3: Strategic Implications - The core rationale behind lowering the predetermined interest rates is to align the liability costs of insurance companies with the actual yield capabilities of their assets, thereby mitigating interest rate risk and ensuring solvency [2][3] - The implementation of a dynamic adjustment mechanism for predetermined rates is crucial for managing liability costs and expectations within the industry, with most companies prepared for a transition to new products by the end of August [3]