Zhong Guo Zheng Quan Bao·2025-07-30 21:09Core Viewpoint - The scheduled interest rates for insurance products will be lowered starting in September, leading to increased premiums for critical illness insurance and reduced returns for annuity insurance. Customers are encouraged to purchase insurance before the end of August to lock in current rates [1][2]. Product Changes - Insurance companies are preparing to switch products, with several existing products exceeding the new maximum scheduled interest rates being discontinued by August 31. Some products, including critical illness and annuity insurance, will be discontinued as early as July 31 [1][2]. - Major insurance companies like China Life, Ping An Life, and Pacific Life have announced adjustments to the maximum scheduled interest rates for new insurance products, with ordinary insurance products set to a maximum of 2.0%, participating insurance products to 1.75%, and universal insurance products to 1.0% [2][3]. Market Dynamics - The adjustment of scheduled interest rates marks the first instance of a decrease since the establishment of a mechanism linking scheduled interest rates to market rates. The current research value for ordinary life insurance products is reported at 1.99%, down from 2.34% and 2.13% earlier this year [3][4]. - The decline in scheduled interest rates is seen as a necessary response to the downward trend in market interest rates, which will help reduce the cost of liabilities for insurance companies and alleviate pressure from interest rate differentials [4]. Focus on Participating Insurance - The asymmetric reduction in scheduled interest rates, with participating insurance rates only decreasing by 25 basis points compared to other products, is expected to enhance the competitiveness of participating insurance products, making them a focal point for insurance companies moving forward [4][5]. - The expectation is that participating insurance products, which offer both guaranteed and floating returns, will attract more customers, especially as traditional fixed-income products face competition from these offerings [5][6]. Performance of Participating Insurance - Over 50 insurance companies have disclosed their dividend realization rates for participating insurance products for 2024, with approximately 20% of these products achieving or exceeding a 100% realization rate, indicating an improvement compared to 2023 [6]. - Analysts suggest that participating insurance products will play a significant role in attracting deposits as traditional fixed deposits mature, positioning them as a key product for driving deposit migration [6].