Jin Rong Shi Bao·2025-08-08 07:04Core Viewpoint - The insurance industry is adjusting the preset interest rates for life insurance products due to the establishment of a dynamic adjustment mechanism linked to market interest rates, with the current research value set at 1.99% for ordinary life insurance products [1][2]. Group 1: Adjustment Mechanism - The adjustment of preset interest rates is based on a mechanism established in January 2023, which links preset rates to market rates such as the 5-year LPR and 10-year government bond rates [2]. - The current maximum preset interest rates are 2.5% for ordinary life insurance, 2.0% for participating insurance, and 1.5% for universal insurance [2]. Group 2: Expected Changes - Analysts predict that the maximum preset interest rate for ordinary life insurance will be adjusted down by 50 basis points to 2.0% by the end of August 2023, rather than the minimum required adjustment of 25 basis points [3][4]. - Major insurance companies, including China Life and Ping An Life, have already announced adjustments to their new insurance products in line with the new preset interest rates [4]. Group 3: Market Response - Many insurance companies have proactively prepared for the rate adjustments, with some already launching products with lower preset interest rates [5]. - The market is witnessing a shift towards participating insurance products, which are expected to become a significant part of the insurance companies' offerings due to their ability to share profits with clients [6][7]. Group 4: Industry Trends - The insurance industry is increasingly focusing on developing floating yield products as a response to the downward pressure on preset interest rates [6][7]. - Participating insurance products are projected to regain a dominant market share, potentially exceeding 80% of total premium income in the future [6].