Jin Rong Shi Bao·2025-08-08 08:01Core Viewpoint - The adjustment of the predetermined interest rate for life insurance products is a response to the newly established dynamic adjustment mechanism, with the current research value set at 1.99% for the second quarter of 2025, indicating a downward trend in interest rates [1][2]. Group 1: Adjustment Mechanism - The dynamic adjustment mechanism for predetermined interest rates was established in January 2023, linking them to market interest rates such as the 5-year LPR and 10-year government bond rates [2]. - The current maximum predetermined interest rates are 2.5% for ordinary life insurance products, 2.0% for participating products, and 1.5% for universal life products [2]. Group 2: Expected Adjustments - Analysts predict a reduction of 25 basis points in the maximum predetermined interest rate, but some expect a more significant adjustment of 50 basis points to 2.0% due to anticipated further declines in the research value [3][4]. - Major insurance companies, including China Life and Ping An Life, have already announced adjustments to their new insurance products' maximum predetermined interest rates in response to the changes [4]. Group 3: Market Response - Several insurance companies have proactively adjusted their product offerings, with some introducing products with a predetermined interest rate of 1.75% ahead of the official announcement [5]. - The market is witnessing a shift towards participating insurance products, which are expected to become a significant focus for insurance companies, with some firms reporting that over 50% of their total life insurance premiums now come from participating products [6][7]. Group 4: Industry Trends - The insurance industry is increasingly embracing participating insurance products as a strategy to manage liability costs and enhance product competitiveness [6]. - Experts emphasize the need for a transition towards floating yield products, which can help stabilize financial performance and market expectations despite the downward pressure on traditional savings-type products [7].