SCS(SH:601555) Zhi Tong Cai Jing·2025-12-22 05:10Core Viewpoint - The new regulatory framework for asset-liability management in the insurance industry aims to enhance risk management and ensure stable operations, responding to changes in interest rates, product structures, and accounting standards [1][4]. Group 1: Reasons for Revising Regulations - The revision responds to the requirement of the "National Ten Articles" to strengthen asset-liability linkage supervision [1]. - It promotes insurance companies to enhance their asset-liability management [1]. - The new regulations align with the implementation of new accounting standards by 2026, adjusting the metrics for asset-liability matching [1]. Group 2: Changes Compared to Current Rules - The new draft consolidates previous scattered regulatory requirements, providing comprehensive norms for governance, responsibility allocation, and management procedures [2]. - It specifies regulatory indicators and emphasizes long-term assessment [2]. Group 3: Quantitative Management Indicators - The new regulations include two types of indicators: regulatory indicators (3 for property insurance, 4 for life insurance) and monitoring indicators (3 for property insurance, 7 for life insurance) [3]. - Regulatory indicators for property insurance include: 1. Coverage ratio of settled funds = settled funds / long-term assets 2. Income coverage ratio = (insurance service income + comprehensive investment income) / total costs 3. Liquidity coverage ratio under stress scenarios, all must be above 100% [3]. - Regulatory indicators for life insurance include: 1. Effective duration gap = effective duration of cash inflows - effective duration of cash outflows, with a required range of [-5, 5] 2. Comprehensive investment income coverage ratio = comprehensive investment income / liability funding cost 3. Net investment income coverage ratio = net investment income / guaranteed liability cost 4. Liquidity coverage ratio under stress scenarios, all must be above 100% [3]. - The calculation metrics have been optimized, adjusting for macroeconomic changes and extending the evaluation period for cost-benefit indicators to 3-5 years [3]. Group 4: Industry Outlook - The industry is entering a new cycle with improvements in both the liability and asset sides, indicating significant upward valuation potential [5]. - Market demand remains strong, with a reduction in preset interest rates and a shift towards dividend insurance expected to optimize liability costs [5]. - The recent decline in the ten-year government bond yield to approximately 1.83% is anticipated to alleviate pressure on new fixed-income investment returns as the domestic economy recovers [5]. - The current under-allocation of public funds in insurance stocks suggests that the insurance sector is undervalued, with projected valuations for December 19, 2025, at 0.65-0.95 times PEV and 1.27-2.17 times PB, which are historically low [5].