保险行业：预定利率下调，建立动态调整机制

Investment Rating - The report maintains a "Buy" rating for Ping An (2318 HK) and China Pacific Insurance (2601 HK) [3] Core Views - The adjustment of the predetermined interest rates for insurance products is expected to alleviate the risk of interest spread losses, with the new rates set at 2.5% for traditional insurance and 2.0% for participating insurance [1] - The establishment of a dynamic adjustment mechanism linking predetermined rates to market rates will allow life insurance companies to manage interest spread risks more effectively [1] - Despite recent stock price declines, the insurance products are anticipated to retain their relative attractiveness compared to long-term deposit rates due to the new mechanisms [2] Summary by Sections Regulatory Changes - The Financial Regulatory Authority issued a notice on August 2, detailing a phased reduction in predetermined interest rates for insurance products, effective from September 1 and October 1 [1] - The new maximum rates are set at 2.5% for ordinary insurance and 2.0% for participating insurance, with a minimum guaranteed rate of 1.5% for universal insurance [1] Market Impact - On August 6, insurance stocks experienced significant declines, with China Life and China Pacific Insurance dropping over 5% and 10% respectively [2] - Concerns were raised regarding the reduced competitiveness of insurance products against deposits and other investment options due to the lower interest rates [2] Valuation and Outlook - The insurance sector is currently valued at historical lows, with attractive dividend yields of over 8% for Ping An and over 6% for China Pacific Insurance [3] - The report anticipates a potential recovery in industry profits from a low base, despite ongoing asset-side pressures [3]