SINOLINK SECURITIES·2025-12-31 15:27Investment Rating - The report indicates a positive outlook for the insurance industry, with expectations of double-digit growth in new premiums and net profit value (NBV) driven by the migration of deposits and improved margins [2][22]. Core Insights - The insurance sector is expected to benefit from strong household savings demand, with insurance products becoming increasingly attractive as low-risk savings options amid declining bank deposit rates [2][22]. - The transition towards participating insurance products is anticipated to enhance market share for leading insurance companies, as they leverage their stronger investment capabilities and distribution channels [2][3]. - The report highlights a favorable market environment for insurance stocks, driven by high demand for new policies and a stable investment return outlook, which is expected to support valuation recovery [4][8]. Summary by Sections Liability Side Outlook - New business and NBV are projected to grow at double-digit rates, supported by strong household savings and a shift towards insurance products due to declining bank deposit rates [2][22]. - The insurance sector is expected to maintain stable margins despite the downward adjustment of preset interest rates and the transition to participating insurance [2][22]. Asset Side Outlook - Insurance funds are expected to actively enter the market, with a significant portion of new premiums allocated to equities, particularly in A-shares [3][16]. - The report anticipates a diversified approach to asset allocation, with a focus on high-dividend stocks and sectors such as technology and advanced manufacturing [3][19]. Market Performance Review - The insurance sector has outperformed the broader market, with significant gains in both A-shares and H-shares, indicating strong investor confidence [8][4]. - The report notes that the insurance index has increased by 27.0%, outperforming the CSI 300 index, which rose by 18.2% [8]. Premium Income and Profitability - New premium income is expected to achieve double-digit growth, with specific companies like China Life and Ping An showing substantial increases in their new business premiums [14][32]. - The report highlights the importance of maintaining a favorable cost structure and investment returns to support profitability in the insurance sector [4][11].