1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The report addresses the asset allocation characteristics of dividend - paying insurance and the impact of its transformation on the bond market [4][10] - In 2025, the transformation of dividend - paying insurance became an industry trend, with significant growth in scale. The income of ordinary dividend - paying insurance of six listed insurance companies in the first half of 2025 reached 157.7 billion yuan, a year - on - year increase of 12%, and its proportion in total life insurance income rose from 15% at the end of 2024 to 16.3% [5][11] - The rapid expansion of dividend - paying insurance meets the needs of both clients and insurance companies. For clients, it offers "certainty of guaranteed return + elastic dividend expectation"; for insurance companies, it helps prevent interest spread losses and reduces the impact of investment asset prices on financial statements [5][14][15] - Compared with ordinary life insurance, the asset allocation logic of dividend - paying insurance is more return - oriented, increasing the allocation of high - volatility assets [5] - The growth rate of insurance companies' bond allocation scale may slow down marginally, and their preference for equities will continue. In terms of specific bond types, insurance companies may increase trading demand for ultra - long - term treasury bonds and allocation demand for secondary perpetual bonds while maintaining the allocation of ultra - long - term local government bonds [5][20][22] 3. Summary by Directory 3.1 Dividend - paying Insurance Transformation Initiation - In 2025, major listed insurance companies placed dividend - paying insurance at the core of their products, driving it to dominate new business. The income of dividend - paying insurance of six listed insurance companies in the first half of the year increased significantly [11] - Each major insurance company has taken measures to promote dividend - paying insurance. For example, China Ping An focused on dividend - paying products, and China Pacific Insurance optimized its product structure with increased dividend - paying insurance new - policy premium [12] 3.2 Reasons for the Rapid Increase in Dividend - paying Insurance Scale - Client side: In the context of low - interest rates and expected stock market improvement, the "certainty of guaranteed return + elastic dividend expectation" of dividend - paying insurance meets clients' demand for more elastic returns [5][14] - Insurance company side: It can prevent interest spread losses and reduce the impact of investment asset price fluctuations on financial statements [5][15] 3.3 Differences in the Asset Allocation Logic of Dividend - paying Insurance - Accounting mechanism: Dividend - paying insurance uses the "floating fee method" for measurement, allowing its liability - side price to be linked to the asset - side. It has a return smoothing mechanism, giving its account a higher risk tolerance [5][16][17] - Business transformation: Higher and stable investment returns are crucial for attracting customers, fulfilling dividend promises, and promoting successful transformation [17] 3.4 Impact on the Bond Market - Overall bond demand: The growth rate of insurance companies' bond allocation scale may slow down marginally, and their preference for equities will continue. In the first three quarters of 2025, the proportion of equity assets in insurance companies' new investments increased from 10.4% in 2024 to 39.9%, while the proportion of bonds decreased from 72.2% to 57.1% [20] - Specific bond types: Insurance companies may increase trading demand for ultra - long - term treasury bonds and allocation demand for secondary perpetual bonds while maintaining the allocation of ultra - long - term local government bonds [22]

Core Viewpoint - The forum highlighted the transformative role of technology in insurance asset management, emphasizing that the primary value of technology is to enhance decision-making stability rather than to make investments more aggressive [1]. Group 1: Evolution of Insurance Asset Allocation - The evolution of insurance asset allocation has shifted from reliance on experience and single return targets to a multi-objective approach focusing on duration, return, and liquidity [2]. - The current environment is characterized by increased geopolitical risks and significant asset correlation, making the dynamic interaction between assets and liabilities more critical than ever [2]. - The essence of insurance asset allocation has transitioned from "what assets to select" to finding "explainable, verifiable, and executable optimal solutions" under multiple constraints [2]. Group 2: Value of Technology in Investment - The primary value of technology in insurance asset management is to make decision-making more robust rather than to accelerate investment processes [3]. - A systematic framework focusing on value and profit has been implemented by the company, exploring AI applications in scenario-based asset allocation [3]. - An example was provided where an algorithm reduced capital risk indicators by 15% while maintaining expected surplus, demonstrating a methodology that integrates liabilities, capital, returns, and risks into a unified decision-making space [3]. Group 3: AI's Role in Insurance Asset Management - AI is seen as a tool to amplify system capabilities rather than replace decision-makers, with applications starting from three foundational areas [4]. - The first area is the structured processing of high-dimensional data, allowing for the identification of structural relationships among thousands of assets and numerous constraints [4]. - The second area involves scenario generation and portfolio simulation, where AI can create more realistic potential paths compared to traditional assumptions [4]. Group 4: Challenges of AI Implementation - The true challenge of technological transformation in insurance asset management lies in whether the organization has a compatible decision-making mechanism and culture, which is deemed more important than the models and algorithms themselves [6]. - Collaboration among research, risk control, actuarial, and IT departments in a common language is essential for effective implementation [6]. - Management must accept the idea of using systems to constrain personal judgment, allowing technology to become an integral part of the institution and its processes [6].

Core Viewpoint - The core viewpoint of the article emphasizes the transformative role of technology, particularly AI, in reshaping insurance asset management, focusing on enhancing decision-making stability rather than aggressive investment strategies [2][6]. Group 1: Evolution of Insurance Asset Allocation - The evolution of insurance asset allocation has transitioned from reliance on experience and single yield targets to a multi-objective balancing phase centered on duration, yield, and liquidity [4]. - Currently, the complexity of the environment, including rising geopolitical risks and new accounting standards, necessitates a shift from "what assets to select" to finding "explainable, verifiable, and executable optimal solutions" under multiple constraints [5]. Group 2: Value of Technology in Investment - The primary value of technology in insurance asset management is to make investment decisions more robust rather than more aggressive [7]. - A systematic strategic asset allocation framework has been implemented by the company, focusing on value and profit, exploring AI applications in scenario-based asset allocation [7]. - An example of cross-asset allocation demonstrated that an algorithm reduced capital risk indicators by 15% while maintaining expected surplus, integrating liabilities, capital, returns, and risks into a unified decision-making methodology [7]. Group 3: AI's Role in Insurance Asset Management - AI's role is not to replace decision-makers but to amplify system capabilities, starting from three fundamental aspects rather than market prediction [9]. - The first aspect is the structured processing of high-dimensional data, enabling the identification of structural relationships among thousands of assets and numerous constraints [10]. - The second aspect involves scenario generation and portfolio simulation, allowing for the creation of more realistic potential paths compared to traditional assumptions [10]. - The third aspect is human-machine collaborative decision support, where AI provides decision spaces, risk boundaries, and trade-offs, with final decisions made by the investment decision committee [10]. Group 4: Challenges in AI Application - The true challenge in the technological transformation of insurance asset management lies not in the availability of AI but in whether the organization possesses a compatible decision-making mechanism and culture [12]. - Collaboration among research, risk control, actuarial, and IT departments in a common language is essential, as is management's acceptance of using systems to constrain personal judgment [13]. - Although technology cannot provide direct answers, it helps in approaching long-term optimal solutions amidst uncertainty, maintaining the mission of serving the real economy and social development responsibly [13].

Summary of Insurance Asset Allocation Conference Call Industry Overview - The insurance industry is experiencing a significant shift in asset allocation, with a notable increase in equity investments. The overall allocation in stocks, funds, and long-term equity investments has reached 23%, approaching the regulatory limit of 30% [1][3]. Key Insights Asset Allocation Trends - Leading insurance companies have a secondary equity allocation ratio between 10% and 15%, with some aggressive firms nearing 20%. Overall returns for large insurers have exceeded 20% this year [2][3]. - Smaller insurance companies show significant differentiation; while some maintain high equity positions for higher returns, many are forced to reduce their positions due to solvency pressures [1][3][5]. Future Projections - By 2026, the equity central tendency for listed insurance companies is expected to range between 14% and 17%, with a potential increase of 4-5 percentage points in large equity allocations [1][6]. - Major state-owned enterprises are expected to increase their allocation to dividend stocks and high-yield assets, potentially through private equity funds [1][4]. Investment Strategies - Companies like Ping An and Taikang are leaning towards OCI (Other Comprehensive Income) and high-dividend assets, with Ping An replacing long-term bonds with stock allocations [1][6][7]. - The investment styles of various companies differ significantly; for instance, Xinhua focuses on growth, while China Life adopts a more balanced approach [8][9]. Regulatory and Market Influences - The low interest rate environment poses challenges for insurance companies, affecting their solvency and investment strategies. Future policy adjustments may alleviate some of these pressures [19][21]. - The anticipated implementation of new accounting standards in 2026 may lead to increased demand for dividends and OCI, impacting asset allocation strategies across the industry [10][24]. Additional Considerations - The selection criteria for OCI investments are becoming stricter, focusing on high and stable dividend yields, low volatility, and strong liquidity [12][14]. - There is a growing trend towards using ETFs and external management to enhance investment capabilities, particularly in technology and healthcare sectors [13][18]. - The disparity in investment strategies between state-owned and private insurance companies reflects varying levels of market understanding and internal conditions [5][22]. Conclusion - The insurance sector is navigating a complex landscape of regulatory pressures, market dynamics, and evolving investment strategies. The focus on equity investments, particularly in high-dividend and growth sectors, is expected to continue shaping the industry's asset allocation in the coming years.

Core Viewpoint - The insurance industry is expected to see a steady increase in asset utilization, with a projected balance of 37.5 trillion yuan by Q3 2025, reflecting a 12.6% increase from the beginning of the year, driven by stable growth in new and renewal premiums [1] Group 1: Asset Allocation - As of Q3 2025, the insurance sector's stock asset allocation reached 3.62 trillion yuan, up 1.19 trillion yuan from the start of the year, with a proportion of 10.0%, an increase of 2.5 percentage points year-to-date [2] - The allocation to funds within the insurance industry is 5.5%, an increase of 0.2 percentage points year-to-date, attributed to the appreciation of equity fund market values [2] - The bond asset allocation stands at 50.3%, up 0.8 percentage points year-to-date, but has decreased by 0.8 percentage points from Q2, influenced by rising long-term interest rates [2] - The proportion of bank deposits in the insurance sector is 7.9%, down 1.1 percentage points year-to-date, continuing to decline due to falling deposit rates [2] Group 2: Other Assets and Management - The allocation to other assets, primarily non-standard assets, is 18.4%, down 2.7 percentage points year-to-date, as the supply of quality non-standard assets diminishes [3] - The industry is urged to enhance its active management capabilities in asset allocation, shifting from passive to active strategies to optimize investment returns amid a low-interest-rate environment and narrowing credit spreads [4]

Core Viewpoint - The low interest rate environment is a fundamental challenge facing the Chinese insurance industry, driving a deep transformation in asset allocation strategies to address pressures on interest spreads, solvency, and liquidity [1][2]. Group 1: Historical Context of Low Interest Rates - China has experienced four notable low interest rate cycles since the reform and opening up, each associated with specific economic and financial conditions [5]. - The current low interest rate cycle began in 2019, exacerbated by economic downturns and the impact of the pandemic, indicating a potentially prolonged period of low rates [6]. Group 2: Current Asset Allocation Trends - Despite low interest rates, the total assets of the insurance industry have continued to grow, surpassing 40 trillion yuan, with an expected balance of nearly 40 trillion yuan in funds by year-end [7]. - The industry has increased its allocation to long-term bonds and medium to long-term deposits to stabilize income and enhance returns from fixed income investments [8]. - Equity investments have also seen steady growth, particularly in stocks and stock funds, with a significant increase of 85% since the end of the 13th Five-Year Plan [9]. - Alternative asset allocations have decreased, with private debt investments notably declining, reflecting challenges in the market [10]. Group 3: Market Risks and Changes - New market risks have emerged, including stock market volatility and concentrated investments in certain sectors, necessitating careful evaluation of long-term profitability [11]. Group 4: Comparative Analysis of International Practices - International strategies for low interest rate environments typically involve increasing equity investments and diversifying into alternative assets, but these strategies have not been fully realized in the domestic market due to unique local conditions [12][13]. Group 5: Future Outlook and Strategic Measures - The insurance industry faces a complex external environment with both challenges and opportunities, necessitating a focus on high-quality development and adaptation to changing market conditions [14]. - Eight strategic measures have been proposed to navigate the low interest rate environment, including enhancing cost control, optimizing fixed income strategies, and promoting innovation in asset management products [15][16][17].