Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - The liability side of the insurance industry remains resilient, with continuous growth in premium income, but the downward space for costs is limited, and the differentiation pattern is difficult to ease [2]. - The insurance asset allocation structure is continuously adjusted under the combined effect of the low - interest - rate environment and regulatory guidance, showing a trend of "structural re - balance" towards long - term and stable assets [3]. - Under the dual constraints of new capital and accounting regulations, the preference for secondary and perpetual (Er Yong) bonds by insurance funds has weakened, and the regulatory new rules are reshaping the fixed - income allocation structure of insurance funds [4]. Summary According to the Directory 1. Liability End: Premium Inflows Are Expected to Continue, and the Comprehensive Cost Decline Is Limited 1.1 Liability Scale: Premium Income Continues to Increase, Driving the Expansion of Total Assets - Premium income, the core factor affecting the scale of the insurance liability end, has been growing in recent years. In 2024, the cumulative premium income of insurance companies reached 5.70 trillion yuan, a year - on - year increase of 11.2%. As of November 2025, it reached 5.76 trillion yuan [10]. - The continuous growth of premiums has also driven the synchronous expansion of the insurance company's asset scale. The total assets of insurance companies reached 35.9 trillion yuan at the end of 2024, a year - on - year increase of 11%. As of November 2025, it further rose to 40.6 trillion yuan [10]. 1.2 Liability Cost: The Predetermined Interest Rate Is Reduced, but the Cost Pressure Remains - In the property insurance industry, the decline in the comprehensive cost rate is limited. In 2024, the comprehensive cost rate of the property insurance industry was 99.0%. In the first half of 2025, there was a significant differentiation. The comprehensive cost rates of large and medium - large property insurance companies decreased slightly, while those of small and medium - sized property insurance companies increased significantly [11][13]. - In the life insurance industry, the overall break - even investment yield is under pressure, and the industry investment pressure is still high with continuous structural differentiation. The break - even yields of large and protection - oriented life insurance companies are relatively low, while those of small and medium - sized life insurance companies are high and scattered [15][17]. 2. Asset End: The Proportion of Deposit Allocation Declines, and the Proportion of Equity Investment Increases 2.1 Asset Structure: The Decline in Deposit Interest Rates and Regulatory Trends Trigger the Adjustment of Insurance Companies' Investment Structures - Due to the increase in bank interest - margin pressure and regulatory norms, the insurance funds' motivation to allocate bank deposits has decreased, and the proportion of deposits has shown a downward trend. Newly signed agreement deposits have shorter terms and lower interest rates [18][20]. - Insurance funds have increased their allocation of bonds, funds, and equity assets. Since the second half of 2024, regulatory authorities have continuously guided insurance funds to increase the proportion of equity and equity - related asset allocation through various policies [22]. 2.2 Asset Duration: The Duration Gap Persists, and the Demand for Long - Duration Assets Remains Strong - With the overall lengthening of the liability - side duration and the increase in the proportion of long - term liabilities such as dividend - paying insurance, the demand for asset - liability duration matching by insurance funds has been further strengthened [24]. - The average duration gap between assets and liabilities in the life insurance industry is about 7 - 9 years, and small and medium - sized insurance companies may face more duration risks. Insurance funds have a rigid demand for long - duration bonds, and local government bonds with maturities of 10 - 20 years and over 20 years have become the core heavy - position varieties [24][25]. 2.3 Regulatory New Rules: At the End of the Policy Transition, Insurance Companies' Preference for Er Yong Bonds Declines - Under the new "Solvency II" Phase II and new accounting standards, Er Yong bonds have a stronger constraint on the comprehensive solvency adequacy ratio of insurance institutions. Non - listed and small and medium - sized insurance companies have less space for allocation [27]. - In the secondary market in the past two years, insurance funds have shown a trend of under - allocating Er Yong bonds. High - grade credit bonds and policy - financial bonds with lower risk factors and more favorable accounting treatments are more in line with the current allocation requirements of insurance funds [27][30].