Summary of Conference Call Notes Industry Overview - The conference call discusses the insurance industry, focusing on the impact of new regulations on asset-liability management and the growth prospects for major insurance companies, particularly in the context of the low interest rate environment and upcoming accounting standards [1][5][6]. Key Points and Arguments Growth Projections - The insurance industry is expected to maintain strong premium growth in 2026, with a high double-digit growth potential, particularly in Q1 due to pre-emptive premium collection by major companies [2][3]. - Major insurance companies are rapidly expanding their bancassurance channels, with Ping An's network projected to grow from 6,000 to 19,000 outlets by Q3 2025, aiming for a 50% increase by the end of 2026 [2]. - The new business growth rate for major insurance companies in the bancassurance channel is estimated to exceed 30%, with companies like Ping An potentially reaching over 50% [2]. Market Dynamics - Large insurance companies are gaining market share at the expense of smaller firms, with large companies' new business growth rate around 40% and market share rising from 30% to 40% [4]. - Despite the market pressure, the risk of large-scale defaults among smaller insurance companies is considered manageable due to improved capital gains and regulatory support [4]. Regulatory Changes - New regulations have introduced quantitative indicators for asset-liability management, including duration gaps and liquidity coverage ratios, to adapt to the low interest rate environment [5][6]. - The focus of the new rules is on 3-5 year indicators rather than just current period metrics, aiming to enhance risk management and asset allocation [6]. Asset Allocation Trends - The insurance asset allocation is expected to shift towards participating insurance products, increasing equity asset allocation while reducing demand for long-duration bonds [11]. - The average liability duration for participating insurance products is around 10-12 years, while the industry average is 15-17 years [8]. Investment Strategies - Regulatory requirements for major insurance companies include directing 30% of new premiums to A-shares, which may be subject to adjustments in the coming years [13][14]. - Smaller insurance companies, which account for 35%-40% of total industry investment assets, may see a decline in demand for bank capital bonds due to new accounting standards [9]. Future Outlook - The trend indicates a significant increase in the proportion of participating insurance products, expected to reach over 60% in new business by 2026, with some aggressive players targeting 70-80% [18]. - The overall sentiment towards the stock market for 2026 remains optimistic, influencing the allocation strategies for long-term bonds [17]. Additional Important Insights - The new accounting standards and regulatory measures are expected to enhance the overall stability and risk management of the insurance sector [12]. - The impact of the stock market performance on insurance companies' asset allocation strategies will be closely monitored, especially in light of solvency pressures [15][16].

Core Viewpoint - The Financial Regulatory Bureau has issued a notification adjusting risk factors for insurance companies' investments, aiming to encourage long-term capital and support technological innovation [1][2]. Group 1: Risk Factor Adjustments - Insurance companies holding stocks from the CSI 300 Index and the CSI Low Volatility 100 Index for over three years will see their risk factor reduced from 0.3 to 0.27 [1]. - For stocks listed on the Sci-Tech Innovation Board held for over two years, the risk factor will decrease from 0.4 to 0.36 [1]. - The notification also lowers the premium risk factor for export credit insurance and overseas investment insurance from 0.467 to 0.42, and the reserve risk factor from 0.605 to 0.545 [3]. Group 2: Impact on Insurance Industry - The adjustments are expected to alleviate capital occupation for insurance companies, enhancing solvency ratios and encouraging long-term investments in the stock market [2]. - The industry is likely to shift towards a "long-term holding" strategy, focusing on high-dividend blue-chip stocks and stocks supported by national strategies [2]. - There will be a greater emphasis on "long-term capability" in internal assessments and investment research systems, aligning with long-term performance [2]. Group 3: Industry Demand and Suggestions - In a low-interest-rate environment, there is a growing demand for equity asset allocation among insurance companies, with calls for optimized solvency policies [3]. - Suggestions include further refining risk factor classifications based on investment fields and holding periods, providing capital advantages for long-term strategic stocks [3].