Core Viewpoint - The insurance industry is undergoing a significant shift as the predetermined interest rates for life insurance products are set to decrease, prompting companies to phase out non-compliant products and introduce new ones. This has led to a heightened interest in participating insurance products, which are expected to dominate the market in a low-interest-rate environment [1][3][5]. Group 1: Changes in Predetermined Interest Rates - The China Insurance Industry Association announced a new research value for ordinary life insurance products' predetermined interest rate at 1.99%, down from 2.34% in January and 2.13% in April, marking a significant decline [3][5]. - Major insurance companies, including China Life and Ping An Life, have adjusted their maximum predetermined interest rates, with ordinary life insurance rates dropping from 2.5% to 2%, and participating insurance rates from 2% to 1.75% [3][5][7]. - The new rates will take effect after August 31, with no applications accepted for products exceeding these limits [3]. Group 2: Shift Towards Participating Insurance Products - In response to the declining interest rates, participating insurance products are gaining traction due to their combination of guaranteed and floating returns, appealing to consumers seeking higher returns [5][6]. - Participating insurance allows policyholders to receive a share of the insurer's profits, with a minimum of 70% of the distributable surplus allocated to policyholders each year [5][9]. - The competitive advantage of participating insurance is further enhanced by its flexibility in product design, allowing for additional features such as universal accounts and health management services [7][8]. Group 3: Market Dynamics and Consumer Behavior - The low-interest-rate environment and asset scarcity are driving insurance companies to expand their offerings of participating and other floating-return products [8][9]. - Data from the China Insurance Industry Association indicates that nearly 40% of new life insurance products launched in the first quarter were participating or universal life insurance [8]. - The performance of participating insurance products is closely tied to the company's actual operating results, with the dividend realization rate being a critical measure of their competitiveness [9][10]. Group 4: Consumer Considerations - Consumers are advised to evaluate the dividend realization rate over the past 5-10 years to assess the stability and variability of the insurer's performance [9][10]. - The speed of cash value growth is also crucial, as faster growth indicates better liquidity and shorter lock-in periods for funds [10]. - Additional factors such as the insurer's investment return rates, solvency ratios, and hidden costs like commissions and management fees should be considered when selecting products [10].

Group 1 - The core viewpoint is that participating insurance, which combines guaranteed and variable returns, is becoming increasingly popular in the insurance market as companies view the transition to participating insurance as a strategic move to mitigate "interest spread loss" risks [1] - As of June 2025, insurance companies have launched 403 new life insurance products this year, with 151 of them being participating insurance products, accounting for 37%, an increase of 9 percentage points compared to the entire year of 2024 [1] Group 2 - Participating insurance returns consist of guaranteed benefits and dividend benefits, with the guaranteed benefit depending on the product's predetermined interest rate, which will decrease from 2.5% to 2% before October 2024, and further down to 1.75% by the end of August this year [2] - The dividend benefit is influenced by various factors including the illustrated dividend rate, the method of dividend distribution, policy year, coverage amount, and dividend allocation rules [2] - Regulatory requirements dictate that at least 70% of the distributable surplus from participating insurance must be allocated to policyholders, but the actual amount depends on the company's operational performance [2] Group 3 - Participating insurance features a smoothing mechanism and special reserve concept to mitigate market volatility, allowing companies to reserve part of the surplus during good investment periods to distribute during poor market conditions, providing clients with stable returns [3] - Despite the smoothing mechanism, policy dividends remain non-guaranteed, and there may be years with zero dividends [3] - For consumers, it is crucial to recognize that the primary function of insurance products is risk protection, and they should consider coverage, premium burden, and dividend potential rather than being solely attracted by high returns [3] - For life insurance companies, maintaining a reasonable dividend realization rate is essential; excessively high rates may boost short-term sales but jeopardize sustainability, while excessively low rates could lead to policy cancellations [3]

Core Insights - The overall dividend realization rate of participating insurance products has significantly improved in 2024 compared to the low performance in 2023, with many products from leading companies exceeding 100% realization rates [1][2] Summary by Sections Dividend Realization Rate Improvement - The dividend realization rate, which measures the actual dividends paid against projected dividends, has shown a positive trend, with over 200 products from more than 30 insurance companies achieving rates of 100% or higher [2][4] - Leading companies like Xinhua Insurance reported that 56 out of 59 participating products had a realization rate of 100%, with an average of 152%, while 11 out of 12 new products from Ping An Life also reached 100% [2][3] Factors Driving Improvement - Strong investment returns and optimized regulatory policies are the main drivers behind the improved dividend realization rates in 2024 [4][5] - The comprehensive investment return rate for life insurance companies reached 7.45% in 2024, an increase of 4.08 percentage points year-on-year, with Xinhua Insurance achieving 8.5% [4] - Regulatory adjustments have provided larger space for leading companies, with caps on floating income product liabilities set at 3.2% for small and medium-sized insurers and 3.0% for large insurers [4][5] Regulatory Environment and Market Dynamics - Recent regulatory changes aim to prevent unhealthy competition in the industry and ensure that companies do not inflate projected dividend levels unsustainably [5][6] - The emphasis on maintaining a high dividend realization rate (≥100%) reflects the prudence of actuarial assumptions and investment management capabilities, enhancing consumer trust [7][8] - The insurance industry is shifting from a marketing-driven approach to a value-driven one, focusing on asset-liability management and long-term investment capabilities [8]

Core Insights - The overall dividend realization rate of participating insurance products has significantly improved in 2024 compared to the low performance in 2023, with many products from leading companies exceeding 100% realization rates [1][2][4] Summary by Sections Dividend Realization Rate Improvement - The dividend realization rate, which measures the actual dividends paid against projected dividends, has shown a notable increase, with over 200 products from more than 30 insurance companies achieving rates of 100% or higher [2][3] - Leading companies like Xinhua Insurance reported that 56 out of 59 participating products had a realization rate of 100%, with an average of 152%, while 11 out of 12 new products from Ping An Life also reached 100% [2] Factors Driving Improvement - The improvement in dividend realization rates is attributed to strong investment returns and optimized regulatory policies. The comprehensive investment return rate for life insurance companies in 2024 is reported at 7.45%, an increase of 4.08 percentage points year-on-year [4] - Regulatory adjustments have provided larger companies with more flexibility, with the upper limit for actual yield rates set at 3.2% for small and medium-sized companies and 3.0% for large companies [4][5] Long-term Market Trends - The dividend insurance market is moving towards a healthier development path due to the dual influence of regulatory reinforcement and market self-regulation. This shift is expected to enhance the focus on asset-liability matching and investment risk management within the industry [7][9] - The importance of the dividend realization rate as a measure of an insurance company's fulfillment capability is increasingly recognized, with high realization rates indicating prudent actuarial assumptions and effective investment management [8]

Group 1: Core Insights - The overall trend shows an increase in dividend realization rates for insurance products in 2024 compared to 2023, with many products exceeding 100% realization rates, reversing the previous year's low performance [6][8][9] - Key factors driving this improvement include a recovery in investment returns, easing of regulatory constraints, and strategic adjustments by insurance companies to enhance product attractiveness [2][8][12] Group 2: Insurance Companies' Performance - Ping An Life reported that all 12 of its products effective from September 1, 2024, achieved a realization rate of 100% or more [6] - New China Life has seven products with cash dividends exceeding 100%, while several others have increased realization rates [6] - Sunshine Life has 17 out of over 90 products with realization rates at or above 100%, and Heng An Standard Life has over 30 products achieving 100% realization [6][12] Group 3: Consumer Impact and Expectations - The dividend from participating insurance products consists of guaranteed benefits and dividend benefits, with the latter being influenced by the realization rate [9][10] - For example, a product with a 50% realization rate could yield approximately 35,800 yuan, while an 80% rate could yield 37,000 yuan, and a 100% rate could yield 38,000 yuan [9] - Consumers are advised to monitor the realization rates and understand the sources and distribution methods of dividends to gauge potential returns [10][13] Group 4: Regulatory Environment - The introduction of regulatory guidelines aims to prevent irrational competition and ensure that dividend levels reflect actual investment performance, thereby protecting consumer interests [12][13] - The new regulations set limits on dividend levels based on past performance and financial health, promoting a more stable and transparent insurance market [12][13]

Core Viewpoint - The recent disclosure of dividend realization rates for participating insurance products by various insurance companies shows a significant improvement in 2024 compared to 2023, with many products exceeding a realization rate of 100% [2][3][4] Group 1: Dividend Realization Rates - Most participating insurance products have seen an increase in dividend realization rates compared to 2023, which were previously concentrated between 25%-50% [2][4] - Major companies like Ping An Life, Xinhua Insurance, and others have reported multiple products with realization rates exceeding 100% for 2024 [3][4] - The average realization rate across over a thousand products from more than 20 insurance companies is reported to be 49% for 2023 [4] Group 2: Factors Influencing Improvement - The improvement in dividend realization rates is attributed to a recovery in investment returns for insurance funds in 2024, driven by policy adjustments that have positively impacted the capital market [5] - Regulatory guidance on dividend levels in 2023 contributed to lower realization rates, but the asset-side improvements in 2024 have led companies to prioritize higher dividend distributions for existing products [5] Group 3: Sources of Dividends - Dividends from participating insurance products are derived from surplus earnings that exceed pricing assumptions, primarily from investment returns, mortality rates, and operational costs [6][7] - The realization rate reflects past performance and does not guarantee future dividends, emphasizing the importance of consistent high realization rates over time [7] Group 4: Regulatory Environment - The introduction of regulatory guidelines in June 2025 aims to prevent irrational competition and ensure that dividend levels are aligned with actual investment returns and financial health of the insurance accounts [9][10] - The guidelines set limits on dividend levels based on various financial metrics to protect consumer interests and promote transparency in dividend distribution [10] Group 5: Consumer Considerations - Consumers are advised to focus on the long-term investment capabilities of insurance companies, historical dividend realization rates, product design transparency, and alignment with personal financial needs when selecting participating insurance products [11]