Core Viewpoint - The insurance sector is currently experiencing significant stock price declines due to global market volatility, with PB valuations at the lower end of the past three years, indicating a high cost-performance beta value. Long-term, major listed companies in the insurance sector are expected to leverage their robust balance sheets and profitability to navigate through cycles and benefit from a new development phase characterized by supply-side concentration, low-cost liabilities, and a shift towards dividend insurance [1][2][6]. Short-term Analysis - In the short term, the insurance sector is impacted by substantial fluctuations in global stock markets, leading to PB valuations returning to the lower end of the past three years, suggesting a high cost-performance beta value. The traditional insurance sales model has resulted in decreased stability in performance, with stock prices generally evaluated based on net assets, maintaining a stable fluctuation range [2][6]. Long-term Outlook - The insurance industry is entering a new cycle, with listed companies poised to benefit from the low-cost liability development phase. The current interest rate reduction cycle has exacerbated industry differentiation, and stringent regulations are expected to favor major listed companies, allowing them to thrive in the new development cycle [2][3]. - The difference in liability costs among large, medium, and small insurance companies is significant, with major companies benefiting from a lower overall liability cost below 3%, compared to smaller firms. Additionally, listed insurance companies have extended asset durations over the past five years, with bond allocations expected to increase by 5.0 percentage points by the end of 2024 compared to 2023 [2][3]. Regulatory Environment - Regulatory policies, such as the integration of reporting and operational channels, are reshaping the insurance distribution landscape, concentrating market share among leading companies. Companies with a high proportion of bank insurance channels are likely to see substantial growth in new business value, benefiting from both volume and price increases [3][4]. Transition to Dividend Insurance - The year 2025 is anticipated to mark the beginning of the transformation towards dividend insurance, with a significant increase in the proportion of dividend insurance products observed since the first quarter of 2025. The transition's sustainability will require further observation, but confidence in the shift towards dividend insurance is supported by several factors, including the higher guaranteed rates of dividend insurance compared to deposit rates in a low-interest environment [3][4]. Investment Strategy - The investment strategy suggests a short-term focus on beta value and a long-term investment in the new development cycle. The current low-interest environment is expected to exacerbate differentiation within the insurance industry and promote supply-side concentration, rather than leading to overall margin compression. The anticipated long-term inflationary pressures and the shift towards dividend insurance are expected to enhance the stability and profitability of the insurance sector [6][7].