Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the sector compared to the overall market performance [5]. Core Insights - The new regulations on dividend insurance aim to enhance sustainable operating levels while controlling liability costs, with specific guidelines for determining dividend levels based on asset allocation and investment returns [3][4]. - The focus on managing liability costs is crucial for mitigating interest spread loss risks, with the expected adjustment of the predetermined interest rate in Q3 2025 [5]. - The competitive landscape in the life insurance market remains intense, with customer return performance being a key factor influencing product selection [4]. Summary by Sections Regulatory Changes - New regulations on dividend insurance were issued on June 18, 2025, emphasizing sustainable dividend levels and dynamic management mechanisms [3]. - Insurers must justify the necessity and sustainability of proposed dividend levels under certain conditions, including historical performance metrics [3]. Market Dynamics - The core objective of transforming dividend insurance is to meet customer savings needs while reducing rigid liability costs [4]. - Major insurers have successfully increased sales of dividend insurance products, with significant contributions from individual and bank insurance channels [4]. Financial Projections - The expected predetermined interest rate for life insurance products is projected to decrease to 2.13% in Q1 2025, which is lower than the current rate of 2.5% [5]. - The insurance sector is expected to attract more attention post the implementation of new public fund regulations, with a notable underweight position compared to the market index [5]. Company Valuations - Key companies in the insurance sector have varying valuations, with China Life Insurance having a market cap of 96.34 billion RMB and a PEV of 0.74 for 2025 [9].

Core Viewpoint - The recent trend shows that medium to long-term large-denomination certificates of deposit (CDs) are being quietly withdrawn from sale by several major banks, with a focus on three-year and five-year terms, leading to a significant drop in interest rates for these products [1][2][4]. Group 1: Market Changes - Major banks such as Industrial and Commercial Bank of China, China Construction Bank, and China Merchants Bank have removed five-year large-denomination CDs from their offerings, with some also discontinuing three-year CDs [2][4]. - Currently, most banks are only offering large-denomination CDs with a maximum term of two years, and the availability of three-year CDs is limited or restricted to select clients [2][4]. Group 2: Interest Rate Trends - The interest rates for available large-denomination CDs have collectively dropped to the "1" range, with specific rates for different terms: for example, ICBC offers rates of 0.9% for one month and 1.55% for three years [3][4]. - The overall interest rates for two-year and shorter large-denomination CDs are concentrated between 0.9% and 1.4%, while three-year rates range from 1.55% to 1.75% [3]. Group 3: Bank Strategies - Banks are increasingly focusing on managing their funding costs, which has led to the withdrawal of medium to long-term large-denomination CDs as a strategy to stabilize net interest margins [4]. - The banking sector is under pressure to reduce funding costs, especially in a declining interest rate environment, which affects their willingness to attract long-term deposits at higher costs [4].