Core Viewpoint - The insurance sector is experiencing improvements on both asset and liability sides, with valuations and public holdings remaining low. The asset side, particularly influenced by the stock market, is expected to drive the sector's performance in 2024. [1] Group 1: Asset Side Factors - The stock market's strong performance in Q3 is anticipated to lead to a significant year-on-year increase in equity investments by listed insurance companies, potentially allowing Q3 net profits to maintain stable performance despite high base pressure. [1] - A stable long-term interest rate is favorable for the allocation of fixed-income assets in insurance, and if rates continue to rise, it will significantly benefit the valuation recovery of insurance stocks. [1] Group 2: Liability Side Factors - The annual New Business Value (NBV) is expected to maintain a rapid growth rate, and a reduction in the preset interest rate will accelerate the transformation of dividend insurance, improving liability costs. [1] - The adjusted preset interest rates for insurance products remain higher than bank deposits, making them relatively attractive, leading to optimistic expectations for new premium income by 2026. [1] Group 3: Historical Performance and Trends - Since the listing of insurance stocks in 2007, the insurance index has cumulatively increased by 165%, outperforming the market by 55%, with over half of the years achieving excess returns, particularly in 2014, 2017, 2022, and 2024, where excess returns exceeded 20%. [1] - The performance of insurance stocks is closely tied to stock market trends, long-term interest rates, and liability side performance, with historical data showing that bull markets are key catalysts for insurance stock performance. [2] Group 4: Recent Market Dynamics - Recent market dynamics indicate that the insurance sector's performance is driven by a combination of stock market gains and improvements in both asset and liability sides, particularly noted during the periods of 2022-2023 when the sector saw significant absolute and relative returns. [4]