Core Viewpoint - The insurance industry in Tibet is evolving to meet the unique challenges posed by its high-altitude environment, providing essential support for local economic development and risk management [1][8]. Group 1: Insurance Product Innovation - The insurance sector has developed specialized products to address the unique risks faced by local farmers and herders, such as the introduction of commercial insurance for the white cashmere goat, which has increased coverage per goat by 500 yuan [2][3]. - The insurance company has tailored insurance solutions for border patrol personnel, covering personal accident and medical insurance to mitigate risks associated with extreme environmental conditions [3][7]. - Various insurance companies have launched products like high-altitude disease medical insurance and "Tibetan cattle and sheep insurance," enhancing the range of options available to residents and businesses [3][8]. Group 2: Service Accessibility and Community Support - The establishment of the first county-level police-insurance service station in Tibet has improved accessibility for residents, significantly reducing the distance and time required to process insurance-related tasks [4][5]. - Insurance companies are actively involved in community projects, such as providing financial support for ecological initiatives that promote rural revitalization, resulting in significant income generation for local communities [6][8]. - The insurance industry has enhanced service quality through online insurance applications, multi-channel claims processing, and consumer rights protection initiatives [6][8]. Group 3: Technological Integration - The use of technology in the insurance sector has improved service efficiency, with innovations like electronic ear tags for livestock enabling precise risk assessment and claims processing [7][8]. - The insurance company has reported significant growth in livestock insurance, with 304,000 Tibetan cattle insured, reflecting a 1.3 million head increase year-on-year, and providing risk coverage of approximately 1.67 billion yuan [7][8]. - The overall insurance premium income in Tibet reached 5.206 billion yuan in 2024, marking a 5.46-fold increase since 2012, indicating robust growth in the sector [8].

Investment Rating - The investment rating for the insurance industry is "Outperform the Market" (maintained) [1] Core Viewpoints - The insurance industry has seen a cumulative premium income of CNY 47,999 billion as of the end of August 2025, representing a year-on-year growth of 9.63%, with the growth rate expanding for five consecutive months [2] - The growth in premium income is driven by savings-type insurance products, particularly dividend insurance, which has led to a continuous recovery in the industry's premium growth [2][17] - The adjustment of the predetermined interest rates for traditional, dividend, and universal insurance products to 2.0%, 1.75%, and 1.0% respectively has catalyzed a short-term increase in premium income due to "buying before suspension" behavior [2][17] - The attractiveness of traditional insurance products is expected to decline as predetermined interest rates decrease, making dividend insurance a core product in a low-interest-rate environment [2][17] Summary by Sections Premium Income Overview - As of August 2025, the life insurance sector achieved a cumulative premium income of CNY 37,999 billion, with a year-on-year growth of 11.32%, and a monthly growth rate of 47.24% [3] - The breakdown of premium income shows that life insurance, health insurance, and personal accident insurance generated CNY 29,746 billion, CNY 5,784 billion, and CNY 268 billion respectively, with year-on-year changes of +14.05%, -22.07%, and -57.57% [3] Predetermined Interest Rate Adjustments - The predetermined interest rates for various insurance products have been adjusted, with the current rates being 2.0% for ordinary products, 1.75% for dividend insurance, and 1.0% for universal insurance, reflecting a reduction of 50 basis points, 25 basis points, and 50 basis points respectively [6][7] - The downward adjustment of predetermined interest rates is expected to support the expansion of premium income in the short term and improve the liability side of insurance companies [7] Product Dynamics - Dividend insurance is characterized by a "low guaranteed return + high floating return" structure, which allows insurance companies to share investment risks with policyholders, thereby reducing rigid repayment costs [12] - The demand for dividend insurance is anticipated to grow, especially in the context of declining returns from wealth management tools, making it a core choice for yield-driven clients [12] Property Insurance Performance - As of August 2025, property insurance companies reported a total premium income of CNY 12,201 billion, with a year-on-year growth of 4.67%, and the non-auto insurance segment showing a growth rate of 5.0% [14]

Group 1: Report Information - Report Title: "Analysis of Insurance Funds' Bond Allocation Logic and New Trends" [1] - Report Date: August 24, 2025 [1] Group 2: Industry Investment Rating - No industry investment rating is provided in the report. Group 3: Core Views - The growth rate of insurance premium income has weakened, while the investment in stocks and bonds has strengthened. Insurance funds' overall investment intensity has increased significantly against the trend of premium income [2][17]. - When allocating bonds, insurance funds need to consider both increasing returns and smoothing fluctuations. They should choose the optimal solution by comprehensively considering tax costs, capital occupation costs, and adapting to new accounting standards [4][5]. - The reduction of the预定利率 of insurance products is expected to have limited impact on boosting the bond market allocation power. The trading attribute of insurance bond allocation has shown certain trends in a low - interest - rate environment [7][8]. Group 4: Insurance Funds' Investment Overview Overall Investment Intensity - Premium income is the cornerstone of the liability side for insurance funds' asset investment. Life insurance products account for about 60% of premium income, and their scale changes directly affect the overall premium income trend of the industry. After the "panic - buying before product discontinuation" craze subsided in the second half of last year, the growth rate of life insurance premium income weakened significantly, dragging down the overall performance of the industry [13][14]. - In contrast, the overall investment intensity of insurance funds has increased significantly against the trend. Since the second half of 2024, the year - on - year growth rate of the balance of insurance funds used by life insurance companies has increased from 15% in Q2 2024 to 18% in Q2 2025, and that of property insurance companies has increased from 5% to 11%. The ratio of "accumulated new insurance funds used after deducting investment income in the current year/accumulated new premium income" also shows that the subjective investment willingness of insurance funds is relatively strong [17]. Investment Allocation - From the perspective of asset allocation, bonds and stocks are the main areas of investment. The bond investment proportion of life insurance companies has been steadily increasing, with a quarterly increase of about 1 pct since the second half of 2024. The bond investment proportion of property insurance companies has increased by 3 pcts in three quarters since Q4 2024 [26][30]. - The stock investment proportion of both life and property insurance companies has increased by 1.8 pcts since Q2 2024. The reasons include the good performance of equity assets and the policy - driven increase in risk appetite. The Hong Kong stock market's high - dividend assets have shown strong performance, and about 63% of surveyed institutions plan to increase their investment in Hong Kong stocks in 2025 [31]. Group 5: Considerations for Insurance Funds' Bond Allocation Bond Allocation Structure Overview - Insurance funds account for about 9.32% of the Chinese bond market. As of June 2025, local government bonds accounted for 47% of the insurance bond portfolio. In the secondary cash - bond market, ultra - long - term local government bonds have accounted for more than 50% of the net purchase scale of insurance since November 2024 [3][41][46]. Increasing Returns: Tax and Capital Occupation Costs - Tax Costs: Before August 8, 2025, insurance self - operated funds' bond investment income was subject to value - added tax, value - added tax surcharge, and income tax. After August 8, the interest income of newly issued government bonds and financial bonds resumed VAT collection, but government bonds still have significant tax advantages [52]. - Capital Occupation Costs: The "C - RISK II" Phase II regulatory system will be fully implemented in 2026. Insurance companies, especially small and medium - sized ones, are under pressure to meet solvency requirements. Life insurance companies can improve solvency by extending bond investment duration, while property insurance companies should choose bonds with shorter duration and higher credit ratings to reduce capital occupation costs [54][63]. Reducing Fluctuations: Adapting to New Accounting Standards - Under the new IFRS9 and IFRS17 accounting standards, insurance companies need to shorten the duration gap to reduce net asset fluctuations, so they have a more rigid demand for long - term bonds. They are also expected to be more cautious in allocating bank secondary capital bonds and credit bond sinking [73][74]. Group 6: Adjustment of Bond Allocation Structure Local Government Bonds - Insurance has an absolute preference for 20Y and 30Y local government bonds, and the secondary - market purchase scale mainly depends on supply. However, its influence on pricing power is not absolute [77][80]. Treasury Bonds - The purchase of new treasury bonds has weakened, and insurance needs to free up positions first. Old treasury bonds with maturities of less than 7Y and between 20 - 30Y are mainly sold [89]. Policy Financial Bonds - Insurance rarely participates in policy financial bonds in both primary and secondary markets, and the existing positions remain stable [6]. Credit Bonds and Perpetual Bonds - The net purchase scale of credit bonds depends on the overall bond - allocation strength of insurance funds, and the allocation of perpetual bonds has changed from purchase to continuous reduction [6]. Group 7: New Trends and Issues in Insurance Bond Allocation Impact of Insurance Product Predetermined Interest Rate Reduction - The reduction of the predetermined interest rate of insurance products is expected to have limited impact on boosting the bond market allocation power. The expansion speed of the insurance liability side may slow down in the long term, and the relative attractiveness of the equity market is more prominent [7]. Trading Attribute of Insurance Bond Allocation in a Low - Interest - Rate Environment - Since 2023, insurance has rarely significantly reduced bond allocations, and the probability of significant increases has increased year by year. In 2025, the willingness to increase the allocation of bonds with maturities over 10Y has further strengthened, and the probability of selling such bonds to realize floating profits when interest rates decline significantly has also increased [8].

Core Insights - The insurance industry continues to show growth momentum in the first half of the year, with both life insurance and property insurance performing well [1][2] - In June, life insurance companies reported a significant year-on-year premium income growth of 16.3% and a month-on-month increase of 21.5% [2] Life Insurance Sector - In the first half of the year, life insurance premium income reached 2.96 trillion yuan, a year-on-year increase of 5.6%, while total premium income was 3.35 trillion yuan, up 4.5% year-on-year [2] - The original insurance premium income for life insurance in June was 490.8 billion yuan, reflecting a strong growth trend [2] - Specific business segments showed varied performance: life insurance premium income was 2.2876 trillion yuan (up 6.6%), health insurance was 461.4 billion yuan (up 0.15%), while personal accident insurance declined by 6% to 21.6 billion yuan [2] - New policyholder investment contributions decreased by 3% for universal insurance and by 20% for investment-linked insurance [2] - A recent adjustment in the guaranteed interest rates for traditional, participating, and universal life insurance products is expected to shift new business towards participating insurance [3] Property Insurance Sector - The property insurance market is stable and improving, with premium income reaching 964.5 billion yuan in the first half of the year, a year-on-year increase of 5.1% [4] - In June, property insurance companies reported premium income of 183.9 billion yuan, a 4.6% year-on-year growth [4] - Breakdown of property insurance premiums includes: 450.4 billion yuan from auto insurance, 160.9 billion yuan from health insurance, 109.1 billion yuan from agricultural insurance, 79.9 billion yuan from liability insurance, and 29.1 billion yuan from accident insurance [4] - The rise in premium income is attributed to the high penetration rate of new energy vehicles, which accounted for 45.8% of total new car sales in June [4]