Core Viewpoint - The insurance industry is entering a new phase of "interest rate cuts," with the first move made by Tongfang Global Life Insurance, which has reduced the preset interest rate of its new dividend insurance products from 2% to 1.5% [2][6]. Group 1: Market Trends and Regulatory Changes - The downward trend in interest rates has been significant, with the 10-year government bond yield dropping to 1.64% as of June 23, 2024, which is below the preset interest rate cap for ordinary life insurance products [6][9]. - The Financial Regulatory Bureau has implemented a mechanism to link preset interest rates with market rates, requiring timely adjustments when preset rates exceed a certain threshold [9][5]. - This marks the third reduction in preset interest rates for insurance products in two years, with ordinary life insurance rates decreasing from 4.025% to 2.5% [6][5]. Group 2: Risks and Challenges - The long-term inversion of interest rates poses significant risks for insurance companies, as the declining investment returns pressure the income side while the liability side remains rigid [7][8]. - Companies face challenges in investment decision-making, as investing heavily in long-term bonds may not cover liability costs, while a lack of stable returns could lead to systemic risks [8][11]. Group 3: Product Strategy and Development - Tongfang Global Life has adopted a balanced multi-product strategy, offering both dividend and non-dividend products, as well as savings and pension products to meet diverse customer needs [13][12]. - The company is focusing on risk-sharing products, including dividend and universal insurance, as well as protection products like term life and high-end medical insurance [13][14]. - There is a push for innovation in product offerings, particularly in risk-sharing products, to better align with market demands and mitigate interest rate risks [16][17]. Group 4: Future Outlook - The insurance industry is expected to continue adjusting preset interest rates downward, with predictions of further reductions around August [9]. - The development of new product types, such as index-linked universal insurance and guaranteed investment-linked insurance, is recommended to enhance market acceptance and provide minimum guarantees [17][18].