Core Viewpoint - The recent notification from the Ministry of Finance aims to guide insurance funds towards long-term stable investments by adjusting the assessment methods for net asset return and capital preservation, implementing a three-tier evaluation system starting from 2025 [1] Group 1: Changes in Assessment Methods - The new assessment framework for insurance companies includes annual indicators, three-year cycle indicators, and five-year cycle indicators with respective weights of 30%, 50%, and 20% [1] - The previous version of the notification had a simpler assessment method with both annual and three-year indicators weighted equally at 50% [1] Group 2: Benefits of Long-Cycle Assessment - Long-cycle assessments can mitigate short-term investment behaviors, allowing companies to focus on identifying and holding long-term valuable assets [2] - In a low-interest-rate environment, insurance funds are pressured to enhance returns, which may require increasing equity investment ratios while ensuring long-term returns through careful stock selection [2] Group 3: Implementation Challenges - The effectiveness of long-cycle assessments relies on translating the pressure of these assessments to individual employees, necessitating a well-structured performance evaluation system [3] - Recommendations include establishing comprehensive investment decision accountability records for employees and optimizing the performance evaluation system to consider contributions from previous investment managers [3] Group 4: Compensation Mechanism - A deferred compensation mechanism is suggested, where the performance-based pay for key decision-makers could be increased to over 60%, with a payment period extending to five years [4] - This approach aims to ensure that the long-term investment philosophy is effectively integrated into the company's operational framework [4]