Core Viewpoint - The continuous reduction of the predetermined interest rate for life insurance over the past three years has led to dividend insurance becoming a key focus for many insurance companies, as it offers both guaranteed and floating returns, making it an attractive product in a low-interest-rate environment [1][3]. Product Structure Transformation - Dividend insurance has a smaller reduction in predetermined interest rates compared to ordinary products, enhancing its yield advantage [3]. - The design of dividend insurance, which includes guaranteed benefits and non-guaranteed dividends, helps to mitigate the liability pressure on insurance companies and reduces long-term interest rate risk [3][4]. Investment Strategy and Management - The investment team at the company has established a combination management framework called "tactical, scenario, and strategic warehouses" to balance short, medium, and long-term investment goals [1][8]. - The company aims to enhance the competitiveness of dividend insurance through a robust investment system that includes good teams, strategies, projects, performance, and dividends [9]. Dividend Characteristics and Distribution - The source of dividends in dividend insurance comes from surplus generated when actual operating conditions exceed pricing assumptions, primarily from interest margin, mortality margin, and expense margin [6]. - The company is committed to distributing at least 70% of the distributable surplus to policyholders, ensuring a fair share of the operating results [6][10]. Stability and Fairness Mechanism - The smoothing mechanism, referred to as the special reserve for dividend insurance, is designed to protect the long-term interests of policyholders by stabilizing dividend levels across different economic cycles [11][17]. - The mechanism allows for the accumulation of excess returns in good years and draws from reserves in poor years, ensuring a balanced approach to dividend distribution [11][12]. Governance and Transparency - The management of dividend insurance funds is conducted independently, with strict internal controls and annual audits by third parties to prevent misuse of the smoothing mechanism [14][15][16]. - The company adheres to regulatory requirements and its own dividend policies to ensure sustainable and stable returns for customers [12][13].

Summary of China Life Insurance Conference Call Company Overview - **Company**: China Life Insurance - **Focus**: Insurance products and investment strategies for 2026 Key Points Product Strategy for 2026 - The product strategy will focus on diversified participating insurance, including whole life insurance, participating annuities, and participating retirement annuities [2][4] - The plan is to launch large-scale products first, followed by 10-year premium payment products [2][4] - The individual insurance channel's share of participating insurance is expected to increase due to a decrease in the preset interest rate [2][7] Distribution Channels - The bancassurance channel is projected to maintain high growth rates, becoming a significant driver for business development [2][5][13] - Collaboration with major banks and financial institutions will be deepened to expand business mechanisms [2][13][14] Investment Strategy - The proportion of equity investments increased significantly in the first three quarters, with a potential for further growth, but caution is advised regarding style switching and market rhythm [2][16] - A high dividend portfolio is targeted, with a required dividend yield of 4.5% and an annualized total return of no less than 6% over a three-year rolling period [2][17] Individual Agent Development - The quality of the personal agent team is being enhanced through strict assessments and improved recruitment standards [2][9][10] - The core team has shown stable performance, with increased productivity and income, leading to improved retention rates [2][10][11] Health Insurance Outlook - The insurance product structure is balanced, with approximately one-third in savings insurance, health insurance, and other types [2][11] - Long-term prospects for health insurance are positive, although short-term growth may be limited due to policy constraints [2][11][12] Regulatory and Market Considerations - The company is preparing for the 2026 business landscape by gathering market feedback and training agents [4][5] - The focus will be on risk management and preventing interest rate risks while increasing the share of participating insurance [8][11] Future Projections - The company maintains confidence in the growth of both scale and value for 2026, supported by the performance of individual and bancassurance channels [5][6] - The expected range for domestic interest rates is between 1.6% and 2.1%, influencing fixed-income strategies [3][25] Capital Management - Currently, the company has a sufficient solvency margin and is flexible regarding capital replenishment plans [28] - The dividend strategy aims for stability and growth, rather than direct linkage to net profit fluctuations [28] Conclusion - China Life Insurance is strategically positioning itself for 2026 with a focus on diversified products, strong distribution channels, and a robust investment strategy while maintaining a balanced approach to risk management and regulatory compliance [2][4][5][6][11][28]