Minsheng Securities: By 2025, insurance companies are expected to fully leverage the "Beta Amplifier" feature and continue to benefit.

Minsheng Securities released a research report stating that in the background of interest rate decline, major insurance companies are still actively allocating bonds, lengthening the duration to match assets and liabilities, and the overall proportion of bonds is trending upward, while the proportion of stocks is becoming more differentiated. With the current loose fund availability and the potential for interest rates to gradually stabilize, the stock market is expected to continue benefiting from improved liquidity. Insurance stocks are expected to continue benefiting from the "beta enhancer" feature and may continue to benefit from the logic of "asset-liability resonance" emphasized in 2025. It is recommended to actively pay attention to China Pacific Insurance (601601.SH), which has shown significant reform effects in the aviation industry, and steady performance at both ends of assets and liabilities, as well as China Life Insurance (601628.SH), New China Life Insurance (601336.SH), Ping An Insurance (601318.SH), and PICC P&C (02328). The main points of Minsheng Securities are as follows: The industry may be at the starting point of a new round of asset-liability resonance: the focus on the liability side is on continuous cost reduction and efficiency improvement in the sale of dividend insurance, which is expected to lead to a higher valuation of the sector in the long run. The high-level directive for the development of the insurance industry will continue to benefit both the liability and asset sides. Looking back on historical trends, asset-liability resonance has generated excess returns, and the sector is expected to show characteristics similar to the 2017 trend of "improved performance on the liability side and recovery on the equity side", with noticeable excess returns from insurance asset-liability resonance. Life insurance: gradually moving out of the adjustment period, towards high-quality development in the era of low interest rates. 1) Individual insurance: the scale of teams is stabilizing, the quality is constantly improving, and a new upward cycle is expected. 2) Bancassurance: With the relaxation of restrictions on the number of bancassurance partnerships and the integration of banks and insurance companies, the value contribution of bancassurance is expected to continue to increase, becoming an important increment to the NBV of insurance companies. 3) Products: Dividend insurance is expected to become the next mainstream insurance product, with regulatory guidance and support driving differentiation and refinement in insurance product development, and increasing supply of commercial health insurance. Against the backdrop of an aging population, the demand for basic pension and pension replacement is expected to drive rapid growth in savings, pension, and other products. Property insurance: focusing on the rebalancing of scale and value. The overall premium growth rate of property insurance is stable, but differences in COR performance have emerged due to frequent natural disasters in the first three quarters and differences in underwriting strategies. The high-level directive for the next stage of development in property insurance emphasizes the encouragement of institutional specialization, refinement, and intensive development. Support for large property insurance companies to become stronger and more competitive is expected to further improve the competitive landscape, with leading property insurance companies expected to strengthen their positions. Investment side: In the background of declining interest rates, major insurance companies are still actively allocating bonds, lengthening the duration to match assets and liabilities, the overall proportion of bonds is trending upward, and the proportion of stocks is becoming more differentiated. Regulatory guidance and encouragement for insurance funds and other long-term funds to enter the market, long-term equity investment is expected to become an important way for insurance companies to increase their allocation of equities, especially in the background of low interest rates and the implementation of new accounting standards, long-term equity investment is helpful for insurance companies to further cultivate patient capital and promote a virtuous cycle of "funds-capital-assets". Asset-liability matching and EV: the "art" of linkage. 1) The implementation of IFRS17 and IFRS9 standards has to some extent aggravated the short-term fluctuations in the balance sheet and income statement, but overall, it helps to better align the effects of interest rate fluctuations on both sides and better guide insurance companies to achieve asset-liability matching. 2) With the marginal improvement in the sale of dividend insurance, EV is expected to show a downward trend in sensitivity to investment returns, and the costs of new and existing liabilities of leading insurance companies are expected to reach a turning point. Risk warnings: Policies do not meet expectations, increased volatility in the capital markets, slower growth in household wealth than expected, interest rates fall further than expected, insurance reform falls short of expectations.