Shenwan Hongyuan Group: The life insurance preset interest rate of 1.94% has achieved two consecutive increases, maintaining the traditional insurance preset interest rate unchanged for the whole year.

Shenwan Hongyuan Group released a research report stating that the performance of the insurance sector has reached a peak of joy, and under the impact of high base number and the new version of the bancassurance policy "bank-insurance integration", the asset-liability performance may face temporary pressure. Some previously oversold targets may have relatively increased attractiveness, and some targets, as weights in the Shanghai and Shenzhen 300 Index, are significantly underweight. If the market style switches/fundamental concerns reduce, they have strong upward potential. Shenwan Hongyuan Group's main points are as follows: The research value of the scheduled interest rate in 2Q26 increased qoq by +1bp to 1.94%, achieving a continuous increase for two consecutive quarters. On July 20, the Insurance Association organized the second quarter meeting of the Expert Consultation Committee on the Research Value of Interest Rates in the life insurance industry in 2026, proposing that the current research value for ordinary life insurance products is 1.94%, up by +1bp qoq, achieving a continuous increase for two consecutive quarters, with a 5bps increase from the lowest point. According to the "Notice on Matters Related to Establishing the Linkage and Dynamic Adjustment Mechanism between the Scheduled Interest Rate and Market Interest Rate" issued by the Banking Regulatory Commission, when the highest value of the scheduled interest rate for ordinary life insurance products is higher than the research value by 25bps for two consecutive quarters, it needs to be adjusted promptly. The current research value (1.94%) is 6bps less than the traditional insurance rate cap (2.0%), far from meeting the trigger condition, so the traditional insurance rate cap remains unchanged. It is judged that the traditional insurance rate for the whole year will remain unchanged, and it is expected that the research value in 3Q26 will be 1.93%. The research value of the scheduled interest rate is anchored to 5-year LPR, 5-year fixed deposit, 10-year bond yield rates, etc., and involves long-term interest rates such as the 250-day moving average and the 750-day moving average. If the current values of the 5-year LPR, 5-year fixed deposit, and 10-year bond yield rates remain stable, it is expected that the research values in 3Q26/4Q26 will be 1.93%/1.88%, showing a slight decline compared to the previous quarter under the effect of the previous long-term interest rate fluctuations, but still with sufficient safety margin compared to the trigger line of the 25bps difference above the scheduled interest rate cap. It is judged that the traditional insurance rate for the whole year will remain unchanged. Under the expectation of the previous adjustment of the scheduled interest rate, the pulse-like sales short-term effects may be difficult to replicate, and the business promotion pace is expected to return to normal. The high performance base in 3Q25 may pose a certain challenge to the liability growth rate in the third quarter. The mid-term adjustment of differentiating the scheduled interest rates of dividend insurance products remains to be observed, and it is expected to remain stable in the short term. With the asymmetric downward adjustment of scheduled interest rates in September 2025, coupled with the steady progress of insurance funds entering the market, the relative attractiveness of dividend insurance products has significantly increased. According to the solvency report, the premium size of dividend insurance accounted for 48% of the total premium size of the top five products of 54 life insurance companies in 1Q26, ranking first. Dividend insurance products have officially taken over as the main product, and the importance of precise management of dividend insurance by insurance companies is expected to gradually increase. In December 2025, the China Banking and Insurance Regulatory Commission issued the "Regulations on the Asset-Liability Management of Insurance Companies (Draft for Solicitation of Comments)", which specifically mentioned that the liability fund cost of the dividend account includes guaranteed costs and policyholder dividends; meanwhile, based on the essence of operations, some insurance companies have further shifted their assessment of the liability cost of dividend insurance from a rigid cost dimension towards a "rigid + flexible" full-caliber orientation. Some insurance companies have previously launched dividend insurance products with a scheduled interest rate of 1.25% and actively explored differentiated business strategies during their high-quality development stage. Risk warning: Regulatory policy impact exceeds expectations, market volatility intensifies, long-term interest rates decline, and the impact of major disasters exceeds expectations.