HK Stock Market Move | Afternoon decline in domestic insurance stocks widens, scheduled rate of return for insurance products to be lowered in September, new business structure accelerating towards dividend insurance.

Domestic insurance stocks fell further. As of the time of writing, New China Life Insurance (01336) fell by 4.17% to 48.2 Hong Kong dollars; China Life Insurance (02628) fell by 3.52% to 21.95 Hong Kong dollars; China Pacific Insurance (02601) fell by 3% to 30.7 Hong Kong dollars; and PICC P&C (02328) fell by 0.37% to 16.26 Hong Kong dollars. On the news front, the mechanism for lowering the designated interest rates of insurance products has officially been launched, with major insurance companies actively promoting the switch of new and old products. The latest data released by the China Insurance Industry Association shows that the research value of the designated interest rate of ordinary life insurance products is 1.99%, a decrease of 14 basis points from the previous period. This value has been lower than the current designated interest rate by more than 25 basis points for two consecutive quarters, triggering the dynamic adjustment mechanism of the designated interest rate for life insurance industry. Soochow released a research report suggesting that the downward adjustment of designated interest rates will drive the continued decrease in the new business liability costs of insurance companies, along with the gradual dilution of existing businesses, leading to a gradual improvement in the average costs of existing businesses. After the adjustment of designated interest rates, the guaranteed returns of dividend insurance products are only 25 basis points lower than traditional insurance products, and with the design of floating returns, they are more attractive to customers. It is expected that the structure of new business will accelerate towards dividend insurance, and the increase in the proportion of dividend insurance will further alleviate the pressure of rigid costs on insurance companies.