September 16, the People's Bank of China for the first time since 2004 to lower the benchmark lending interest rate again on October 8 RMB deposits and loans to lower the benchmark interest rate 0.27 percentage points each.
It was of the view that interest rates may increase the insurance company's net assets. However, the insurance company's bond holders to take the main due to the form, are not covered by the bond market, the price impact of Change; In addition, some bonds to be sold under the category of assets, but most of which are unlisted bonds, they also Can only be shared in accordance with the recorded value. As a result, the net assets of insurance companies will not cut interest rates and as a result of additional increases.
On the other hand, lowered deposit and loan interest rates at the same time the abolition of interest tax, insurance is an "asymmetric" rate cut. In the three-year time deposit rates remained at the adjusted 5.13 percent, while the five-year time deposit interest rates by 5.56 percent but rose to 5.58 percent, medium and long-term time deposit rate is actually far lower, so the cost of capital life insurance policies in force pressure Have not been effective mitigation.
In the policy has not been cut costs and the decline in the background, the insurance investment income may have to cut interest rates fell and the insurance profit margins will be squeezed further. Out of concern for the real economy, the stock market in the short term is difficult or good investment opportunities, access to investment income from insurance companies is unlikely.
Ruoshi market, the investment of insurance funds have been unable to get a good return on the stock market, despite the universal risk of stock market investment ratio of only 15% had a limited impact. However, if the stock market over the next two years Ruoshi situation has not changed, coupled with the advent of the rate cut cycle, universal insurance billing rates may continue to slide down.
A company's security department of the Bank, the reduction in interest rates in the short term, the agreement will affect the large deposit interest rates, so that the deposit insurance agreement in respect of income declined. As the universal risk of insurance capital in bond market investments accounted for a large percentage of the bank to cut interest rates for the bond market is a good, hot lead to the bond market, insurance companies owned by the hands of the bonds can be spread or Such as buy-back operation, so as to stabilize the whole community will benefit.
However, universal insurance in August and September billing rate has dropped 5.58 percent after the rate cut and the 5-year time deposit interest rates compared to the current market universal insurance settlement of only 5.25 percent interest rate and even lower the risk of universal competition Only advantage of the protection functions. The major investment in bonds and the IMF's monetary and debt-for-linked insurance is expected to account for the city to borrow well upgrade and earnings, stock-based account of the performance of A shares will depend on the trend.
It is understood that the insurance industry to cut interest rates on the investment environment there will be some lag effect, universal insurance, even for the insurance settlement is based on interest rates, adjusted quarterly, the rate cut, interest rates have settled down they may be. A life insurance company's head of the view that interest rates for universal life insurance company's risk can be described as mixed, is expected in the future, universal insurance settlement of the interest rate will not be larger decline, but in a more stable track Run, but in the short term interest rates may have settled down slightly, the insurance risk omnipotent people, can create long-term financial management concepts.
In addition, even for the insurance account is linked to the stock market and the stock market will affect the investment income Change. The industry that interest rates have a positive impact on the stock market, once the rising stock market, investment-linked insurance investment income accounts will also rise. Even insurance accounts for some low-risk type of currency accounts, these accounts is a major investment bank certificates of deposit and bonds, the impact on dividends and similar risks.
Dividends in terms of risk, the investment bank focused on wholesale deposits and bonds, after the rate cut of the proceeds of these products will be lowered then. Insurance companies to lower investment income, dividends to policy holders will naturally be reduced, for long-term insurance policy holders, will be dampened. However, the industry pointed out that the cost of insurance a month before a transfer clearing interest rates, dividends will not be released until a year insurance, relatively slow response.
Rate cut would "force" the life insurance industry to adjust their business structure to protect the return. Demand for life insurance products to protect is no substitute for the functions of the product will be returned to security. On the one hand, due to financial product sales will be certain difficulties, the sales channels will be more inclined to turn to selling security products. On the other hand, with the benchmark interest rate cut, with 2.5 percent of the price gap between the interest rates are reduced, sales are more difficult to reduce.
Insurance experts stressed that as ordinary people, not to whether the central bank to cut interest rates, universal insurance settlement if the interest rate cut as the basis for the purchase of insurance, but to "buy insurance protection is to buy" concept in the first place, and value-added investment Is not a core function of insurance.
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