Every reporter: Tu Yinghao Every editor: Ma Ziqing
Following the reduction of deposit interest rates by major state-owned banks and joint-stock banks at the end of 2023, the yield of wealth management products has also declined. In the long run, the relative advantages of annuity insurance and increased whole life insurance with a fixed interest rate of 3.0% are prominent and are still respected by the market.
"This is a fixed pension with a predetermined interest rate of 3%, and the insured is over 70 years old, and it will reach a compound interest of 3.0%, which is one of the products with a better yield at present. Recently, a broker said when calculating the product income for reporters that due to factors such as "the integration of newspapers and banks", including the above products, a variety of high-yield insurance will be taken off the shelves by January 31.
Visual China Diagram by Liu Hongmei
However, during the investigation, the reporter noticed that in the context of the "good start" fading year by year, the insurance sales at the beginning of this year have not been as hot as before. An offline insurance agent said, "When the 3.5% interest rate product was 'withdrawn' last year, everyone seemed to buy everything they should have bought. This year, the company also set up a 'good start' activity, but everyone's enthusiasm is relatively average. ”
In an interview with the reporter of "Daily Economic News", Xu Yuchen, a senior insurance actuary, believes that there are three main reasons: first, under the dilution of "good start" under the regulatory requirements, the sales behavior of various companies and agents is relatively cautious; second, after the small sales climax in June and July last year, the current product innovation is similar, and the overall rate of return is relatively stable; third, the Spring Festival node is relatively late this year, and the current promotion of transactions is still in accordance with the daily rhythm.
Consumers are urged to "hurry up and get on the bus"
Since 2023, major commercial banks have experienced three rounds of "interest rate cuts". In June, September and December of that year, six major state-owned banks and 12 national joint-stock banks lowered their RMB deposit interest rates three times, which led to the reduction of deposit interest rates of small and medium-sized banks. The listed interest rate of three-year fixed deposit has entered the "2%" limit.
In the context of declining interest rates, the phenomenon of "deposit moving" has gradually emerged, and savings insurance such as annuity insurance and increased whole life insurance have become the "best choice" for guaranteed principal and income products.
Take a popular annuity insurance product as an example, the insured (36 years old) pays 10,000 yuan a year, pays for 10 years, and can receive 10,690 yuan per year from the age of 60 to life. From the perspective of the rate of return on the amount of money received and the cash value of the current year, when the insured is over 70 years old, the rate of return can reach more than 3%, and when the insured reaches the age of 80, the rate of return is close to the 3.5% level.
"This is one of the products with a higher yield on the market at present, and it is a popular product for insurance. An insurance broker recommended the product to reporters also said that now the industry not only has to adjust the predetermined interest rate, but also to change to the fourth set of life tables, for the future pension design, receiving, the longer the life, the annual amount will be reduced. It can also be understood that there will be a price increase.
As the standard of living improves and life expectancy increases, the life table needs to be dynamically adjusted. In general, the life table changes every 10 years or so. At present, the mainland uses the "Chinese Life Insurance Industry Experience Life Table (2010~2013)" (also known as the "third set of life tables") issued by the former Insurance Regulatory Commission. Recently, it was reported in the industry that under the guidance of the State Administration of Financial Regulation, the Actuary Association organized and completed the compilation of the fourth set of empirical life tables for the Chinese life insurance industry, and the "Chinese Life Insurance Industry Experience Life Table (2023) (Draft for Comments)" has been issued to life insurance companies and reinsurance companies for comments.
"Good start" is no longer emphasized?
Judging from the market research, the reporter said that due to factors such as the regulatory requirement of "integration of newspapers and banks", the attitude of various insurance companies and agents towards the "good start" this year is generally flat. Some agents said that the company has stopped emphasizing "good start" in recent years. Some agents also told reporters that although the company has recently carried out "good start" related activities, everyone's enthusiasm is relatively average.
In October 2023, the State Administration of Financial Supervision issued the Notice on Strengthening Management to Promote the Stable and Healthy Development of Life Insurance Business to all life insurance companies, supervising and standardizing the underwriting management of "good start" products, proposing to scientifically formulate annual budgets and strictly implement the integration of reporting and banking, and also requiring all life insurance companies to strengthen the management of sales channels, personnel and behaviors, and strictly prohibit misleading sales, forced bundling and other behaviors that infringe on the legitimate rights and interests of consumers.
With the full withdrawal of products with a predetermined interest rate of 3.5% from the market, in August 2023, the State Administration of Financial Supervision issued the Notice on Regulating Insurance Products of Bank Agency Channels, which restricts the commissions of bancassurance channels, requiring companies to clearly state the cost assumptions and fee structure in the actuarial report of the products sold through bank agents when filing the products, and list the upper limit of commissions, that is, requiring the commission fees of bancassurance channels to be "integrated with the bank".
Since then, the regulator also said that it is necessary to fully implement the "integration of newspapers and banks", and pay close attention to the "integration of newspapers and banks" of individual agency channels and brokerage agency channels. Industry insiders told reporters in an interview that this will further promote fair competition in the industry, including fair competition in product pricing in the insurance industry and fair competition in channel commission models.
In addition, the "Daily Economic News" reporter learned from the industry that some high-yield annuity insurance and increased whole life insurance products sold through Internet channels are facing withdrawal. Some insurance salespeople posted posters in the circle of friends, saying "hurry up and get on the car, don't wait for the obsolete", with the text "Affected by factors such as 'integration of newspapers and banks', a number of 'excellent' products will be off the shelves at the end of the month".
What is the future of endowment insurance?
"Throughout the history of the life insurance industry in mainland China, residents' demand for savings products has never been absent, which is reflected in different products that are selling well at different stages. According to a recent research report released by Kaiyuan Securities, since 2015, most of the top five premium contributions of listed insurance companies are savings products. Taking Chinese Life and Ping An as examples, most of the top five products in total premium contribution in 2015~2022 are savings products such as annuity insurance and comprehensive insurance.
The above-mentioned brokerages expect that with the further guidance of the regulator to reduce the cost of liabilities in 2023, insurance products will show a balanced development pattern of traditional savings products, dividend-paying savings products and long-term protection products in the future, and the insurance product pattern of the life insurance industry will enter a period of balanced structure.
Liu Yuqing, marketing director of China Taibao Life Insurance, told the "Daily Economic News" reporter in a recent interview that the ideal product structure in the future will move towards 40%, 30% and 30% diversification, of which savings insurance - increased whole life insurance and annuity insurance products will occupy about 70% of the market share.
Under the influence of factors such as the decline in interest rates, the switch of scheduled interest rates, and the "integration of newspapers and banks", there is no shortage of people in the industry who are worried about the short-term expectations of savings products. Yang Fan, general manager of Beijing Paipaiwang Insurance Agency Co., Ltd., said, "The current economic uncertainty will lead people to be more cautious when purchasing insurance products, limiting the development of the life insurance market; ”
"The demand for savings is determined, and under the downward trend of market interest rates, everyone's expectations for insurance yields are relatively rational. "In Xu Yuchen's view, it is also acceptable for (savings insurance) to sacrifice a little liquidity in the short term and make the yield higher.
National Business Daily