China Insurers Are Navigating Interest-Rate Change for 2025 Growth

We retain our fair value estimates for Chinese insurers after a recent regulatory announcement that establishes a dynamic adjustment mechanism for the pricing rate on life insurance products. The current pricing rate remains unchanged, as the latest published reference rate did not trigger the adjustment mechanism. While market concerns over insurers’ spread loss risks are likely to persist, the pricing adjustment mechanism, coupled with recent central bank warnings about risks in China’s overheated bond market—where long-term yields have reached record lows—should help support long-term rates and enhance insurers’ liability cost management.