How to Promote High-Quality Development of the Insurance Industry in a Low-Interest-Rate Environment

Abstract: Recently, the China Finance 40 Forum (CF40) held a closed-door seminar on the theme of “The Insurance Asset Management Industry in a Low Interest Rate Environment.”

Experts unanimously agreed that China’s low-interest-rate environment is likely to persist for some time, which would lead to declining returns across various asset classes, heightened risks of interest rate spreads for insurance companies, and significant challenges to long-term insurance fund investments.

Drawing on the experiences of the insurance industries in Japan, the United States, and Germany in responding to low-interest-rate environments, the key measures identified include: lowering assumed interest rates, optimizing product structures, enhancing cost management on the liability side, and extending bond durations, appropriately increasing credit risk exposure, expanding alternative investments, and increasing global asset allocation on the asset side. Experts also emphasized that while these experiences can serve as valuable references, adapting them to China’s context requires addressing certain practical challenges.

Experts proposed that insurance companies should transform their operations across three dimensions—products, liabilities, and assets—to improve management capabilities, achieve effective asset-liability matching, and comprehensively enhance investment management capabilities. This transformation would provide a solid foundation for the stable development of core insurance businesses. At the same time, the insurance industry seeks regulatory support in the following areas: (1) Guiding insurance companies to strengthen integrated asset-liability management. (2) Supporting insurance institutions in diversifying their investment channels, such as moderately relaxing overseas investment policies. (3) Encouraging the establishment of long-term assessment systems.