The demand for hedging is strong, and dividend-paying insurance suddenly emerges as a new player in the market.

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A new round of “interest rate cuts” is coming again.

According to the pattern of “interest rate cuts” in bank deposit interest rates in the past two years, large state-owned banks, joint-stock banks, and small and medium-sized banks have shown the characteristics of “echelon” reductions, that is, large and medium-sized banks are the first to reduce interest rates, and other banks follow suit.

Recently, small and medium-sized banks from Henan, Yunnan and other places have issued intensive announcements, announcing reductions in time deposit execution interest rates. The deposit interest rate reduction ranges from 5 basis points to 45 basis points.

Although deposit interest rates have fallen repeatedly, the scale of deposits has increased instead of falling. After the deposit interest rates of various small and medium-sized banks have been reduced, they are still generally higher than those of major banks, and three-year and five-year large-denomination certificates of deposit have become increasingly difficult to obtain due to limited quotas.

Faced with the continued volatility of stock funds and the constant storms of trust products, investors with some spare money are staying away and continue to look for relatively stable financial products.

In fact, the demand potential for fixed-income products dominated by high-end customers is huge, and the gap between supply and demand will exist for a long time. Insurance products are still a worthy choice in the market. As life insurance products with a predetermined interest rate of 3.5% were removed from the shelves after July 31 last year, fixed-income products such as participating insurance have become increasingly popular and become the “new favorite” of the market.

　　Participating insurance, the next wave of trends in the life insurance industry

Life insurance products have multi-functional attributes. On the capital side, they are reflected in principal and minimum protection, various financial management and protection functions, and on the asset side, they are reflected in multi-variety cross-cycle investments. Therefore, life insurance products have also gained favor from the public because of their flexibility to adapt to the situation, introduce new products, and meet market needs.

Analyzing the products of each company, we can find that the current mainstream participating insurance has a guaranteed interest rate of 2%-2.5%, and the overall dividend interest rate is in the range of 3.5%-4.0%, which has a yield advantage among low-risk financial products.

In the fourteen years between 1999 and 2013, when China significantly cut interest rates and liberalized predetermined interest rates, participating insurance became a mainstream insurance product and one of the main fixed-income products in the financial market. Therefore, starting from 2023, as new asset management regulations break the rigid redemption rules and interest rates fall, it is inevitable that participating insurance will once again become a mainstream insurance product.

After all, traditional savings insurance can only temporarily meet the market demand during the high interest rate stage and cannot build a sustainable business model. At the same time, traditional insurance has also weakened the sales ability requirements of channel parties due to fixed interest rates and rigid redemption, and the competition among channel parties has evolved into pure fee competition.

CITIC Securities pointed out in its analysis that participating insurance can achieve win-win benefits for customers, shareholders and channels, and the business model is healthy and sustainable. From the perspective of customer interests, participating insurance provides guaranteed capital and minimum income, and the risk borne by the customer is very small. If a better investment environment comes, customers can also share the benefits through floating income.

From the perspective of shareholders, interest spreads come from the sharing of floating income, so the company needs to improve its asset allocation capabilities from a long-term investment perspective; dividend insurance requires the channel party to give a reasonable demonstration of the expected rate of return and reveal clear guaranteed and non-guaranteed benefits. , and only channels with professional capabilities will win.

Although many products can hit the current pain points of customers and meet their needs, if they want to be at the forefront of the trend of participating insurance, they also have higher requirements for the comprehensive strength of insurance institutions, because this is closely related to the dividends that customers can get. High and low.

How to choose participating insurance mainly depends on the insurance company’s past dividend realization rate, investment history data, and solvency, and these data are closely related to the company’s shareholder background and its own strength. The mainstream view in the industry is that you should not choose a company that is too small when buying participating insurance, but a company that is too big may not be able to give customers the greatest benefits.

Specifically, the typical characteristics of small companies are that their products are more radical and the investment burden is heavier, because in this way they can have hot spots to attract more customers; while large companies have too large investment assets, so it is difficult to refine their investments because the scale is larger. Big investments are harder to make, and quality investable assets are always scarce.

In order to achieve full investment without huge burdens, joint ventures have become the optimal solution because they can not only rely on the experience of foreign insurance shareholders through cycles, but their own investment burden will not be too heavy.

Currently, joint venture companies on the market are mainly divided into two categories: bancassurance and non-bancassurance. The former is mainly sold in the shareholder bank scenario. It is difficult for customers to obtain complete product information and comparison online, and the information transparency is relatively weak; non-bancassurance Three companies, such as Sino-British Life Insurance, Generali Life Insurance and Prudential Fosun, have more channels, so customers have more room for choice and comparison.

　　Fumanjia, the choice of “both want and want”

When participating insurance has become the main product in the current insurance market, a new round of product “involution” targeting customer interests has also begun.

It not only has better certainty, but also can achieve higher profitability without giving up liquidity. Sino-British Life and Huize Insurance sincerely launched the Sino-British Life Fumanjia whole life insurance (dividend type), which can It is said that it hits the heart of the policy holder perfectly.

Being able to stand out from the fierce market competition, Fumanjia’s advantage lies in its “minimum guaranteed 2.5% compound interest + expected dividend X” design. Specifically, Fumanjia not only ensures that customers receive a certain cash value of policy benefits, but also provides them with the opportunity to obtain potential surplus returns. By leveraging Sino-British Life’s long-term investment strength and dividend returns, it can achieve steady wealth appreciation.

Under the background that the predetermined interest rate of personal insurance has been reduced to 3.0%, the minimum guaranteed interest rate of Fumanjia is 2.5%, which is only 5 percentage points different from the fixed income maximum predetermined interest rate of 3.0%. This also means that the theoretical dividend realization rate reaches 35%. The dividend income can exceed the fixed income ceiling level of 3.0%.

From the perspective of certainty, Fumanjia guarantees that the income will be paid back in the fastest five years and exceed the closed period. The minimum guaranteed cash value of the contract will increase in compound interest at 2.5%, which is faster, higher and more stable than the market.

From the perspective of profitability, both the guaranteed income and dividend income of the product have significant advantages over the market. In addition, the payment of additional bonuses can allow the dividends to accumulate and generate more dividends, achieving faster and earlier interest appreciation and dividends. Surplus sharing helps customers better realize wealth appreciation and capital planning.

From the perspective of liquidity, Fumanjia belongs to the form of life insurance products. One product can meet multiple functions. According to the customer’s fund planning time and usage scenarios, such as financial management, education, marriage, pension, inheritance, etc., choose the appropriate one. Partially or completely withdrawn at the right time, the remaining policy benefits after withdrawal will still guarantee 2.5% compound interest and continuous accumulation of dividends, taking into account policy realization and income accumulation, so as to achieve a better balance between liquidity and profitability.

In order to meet the needs of more customers, Fumanjia has a wide coverage of insurance age. Anyone from 30 days old to 70 years old can apply for insurance. The payment period is flexible, and it can be paid in a lump sum or divided into 3 years, 5 years, and 6 years. , 10 or 15 years; the insurance period extends to lifetime, which can truly enable protection to span economic cycles.

The profit performance of Fumanjia’s products is even more eye-catching. With 5 years of payment and 7 years of exceeding the principal, the guaranteed IRR is as high as 2.3% in the long term, and the bonus IRR is as high as 3.7% in the long term. The bonus IRR in the 10th year can reach 2.8%, and in the 12th year The dividend IRR exceeds 3.0%, and the dividend IRR in the 24th year reaches 3.5%.

In recent years, in order to further protect the rights and interests of policyholders, supervision not only requires separate accounts, separate management, and independent accounting for dividends, but also requires regular disclosure of investment returns and historical dividend realization rates of insurance companies, making them more open and transparent than before.

In addition, supervision also has clear requirements for the actuarial design of participating insurance. Bonus demonstrations can only include interest differentials, and the dividend distribution ratio is uniformly at least 70%. Dividends must be distributed to customers in a large proportion. This also ensures that customers who have purchased Fumanjia can clearly understand own interests.

　　After three centuries of precipitation, it continues to travel through cycles

Participating insurance can be traced back to the United Kingdom more than 200 years ago. In 1776, when the British Equitable Life Insurance Company was doing its final accounts on its 15th anniversary, it was discovered that the premiums charged to policyholders in the early days of the company were a bit high, which resulted in the company having problems in its business operations. As a result, the company decided to return part of its operating profits to policyholders, which is recognized as the earliest life insurance dividend in the world.

As a professional and objective intermediary platform, Huize is committed to bringing better products and services to customers. This time, Huize has chosen to jointly launch Fumanjia dividend insurance with Sino-British Life Insurance Company. It is not only optimistic about the competitiveness of the product itself, but also optimistic about the insurance company. Advantages of joint venture background. Participating insurance is an insurance type that originated in the UK, and the British shareholders undoubtedly have rich business experience.

Public information shows that the Chinese and foreign shareholders of Anglo-British Life Insurance are all Fortune 500 companies, with COFCO and British Aviva Insurance each holding 50% of the shares. Among them, COFCO is a state-owned enterprise directly under the State Council and is a world-renowned grain merchant; foreign shareholder Yingjie Huawei was founded in 1696 and has a history of more than 300 years. It is an insurance company used by the British royal family and is the sixth largest insurance group in the world.

Judging from the historical dividend realization rate that customers are most concerned about, Sino-British Life’s official website disclosed that in 2022, the dividend realization rate of the company’s 36 participating insurance products will reach more than 100%. It can be seen that Sino-British Life not only has a wide range of participating insurance products and rich experience in operating participating insurance, but its dividend strength is also among the best in the industry.

Of course, dividends also come from the ability of the investment side. Industry exchange data shows that Sino-British Life’s comprehensive investment rate of return in 2023 is 6.42%, ranking among the top 2 in the industry. The average comprehensive investment rate of return in the past three years is 5.93%, ranking among the top 4 in the industry. In terms of solvency, Sino-British Life’s comprehensive solvency in the fourth quarter of 2023 was 273.5%, and its core solvency was 167.1%. It has received regulatory Class A evaluations for 29 consecutive quarters.

As a first-tier joint venture company in the industry, Sino-British Life Insurance has a balanced 50% shareholding ratio among foreign shareholders. It not only has the label of a big-name central enterprise that is trustworthy and not aggressive, but can also draw on the century-old operating experience of established foreign-funded insurance companies. This also allows The company pays more attention to compliance in its overall operations, with less historical burden and a more steady pace.

The business covers 18 provinces and cities across the country. Sino-British Life Insurance also provides a wide range of value-added rights and interests. In order to bring real value and services to customers, Fumanjia products can also be paired with high-quality universal accounts, retirement communities, and health management service rights. .

In response to the current hot demand for elderly care, Sino-British Life’s health care “YOUNG Plan” is spread across 66 major cities across the country, and cooperates with 248 elderly care institutions to provide more than 100,000 elderly care beds. By purchasing this insurance product and reaching a certain amount, the customer himself, his spouse and both parents will have the opportunity to qualify for entry into a retirement community.

It can be seen that no matter from which angle it is analyzed, Fumanjia is very “anti-attack” and is a participating insurance product with excellent performance in all aspects. In the environment of downward interest rates, compared with the traditional 3.0% predetermined interest rate incremental life insurance products, Fumanjia sacrifices 0.5% of the guaranteed part to game for potential more returns. This is the premise of ensuring the bottom line of 2.5% interest. It is the best of both worlds to enjoy future development dividends and survive the economic cycle.

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