Late-night chaos! Bank deposit exodus, trillions of funds are pouring into this 'full guarantee' insurance. What unspeakable secrets are hidden behind it?

At the start of 2026, the insurance market sent out two signals, like two needles piercing into the nerves of the financial system.

The first needle is on the asset side: On April 24, the China Insurance Association announced that the research value of the reserve interest rate for ordinary life insurance is 1.93%, rebounding by 4 basis points from January, ending a continuous downward trend. The upper limit of 2.0% is still 7 basis points away, not touching the regulatory red line of a 25 basis point adjustment—meaning the probability of further short-term cuts has sharply decreased, and industry expectations finally took a breather.

The second needle is on the liability side: In the first quarter, total insurance premiums reached 23.1 trillion yuan, with life insurance companies accounting for 17.8 trillion yuan. Annuities, two-way protection, and increasing whole life insurance products are the main drivers of savings-type products, and their business share remains high among leading insurers.

One stable, one growing, behind which hides a quiet migration of residents’ wealth.

Where does the money come from? It flows out of traditional savings channels. As the interest rate center continues to decline, residents’ defensive savings mentality gradually solidifies, and deposits are becoming more fixed-term. Commercial banks are under pressure from rising liability costs. By the end of Q4 last year, the overall net interest margin of banks had fallen to 1.42%, with an annual average of 1.5%. After a series of reductions in listed interest rates, high-cost funds can no longer be retained and are starting to seek refuge in the non-bank system.

The two traditional major channels—bank wealth management and public funds—are both struggling right now.

After the full rollout of net asset value (NAV) products, the returns of wealth management products are tightly linked to the fluctuations of underlying assets. During the volatile market from 2025 to early 2026, the scale of fixed-income products backed by bonds and non-standard assets fluctuated sharply, with many products experiencing net value declines, shattering investors’ perceptions of “stability.” According to data from the Bank of China Wealth Management Registration and Custody Center, as of the end of Q1, the outstanding scale of wealth management products was 31.91 trillion yuan, down 1.38 trillion yuan from the end of last year. Yields also dropped, with the average annualized yield in March only 1.01%, compared to 2.11% in February and 3.71% in January—an outright plunge. The wealth management market is showing signs of sluggish growth.

On the public fund side, equity products are highly correlated with stock market performance. In recent years, with persistent market volatility and style rotation, fund manager performance has diverged. The gap between retail investors’ actual returns and fund yields has gradually eroded confidence. New fund issuance has cooled, with redemptions and reinvestments cycling. Although new funds raised over 300 billion yuan in Q1, the total size of public funds slightly decreased from 37.64 trillion yuan at the end of last year to 37.52 trillion yuan. Equity fund sizes fell nearly 16% quarter-on-quarter, and ETF sizes shrank by over 1 trillion yuan. The head effect in new market offerings is evident, with many products facing fundraising difficulties—investor expectations have shifted.

Risk appetite is converging toward conservatism. After shifting from “value-added” to “capital preservation + stability,” savings-type insurance products that lock in long-term interest rates, have clear returns written into contracts, and include guarantees have become the ballast. They absorb deposits flowing out of the banking system, which are hesitant about wealth management and funds, forming a noticeable gathering effect. Hedging sentiment is spreading, and certainty has become the most scarce asset.

However, the prosperity on the liability side faces increasing matching challenges on the asset side.

The influx of long-term funds is a tough test for insurers’ asset-liability matching. Asset supply is tight, with fewer high-quality corporate bonds and high-yield non-standard assets available. Occasionally, long-term interest rates marginally improve, but as of April this year, the 30-year government bond yield center still hovers between 2.21% and 2.25%. Industry estimates show that the comprehensive liability costs of existing policies remain high. The game between investment returns and liability costs, with the interest spread loss as a sword hanging over insurers’ heads.

The emerging trend of residents’ funds shifting into the insurance system is just one aspect of the industry’s transformation. The normalization of dynamic reserve interest rate adjustments, pressure on asset-side yields, and the industry’s gradual departure from the past growth driven solely by interest rates are leading to a focus on refined asset-liability management, product structure optimization, and enhanced investment capabilities.

This capital shift caused by deposit migration not only tests the insurance industry’s capacity to absorb it but also reflects a long-term challenge for the entire financial system to rebalance risk, return, and liquidity in a low-interest-rate environment. As the tide of high growth recedes, the resilience of refined operations is the fundamental card for financial institutions to navigate cycles.

If you hold $BTC or $ETH, consider—when trillions of deposits chase “locked-in” certainty of interest rates, could these digital assets also, at some turning point, become another form of “certain store of value” in the eyes of some people?

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