The research value of the personal insurance reservation interest rate increased by 4 basis points month-on-month to 1.93%, and industry insiders predict that the probability of triggering another cut within the year is relatively low.

Blue Whale News, April 27 — (Reporter Chen Xiaojuan)
It has been learned that recently, the China Insurance Industry Association convened the first quarter 2026 expert consultation meeting on interest rate research for the personal insurance industry.
Insurance experts studied the projected interest rate values for personal insurance products and proposed that the current projected interest rate for ordinary personal insurance products is 1.93%, up 4 basis points from the previous quarter’s research value of 1.89%.
It is noteworthy that this is also the first rebound since the mechanism was implemented in 2025.

Overall, industry experts believe that for a long time, the industry has been trapped in a one-sided mindset that “interest rates must continuously decline,” and the first increase proves to the market that the pricing interest rate is bidirectional and fluctuates.
This helps to temper irrational fears of extreme interest rate spread losses from sales and management, and stabilizes confidence in existing business.
Considering current interest rate trends, in the short term, the market is relatively stable and unlikely to trigger a further decrease in the projected interest rate for insurance products.

Projected interest rate research value first rebounds

The projected interest rate research value is a core reference indicator guiding life insurance companies to dynamically adjust the projected interest rates of insurance products.
In recent years, faced with persistently declining interest rates, the insurance industry has continuously optimized liability costs to reduce interest spread risks.

In early 2025, the Financial Regulatory Authority issued new regulations establishing a dynamic adjustment mechanism linking projected interest rates with market interest rates.
The Insurance Industry Association, based on changes in market interest rates such as the 5-year LPR, 5-year fixed deposit benchmark rate, and 10-year government bond yield, publishes the projected interest rate research value quarterly.
When the maximum projected interest rate for regular insurance products sold by insurance companies exceeds the projected interest rate research value by 25 basis points for two consecutive quarters, they should promptly lower the maximum projected interest rate for new products.

As of now, the projected interest rate research values published by the Insurance Industry Association are 2.34%, 2.13%, 1.99%, 1.90%, 1.89%, and 1.93%, decreasing for four consecutive quarters at one point.
In the third quarter of 2025, the industry triggered the projected interest rate adjustment mechanism, and institutions generally adjusted the maximum projected interest rate for traditional insurance, guaranteed dividend insurance, and universal insurance to 2.0%, 1.75%, and 1.0%, respectively.

“The projected interest rate research value is anchored to three major market interest rate benchmarks. Since the second half of last year, market interest rates have been relatively stable. Since 2026, the 10-year government bond yield has fluctuated narrowly between 1.78% and 1.90%, so the projected interest rate research value has slightly increased compared to the previous quarter,” said Zhou Jin, Partner at Tianzhi International Financial Industry Consulting.

Dr. Zhu Junsheng, Postdoctoral Fellow in Applied Economics at Peking University and Professor, analyzed to Blue Whale News that this rebound is beneficial for boosting confidence on the liability side and easing industry anxiety over “interest rate cut expectations.”
For a long time, the industry has been trapped in a one-sided mindset that “interest rates must continuously decline.”
The first rebound proves to the market that the pricing interest rate is bidirectional and fluctuates, helping to temper irrational fears of extreme interest rate spread losses from sales and management, and stabilizes confidence in existing business.
It also promotes the industry’s transition toward a “dynamic pricing mechanism.”
This change demonstrates the sensitivity of the research value to market linkage and may encourage more insurers to abandon static pricing strategies, develop more flexible products, and adapt to the new normal of interest rate fluctuations.

Low probability of further short-term decreases

Overall, industry consensus suggests that the projected interest rate for personal insurance products will not see a new round of decreases within the year, and product policies and operational rhythms will stabilize.

Guotai Haitong Non-Banking Team pointed out that since 2026, the yield on 10-year government bonds has generally ranged from 1.76% to 1.90%, and “if market interest rate fluctuations remain relatively stable, it is unlikely that the projected interest rate will be lowered again in the short term.”

Zhongtai Non-Banking Financial Team estimates that if the yield curve of government bonds, the 5-year fixed deposit rate, and the 5-year LPR remain at current levels, the projected interest rate research value at the end of 2026 could be around 1.89%.
In the medium term, the possibility of adjusting the upper limit of new product projected interest rates is not high.
“However, it also depends on regulatory considerations, combined with future stock and bond market fluctuations and the insurance capital’s own operational conditions,” they added.

Dr. Zhu Junsheng also believes that a further decrease in the short term is unlikely.
First, the initial effects of interest spread risk isolation are evident; the industry has significantly reduced fee spread losses through “reporting and operating as one,” and has built a “buffer” by lowering dividend insurance interest rates.
The current level of projected interest rates already has a considerable safety margin, reducing the need for frequent adjustments to transfer risk.
Second, there is a need for policy stability.
Insurance products have long-term attributes.
Frequent adjustments to pricing benchmarks may trigger sales disruptions but also pose challenges to product development and sales management.

“Based on this projected interest rate research value and our outlook on the economy and markets this year, the insurance industry is unlikely to face the frequent product switches and sales rhythm disruptions experienced last year, which will help insurers more calmly advance their annual budget plans and improve operational stability,” Zhou Jin analyzed.
Additionally, the relative stability of products is also beneficial for insurers to seize opportunities as banks shift reserves, attracting more consumers to allocate insurance products.

However, he cautioned that given the ongoing long-term downward trend in interest rates, the industry should remain attentive to external factors such as macroeconomic conditions, geopolitical risks, and capital markets, and actively assess their impact on market interest rates, existing business, and product projected interest rates.
(Blue Whale News, Chen Xiaojuan, chenxiaojuan@lanjinger.com)

(Editors: Liu Sijia)

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