Shanghai Sees Surge in Interest for Savings Insurance
As major state-owned banks in China continue to announce reductions in listed interest rates for RMB deposits, there has been a significant increase in customer interest in savings insurance products in Shanghai.
According to insurance agent Xiao Chen, there has been a surge in inquiries about savings insurance products, with a focus on asset appreciation. The product with the most inquiries is the whole life insurance, followed by products such as annuity insurance that provide stable cash flow.
The most recent reduction in deposit interest rates by major state-owned banks took place on December 22nd, with reductions of 10 to 25 basis points across various deposit maturities. This has marked the third comprehensive reduction in bank deposit interest rates this year, leading to an era of “1%+” deposit interest rates.
As a result, consumers are turning their attention to insurance products that offer stability and growth. The insurance market has witnessed a wave of product predetermined interest rate switching, with most insurance products being affected. Chen Jianhua, general manager of the actuarial department of Taiping Life Insurance, expressed confidence in the 3.0% predetermined interest rate product, stating that it still has relative advantages as a defensive asset.
To cater to the increasing customer demand for savings insurance, many insurance companies have launched new products, such as whole life insurance and annuity insurance. This trend is in line with the market shift towards long-term and stable wealth growth, as well as wealth inheritance and risk protection.
While there is a growing interest in products with dividends and products without dividends, the extended whole life insurance continues to have the highest “click-through rate”. Despite the need for long-term growth, insurance agents are optimistic about the demand for these products and believe they will continue to occupy a large share of the market.
Overall, as the end of the year and the beginning of the year is a traditional asset allocation period, both the demand and supply sides of insurance savings are expected to benefit from the decline in bank deposit interest rates. This could lead to an overall increase in demand for insurance savings products in the upcoming year.