Continue watching insurance Giants not pilot variable annuity

Capital market fluctuations, at any time to change the market expected. The fourth week of May, Shanghai and Shenzhen stock markets tumbling encounter them both more than 5% stock index decline a week, period of adjustment low. Huzhi to 3,000 points on better expectations completely vanish. "What is the market bottom? "Investors bottom-line interrogation again. At any time with this "changing faces" market related insurance product, does not give insurance consumers with enough confidence. Now, silence investment and even insurance is still not subject to market has long been sought after; just officially release the variable annuity insurance, wait-and-see mood in the market strong. Recommended reading insurance weekly: April premium as scheduled diving silver insurance effect or Super expected insurance funded participation protection room looked was batch insurance funded contrarian buy wrong killed "white horse unit" new shares frequently break insurance funded playing new encounter floating losses car sales decline drag casualty profit tailored buy insurance figure out terms then Xia Dan Qiming: shocks city in the how mining Daniel unit insurance giants "interest not" under guotai Junan recently in China life of research, for recently release of variable amount annuity insurance pilot, Chinese life temporarily does not submitted pilot of application, causes is "interest not". "Nearly three years carrying out investment and even life insurance business, but relatively minimal, although a variable annuity pilot qualified, but developing variable annuity in the near future is unlikely. "Guotai Junan securities, reports said. Early in 2007, new investment and even insurance actuarial rules amendments, China allowed to launch the first under the new rules of investment and continuous selection of insurance value of an investment account. But according to the China life insurance's product strategy, adhere to the traditional participating businesses, "appropriate" development investment and continuous insurance and universal life insurance, investment and even insurance business control within a certain proportion and scale. Judging from the overall premium constitutes, China life insurance for investment business is not enthusiastic. Apart from China life, the other two listed insurance companies for the pilot's passion, also not promising. "Ping (601,318, unit) of investment and even the earlier insurance business, pilot qualification to meet variable annuity, but its investment and even the insurance business in reducing year by year 2010 investment and continuous insurance business accounted for less than 3%, investment and even the basic insurance new business to a standstill in recent two years. "Guotai Junan securities analyst Peng Yulong is considered. From CITIC Securities (600,030, unit) statistical data showed that from ping an of China on October 23, 1999 on the Mainland of China's first vote since even insurance, more than 10 years, the line has been very low total, as of 2009 and 2010, domestic investment and even insurance premium income $ 14.8 billion and $ 15.3 billion, respectively, only as per cent of total life insurance premiums and 1.82%. Again in 2007 to launch a new version of the investment and continuous risk ping an life insurance 2008 banks and insurance premium growth was once reached 77%, the total rose to 77.5%, silver high growth and business investment and even insurance, universal life insurance selling related, investment and even insurance rates most of them quickly. Today, capital market fell sharply and remained in the doldrums since 2008, many life insurance companies, including ping an life insurance, investment and even insurance business has been substantially shrinking. Turbo in China (601,601, unit), although the earliest ever development investment and even dangerous product, but have not been sold, even in 2007 investment and even dangerous "recovery" when was not involved in this field, does not meet the "vote for continuous risk management for three years" pilot of conditions, which are found not to participate in variable annuity pilot. "Three listed insurance companies of developing variable annuity in the near future is unlikely. "Guotai Junan gives the research conclusions. Indeed, the 2011 official implementation of new accounting standards, reducing the investment business on the premium level of contribution, which to a large extent a "command" inherent in the life insurance giant product strategy, this is the life insurance giant cautious variable annuity insurance at one of the underlying causes. "Guaranteed minimum income" pricing difficult but it is undeniable, and variable annuity insurance market attracted the biggest selling point, lies in the "guaranteed minimum income" may exist on the basis of high income. However, volatility of capital markets and the market has good reason to believe that: insurance giant to the pilot "yawn yawned his disapproval of" the reason is that there may be a higher income, with a high degree of uncertainty. In the context of China's economy in 2010 GDP to maintain high growth rates, still huzhi the year fell by 14. 31%. As early as at the beginning of this year, Renmin University of China finance and Securities Research Institute Director Wu Xiaoqiu said publicly that this trend is likely in 2011 to continue in 2011, China will likely be a year of sharp fluctuations in capital markets, and the fluctuation frequency higher than in previous years, mainly due to market highly full circulation, transaction volume, wish strongly reducing. "When in the capital market performance, attractiveness of variable annuity be substantially enhanced, but the characteristics of Chinese capital market fluctuations, may pose a significant risk to insurance companies, investment and even risk, variable annuity with minimum guaranteed interest is even more so. "Peng Yulong view, relative to other annuity products, main characteristics of variable annuity is higher risk higher return can be used, but the current capital market, and cannot bring this attraction. On one hand, variable annuity insurance there may be a high income, greater uncertainty; on the other hand, variable annuity insurance has determined the amount of "guaranteed minimum income", which the policyholder can follow "account expire value and the minimum payment greater of" into the future to receive annuity each year, just to the insurance company the more difficult pricing challenges. "Under the domestic investment environment, lack of can match the minimum guaranteed interest liabilities assets. "CITIC United Kingdom prospective Actuaries Pan Hongwen said currently does not yet allow insurance funds to participate in stock index futures trading or investment to match the minimum guaranteed interest option does not exist, in the event of systemic risk, insurance proceeds funding it is difficult to satisfy variable annuity guaranteed minimum requirement of insurance, higher risks of the enterprise. He argues that according to overseas experience and lessons learned, in the variable annuity insurance product design, can be no guaranteed interest too radical, and needs a relatively transparent, monitoring of insurance companies risk hedging mechanism to hedge risk. But a number of "risk appetite" insurance consumer reporter saying, even if variable annuity insurance have "guaranteed minimum income", if an end to their return still can't beat inflation, the so-called "of guaranteed minimum income", there is not much to attractForce. "Provide a guaranteed minimum income is not a free lunch, guarantee the interests of the insurance companies need to charge the appropriate fees. "Pan Hongwen says, a new product is just emerging, due to the lack of historical data, actuarial pricing is likely to follow a more conservative guaranteed when interest costs, so as to lower investment income, and from the perspective of the current investment environment, the lack of assets available to match the minimum guaranteed interest, low-risk assets of insurance companies tend to invest more, thus reducing the return on investment. CITIC Securities considered domestic and no corresponding assets to match interests of variable annuity guarantees, how reasonable prices guarantee the interest and fees charged corresponding guaranteed benefits, variable annuity insurance is an insurance company on the pilot's greatest challenges. Infer, this foreign variable annuity insurance marketing mainstream products, short-term developments in domestic space "may be limited." Proposing the "tax" over the years, the domestic tax preferential policy of annuity insurance calls for very high, there was no substantial progress. Lack of tax policy, is also a market in the short term are not optimistic about variable annuity insurance and important factor in the market space. "There is no preferential tax policies for variable annuity insurance, attraction is not obvious, difficult to expand in the short term. "Pan Hongwen believes that annuity products in most countries abroad, enjoy a degree of preferential taxation, this is an important driver of purchase annuity insurance. According to the international market experience, and variable annuity insurance originally as the United States part of the University teachers ' pension plan, enjoy special tax preferential policy, because at the same time meet the needs of pension, investment, guaranteed minimum three, in Europe and the rapid development of the market. Although 2008 was greater impact since the financial crisis, but continued to be of foreign insurance markets in the mainstream products. "But at present, all insurance products, including annuities product, has not enjoyed any tax concessions, so while annuity product's market potential is huge, currently business still small, short-term development space is very low. "Panhongwenru I think. Of course, despite the pilot time to be debated, and variable annuity insurance released, still be a major breakthrough in insurance product innovation. According to the China insurance regulatory Commission of the responsible persons of relevant departments explained that the launching of the pilot, mainly in view of the present pattern of life insurance products is too dependent on a single product line, business structure there is a risk. Since its 2008 capital markets suffer a hit, investment property investment and even insurance, universal life insurance than relatively weak share insurance, become the main varieties of the major life insurance company of push, the result created a bonus insurance today "a dangerous dominance" situation. CSI data show that by the end of 2009 and the end of 2010, bonus insurance premium income to $ 529.3 billion and $ respectively, occupy a total life insurance premiums and 65%, respectively. Of course, for the pilot, regulators also have a "cautious" attitude, pilot qualification, sales and total sales of the company are taking stringent restrictions. In risk management, not only standardized the management model, made of reserve at the same time strict liability standard. CITIC Securities believes that reserves making strict liability approach, is likely to reduce the participation of insurance companies. "In the large companies involved in the initiative may not be high, companies who wish to participate in the pilot, may be mostly small joint-venture company, especially investment and even risk a large proportion of small and medium-sized insurance companies, in particular, its parent company have experience in variable annuity foreign life insurance companies, variable annuity business are likely to become the focus of its development. "Panhongwenru is called. Editor's Note: product innovation to promote the domestic life insurance market, play a long-term life insurance savings features, rich insurance old-age pension products, on May 10 on variable annuity, insurance regulatory Commission published a notice of insurance and of the interim measures for the management of variable annuity insurance, or become another engine to stimulate the annuity market development in China. However, new product opportunities while also inevitably carries some risk. Development of variable annuity must be dependent on diversification of investment tools and the further relaxation of the Insurance Act on the utilization of insurance funds. Stable running, good capital markets are variable annuity development booster, and the volatility of the capital market in recent years is not really conducive to the development of the variable annuity. Therefore, the future of variable annuity way how to shop, how to go, there are a number of issues requiring discussion. To this end, the insurance weekly special report for the current period variable annuity insurance topics, trying to analysis problems from multiple perspectives, pulse of trends, so stay tuned.