CNBC:

How do you view the impact of market interest rate fluctuations on the insurance industry? Thank you.

Yin Jiang'ao:

Thank you for your question. Interest rate management is crucial for insurance companies, especially life insurance companies, as it directly affects the industry's stability and high-quality development. Currently, China's insurance industry is undergoing a period of transformation and upgrading, which inevitably brings difficulties and challenges. The NFRA places great emphasis on the high-quality development of the insurance industry by following a coordinated approach and addressing both symptoms and root causes. We have taken multiple measures to push forward the insurance industry, especially the life insurance industry, to strengthen its management of profit sources and improve the quality of liabilities. To enhance interest rate margin management, we're guiding the industry to lower assumed life insurance product pricing rates at a proper time and establish a dynamic adjustment mechanism linking these rates to market interest rates. We're expediting the transfer of asset-side yields to liability fund cost rates, improving asset-liability matching. This reinforces how investment returns constrain settlement rates and dividend levels, ensuring realistic and reasonable customer benefits. Additionally, we are urging insurance companies to adjust product structures, optimize the illustration of policy interest rates, and reasonably guide market expectations.

In terms of cost and expense management, we have deepened the alignment of reported expenses with actual practices. This approach enhances life insurance products' precision and scientific management across various channels, improving operational efficiency. Additionally, we have guided the China Association of Actuaries in compiling the fourth set of experience mortality tables for the life insurance industry, providing a solid foundation for accurate and scientific pricing by insurance companies.

Looking ahead, we will continue to drive the insurance industry to transform its development approach, deepen supply-side reforms, and enhance efficiency while reducing costs, thereby promoting high-quality development in the sector. At the same time, we will follow development principles, strengthen the linkage between assets and liabilities, solidify the foundation for growth, and foster a favorable environment. This approach will ensure effective public insurance coverage while enhancing service quality and efficiency for the real economy, ultimately improving social welfare. Thank you.