According to the CITIC Construction Investment Research Report, it is recommended that Davis, which focuses on the insurance sector's performance growth and valuation repair, double click on investment opportunities. Currently, we believe that the valuation repair brought about by a steady recovery in interest rates is expected to be the main driver of the insurance sector market. Previously, in the context of the downward trend in long-term interest rates, since about 75%-80% of the overall allocation structure of insurance funds were fixed income assets, the market's expectations for future long-term investment returns of listed insurers were pessimistic, which also directly suppressed life insurance sector valuations. However, recently long-term interest rates have shown a steady upward trend. Currently, the 10-year treasury bond yield is above 1.8%, which is expected to drive the valuation repair of listed insurers. Furthermore, we believe that even with the more conservative long-term interest rate expectations of 1.5%-1.6%, there is still room for valuation repair for listed insurers. On this basis, listed insurers are also supported in terms of performance. Among them, life insurance is optimistic about a good start in 2026, and the growth rate of new orders exceeds expectations, and financial insurance is optimistic that “integrated reporting” of non-auto insurance will drive a relatively rapid growth in underwriting profits.

According to the CITIC Construction Investment Research Report, it is recommended that Davis, which focuses on the insurance sector's performance growth and valuation repair, double click on investment opportunities. Currently, we believe that the valuation repair brought about by a steady recovery in interest rates is expected to be the main driver of the insurance sector market. Previously, in the context of the downward trend in long-term interest rates, since about 75%-80% of the overall allocation structure of insurance funds were fixed income assets, the market's expectations for future long-term investment returns of listed insurers were pessimistic, which also directly suppressed life insurance sector valuations. However, recently long-term interest rates have shown a steady upward trend. Currently, the 10-year treasury bond yield is above 1.8%, which is expected to drive the valuation repair of listed insurers. Furthermore, we believe that even with the more conservative long-term interest rate expectations of 1.5%-1.6%, there is still room for valuation repair for listed insurers. On this basis, listed insurers are also supported in terms of performance. Among them, life insurance is optimistic about a good start in 2026, and the growth rate of new orders exceeds expectations, and financial insurance is optimistic that “integrated reporting” of non-auto insurance will drive a relatively rapid growth in underwriting profits.