BIZCHINA / China Insurance
Interest rate hike affects insurance proceeds
(chinadaily.com.cn)
Updated: 2007-06-15 16:40
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The May consumer price index data trigger the market's strong expectation
of another interest rate hike. Although there is no specific timetable
for a rise in the interest rate, once it occurs, the demand for most
savings-type insurance products will drop.
"The current ceiling of expected proceeds from savings-type insurance
products limited by the insurance regulator is 2.5 percent, while the
current after-tax bank interest rate has reached 2.45 percent," said a
manager from Haier New York Life Insurance Co."Another interest rate hike
will make it higher than the expected proceeds limit of the products."
"Several insurance companies have therefore introduced investment-linked
insurance products, but most won't be able to develop similar products in
a short time. Their business will be challenged," he continued.
...
The full text is available in the China Insurance.
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