Life insurance funds generally have the characteristics of long insurance period and high security, so in my country, this part of funds is more suitable for investment in long-term savings, government bonds, real estate, etc. The term of property insurance funds is relatively short, and the liquidity requirements are relatively strong. They are more suitable for investment products with strong liquidity and high returns, such as interbank lending and stock investment. At present, due to the lack of medium- and long-term investment projects with stable returns in my country, regardless of the source of funds and the length of the term, they are basically used for short-term investment. This makes the asset and liability term structure of insurance companies mismatched, seriously affecting the virtuous cycle of insurance funds and the solvency of insurance companies.
Fourth, insurance company funds are affected by bank interest rates and there is a large systemic risk.
interest rate changes have a great impact on insurance investment returns. In particular, in recent years, the People's Bank of China has lowered bank deposit rates for 8 consecutive times, making the capital cost of insurance companies higher than the deposit rate. At bosnia and herzegovina businesses directory present, the 5-year deposit rate is only 2.88%, while the average cost of insurance funds is as high as 6.5%. A large amount of insurance funds are deposited in banks, resulting in a large interest rate spread loss. This makes my country's insurance industry, especially the life insurance industry, face greater interest rate risks.