Development of Insurance Asset Management and Response Strategies in a Low Interest Rate Environment

Abstract: The low interest rate environment is a long-term challenge for insurance asset management institutions, requiring strategic responses on both the liability and asset sides. On the liability side, strategies include lowering assumed interest rates, optimizing life insurance product structures, and strengthening cost management. On the asset side, strategies focus on extending bond durations, adjusting credit ratings, increasing alternative investments, expanding global asset allocations, boosting equity investments, and leveraging cyclical and structural opportunities. Each strategy has its benefits but also faces limitations. To effectively respond, insurance asset management institutions must enhance coordination with the liability side to control costs and strengthen investment capabilities. Regulatory support is also essential, including encouraging better asset-liability matching, fostering professional development, supporting overseas investments, improving firewall mechanisms between buy-side and sell-side operations, and promoting alternative investments.