Lower New Business Costs Signal the End of Interest Margin Loss Risks for Leading Insurers

Leading listed insurers are moving toward the clearance of medium- to long-term interest margin loss risks. This shift follows a decline in average new business costs, which fell by 73 basis points year-over-year in 2025. The reduction stems from industry-wide reforms to insurance channels and a lowering of preset interest rates by regulators.

New business costs now sit below existing costs. While existing costs remain influenced by the expiration of older policies, continuous inflows of new business are expected to dilute these costs over time. This cost structure is supported by a net investment yield average of 3.37% for listed insurers, a figure that exceeds existing costs by 61 basis points. The combination of lower liability costs and stabilized investment yields is expected to largely clear the risk of interest margin losses for the sector's leading players.