When pricing insurance products in

When pricing insurance products in terms of liability, the company predicts the future return on investment and establishes an annual rate of return on the insurance policy. When the market interest rate falls, the predetermined interest rate is greater than or equal to the return on investment, so the interest rate drops and the solvency decreases. When the market interest rate rises, the predetermined interest rate is equal to or equal to the return on investment, and the insured can change some dividends and savings. The type of transfer of insurance products has brought greater instability to the operation of the insurance business. At the same time, interest rate risk will bring uncertainty to the company's future cash flows. In the case of corporate debt, the longer the maturity in the process of discounting cash flows, the smaller changes in market interest rates will have a significant change in present value, ultimately affecting the company's profitability and the stability of its insurance operations.