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Crediting Interest Rate Philosophy

Universal life insurance plans are designed to be held long term. Through the crediting interest rate declaration, the policyholders participate in the financial performance of the universal life insurance plans. We aim to ensure a fair sharing of profits between policy owners and shareholders, and among different groups of policy owners.


We will review and determine the crediting interest rate at least once per year, and a smoothing process is applied when the actual crediting interest rate is determined. The crediting interest rate declared may be higher or lower than those illustrated in any product information provided. The universal life insurance plans also have other non-guaranteed interest / bonus and policy charges which are subject to review regularly and may adjust if necessary. The crediting interest rate, other non-guaranteed interest / bonus and change in policy charges would be approved by the Chairman of the Board, one Independent Non-Executive Director and the Appointed Actuary. In case of any change in the actual crediting interest rate, other non-guaranteed interest / bonus and /or charge against the illustration or should there be a change in the projected future crediting interest rate, other non-guaranteed interest / bonus and /or charge, such changes will be reflected in the policy annual statement.


To determine the crediting interest rate as well as other non-guaranteed interest / bonus and policy charges, we may consider the past experience and future outlook of various factors such as:

  • Investment returns: include both interest income and changes in market value of the asset supporting the policies. The investment returns could also be subject to market risks such as change in interest rate, credit quality and default, equity price movement, as well as currency price of the backing asset against your policy currency etc.
  • Claims: include the cost of providing death benefit and other insured benefits under the policies.
  • Surrenders: include policy surrender and withdrawal; and the corresponding impact on investment.
  • Expenses: include both direct expenses which are directly related to the policies, such as commission, underwriting, issuance and premium collection expense etc., as well as indirect expenses such as general overhead costs allocated to the policies.


Investment Philosophy, Policy and Strategy

The investment policy of the Company is formulated with the objective to achieve targeted long-term investment results, taking into account risk control and diversification, liquidity and relationship between assets / liabilities.


Our current long-term target asset mix attributed to the product group is as follows:


Flexi Savings and Custom Whole Life

Gold Wealth Insurance Plan


Other participating insurance plans and universal life insurance plans

Asset Class

Target Asset Mix (%)

Bonds and other fixed income instruments

75% - 85%

40% - 60%

90% - 100%

Equity-like assets

15% - 25%

40% - 60%

0% - 10%


The bonds and other fixed income instruments predominantly include government and corporate bonds (both investment grade and non-investment grade). Equity like assets may include both listed equity, mutual fund and private equity. Investment assets are predominantly denominated in U.S. dollars and Hong Kong dollars, and are mainly invested in United States and Asia. Derivatives may be used to manage our investment risk exposures.


We will pool the investment from other products together for actual investment and the return will be allocated with reference to the target asset mix. Actual investments would depend on market opportunities at the time of purchase. Therefore, they may differ from the target asset mix.


The investment strategy may be subject to change depending on the market conditions and economic outlook. In case there are any material changes in the investment strategy, we will inform our policyholders for the changes, reasons for the change and the impact to the policyholders. 

For the historical crediting interest rates for the universal life insurance plans of the Company, please click here.