① According to the estimated return on A+H dividend assets, the net Inflow of insurance capital in the second quarter was about 200 billion yuan, and Stocks allocations were drastically increased for five consecutive quarters. ② Insurance capital increased overall dividends in the second quarter, reduced holdings of energy products, and internal adjustments in technological growth and high-end manufacturing, but overall technology was increased.
Since the beginning of the year, performance evaluation methods for state-owned insurance companies have continued to be optimized, the policy environment for insurance fund equity investment has gradually improved, and insurance capital has entered the fast track. However, compared to the beginning of 2024, dividend assets in line with insurance aesthetics have experienced a marked rise. At the same time, the market has emerged from the dilemma of insufficient incremental capital, and all types of assets have ushered in positive opportunities for valuation restoration. Faced with this market environment, insurance capital also showed different characteristics from the past in the process of allocating equity assets. We will analyze the investment characteristics of insurance capital this year from five data dimensions.
1. Balance of funds used by insurance: The Inflow of insurance capital is accelerating, and outsourcing is shifting to direct investment
Insurance capital entered the fast track, and insurance further increased its Stocks allocation by 200 billion yuan in the second quarter. The proportion of Stocks held in the balance of insurance funds increased by 0.4 pct to 8.8% over Q1. According to A+H dividend Assets yield estimates, the net Inflow of insurance capital in the second quarter was about 200 billion yuan, and Stocks allocations increased sharply for five consecutive quarters.
According to an estimate of 30% of the additional premium income, insurance capital is still expected to increase the allocation of A+H Stocks by 3,000 to 400 billion yuan in the second half of the year. At the beginning of the year, six ministries and commissions jointly issued a plan to vigorously promote medium- and long-term capital entry into the market. It was proposed that “large state-owned insurance companies should play the role of 'head gooses' and strive to use 30% of the additional premiums for investment in the stock market every year.” It can be seen that on this basis, the correlation between the estimated net Inflow of insurance capital into stocks and new premium income has increased markedly since this year. According to the 5% year-on-year increase in new premiums in the second half of the year, it is expected that 25H2 insurance will still increase the allocation of A+H Stocks by 3,000 to 400 billion yuan.
The way insurance funds participate in equity assets is also gradually shifting from outsourcing to direct investment. Before 2024Q3, the size of stocks and funds held by insurance showed a convergent growth trend, but since 2024Q4, the size of Stocks held by insurance has increased steadily, while the size of funds held has shown a downward trend. This is reflected in Assets allocation, where insurance capital participation in equity allocation is gradually shifting from using external managers to direct investment.
2. Shareholders with heavy insurance holdings: dividend background thinking, Assets class expansion
Insurance capital increased overall dividends in the second quarter, reduced holdings of energy products, and internal adjustments in technological growth and high-end manufacturing, but overall technology was increased. From the perspective of industry and individual stocks, additional Bank (Bank of Hangzhou, China CITIC Bank, Bank of Suzhou), communications (China Telecom, ZTE, China Mobile), media (Zhongnan Media, Phoenix Media, Shandong Publishing), reduced holdings of coal (Huaihe Energy, Jizhong Energy, Pingmei Co., Ltd.), electronics (Dongshan Precision, Changdian Technology), and military (aerospace electronics, aviation development control).
The allocation idea of direct insurance capital investment is still underpinned by high dividends. At the same time, in the face of the continued rise in traditional dividend assets such as Bank and utilities, the allocation gradually expands to broader dividend assets such as communications, food and beverage, Cars, media, non-ferrous materials, and architectural decoration. In the second quarter of this year, there were only 3 Bank among the top 20 companies that increased their insurance holdings. However, the increase in individual shares also had high dividend attributes. The average dividend rate of the top 20 shares increased by 3.80%, the average dividend rate of the top 50 shares was 3.15%, and the average dividend rate of the top 50 shares was increased by 3.15%, and gradually decreased according to insurance capital increase to holdings reduction. It is worth noting that among the top 20 stocks reduced, there are many cyclical resource Industry such as petroleum, petrochemical, and coal. Considering the sustainability of their dividends, if they are removed, the dividend rate of the top 20 shares reduced is significantly lower.
3. Major Shareholder of insurance and Hong Kong stock listed companies: they prefer Hong Kong stock assets and are the core driver of the rise in Hong Kong stock dividend assets
Since the beginning of this year, listed insurance companies have been further accelerated compared to last year, and the share of listed Hong Kong stocks has increased dramatically. As of August 31, insurance companies have been listed 28 times this year, which has surpassed the number of listings for the whole of last year. Among them, Hong Kong stocks were listed 23 times, accounting for a marked increase compared to previous years. In an environment where the center of Bonds yields has declined and traditional dividend assets have clearly risen, insurance capital allocates dividend assets with higher dividend ratios and higher cost performance in Hong Kong stocks southward. Insurance capital is an important component of the continued sharp Inflow of southbound capital this year.
In addition to the fact that Inflow were suspended in April due to the impact of equal tariffs, insurance capital was increased to Hong Kong stocks throughout the first eight months of this year, and formed the core driver of the rise in Hong Kong stock dividend assets. According to the majority Shareholder holdings data disclosed by the Hong Kong Stock Exchange, insurance capital was rapidly allocated to Hong Kong stock Bank in the first quarter. However, as the national team stabilized the market and boosted market confidence, insurance capital once again entered the channel to increase dividend assets for Hong Kong stocks after May, and in early August, Ping An listed China Life Insurance and China Taibao. Furthermore, looking at the share ratio of Hong Kong stock listed companies held by insurance capital and the company's stock price performance, the southward movement of insurance capital is the core driver of the rise in Hong Kong stock dividend assets.
4. ETF holders: 25H1 insurance capital is slowing down through ETF allocation of broad-based indices, and more use index investment tools to participate in growth sector investments
At 24H1, the share of ETFs held by insurance capital peaked. Combined with the differentiation between stocks and funds using the balance of insurance funds, it was further confirmed that since 24H2, insurance capital has moved from using external managers and index investment tools to direct investment. As the top ten holders, 25H1 insurance capital held an ETF of 214.9 billion yuan, an increase of 3.3 billion yuan over 24H2, and growth in total ETF allocation slowed down.
Although insurance capital has slowed in the total allocation of ETFs, internal restructuring has been significant, adding the China Securities A500 and ETFs in industries such as TMT, manufacturing, and brokerage, while reducing the allocation of the Csi 300 Index and dividend-themed ETFs. In the first half of this year, the share of insurance capital allocated to the China Securities A500 ETF increased markedly, but it is necessary to look at it in combination with two aspects: First, considering that a large number of A500 ETFs issued after November last year did not have annual report data, the allocation of insurance capital on the China Securities A500 ETF may have only increased slightly, but for the China Securities A500, which has continued to decline in scale since the beginning of the year, the insurance capital holding ratio has increased to a certain extent. Second, 25H1 insurance has drastically reduced its holdings on the Csi 300 Index. It is not ruled out that the insurance capital will replace the Csi 300 Index with the China Securities A500 in the broad base index ETF allocation. Compared with the constituent stocks of the China Securities A500 Index and the constituent stocks of the Csi 300 Index Index, the China Securities A500 has a higher proportion in defense and military, CSI SWS Health Care index, power equipment, Computer, and electronics. In contrast, the proportion in non-bank finance, banking, CSI SWS Food & Beverage index has decreased significantly, or reflects that when investing in growth Industry, insurance capital begins to seek growth assets through passive or foreign investment Department Participate in a managerial manner.
At the same time, 25H1 significantly increased the allocation of industry-themed ETFs such as TMT, manufacturing, financial real estate, etc., accounting for about one-third of the net Inflow of industry-themed ETFs in the first half of this year. Insurance capital may use industry-themed ETFs as a tool to carry out swing trading operations. The total net Inflow of industry-themed ETFs in the first half of this year was 60.9 billion yuan. According to statistics on heavily insured ETFs, insurance capital increased industry ETF holdings by a total of 23.5 billion yuan in the first half of the year, which is an important contribution to the increase in Industry ETF in the first half of the year. Looking at industry-themed ETF categories, net Inflow from TMT, manufacturing, financial real estate, and cyclical ETFs increased by 12.9 billion yuan, 11.2 billion yuan, 5.7 billion yuan, and 3.6 billion yuan respectively, to +139%, +148%, +68%, and +155%, respectively. Take the Science and Technology Innovation Chip ETF as an example. The top ten holders of 24H2 insurance capital held 1.04 billion yuan, while 7 of the top ten 25H1 holders had insurance capital, and the holding scale rapidly grew to 4.83 billion yuan.
5. Listed insurers: Leading insurers are allocating more Stocks more quickly, and the share of FVOCI Stocks has increased significantly
Listed insurers are allocating stock assets faster. In the first half of this year, the market Market Cap of Stocks held by the five A-share listed insurance companies (China Life Insurance, Ping An, People's Insurance, Taibao, and Xinhua) increased by 411.9 billion yuan compared to the end of last year, +28.7% over the previous month, and the growth rate further increased.
Leading listed insurers increased their Stocks more quickly, showing the characteristics of accelerated allocation. At 25H1, the five A-share listed insurers allocated 9.4% of their share assets, an increase of 1.6 pct over the previous month. Compared with the industry's overall upward slope, the allocation ratio of insurers in equity assets is still highly differentiated, and insurers with lower allocations still have a lot of room for improvement.
Listed insurers' share of FVOCI Stocks has increased significantly, and it is expected that the allocation of dividend assets that can be credited to OCI Account will continue to be the main focus in the future. 25H1, five A-share listed insurers holding FVOCI Stocks increased by 284.3 billion yuan (+62.2%) month-on-month, and FVTPL Stocks increased 127.6 billion yuan (+13.1%) month-on-month (+13.1%). Considering the resonance of multiple factors such as debt-side allocation requirements, declining long-term interest rates, and regulatory policies encouraging long-term capital entry into the market, the entry of insurance capital into the market is still a major long-term trend. On this basis, it is expected that OCI Account will have a clear advantage in reducing the impact of stock price fluctuations on insurers' profits and capital occupation. The allocation of dividend assets to OCI Account is the main one.
Risk Alerts
Model calculation errors, lower-than-expected policies, equity market fluctuations, and a rapid rise in interest rates
