Insurance capital A-share investment reached 2.08 trillion, industry insiders said Q4 will choose the opportunity to increase its position

 Insurance capital A-share investment reached 2.08 trillion, industry insiders said Q4 will choose the opportunity to increase its position

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The more insurance funds are bought, the more brave they are in the capital market.

Since the beginning of this year, the number of A-share and H-share listed companies has reached 20 times, a new record in recent years. However, in 2019, 2018 and 2017, the number of times of lifting cards was 8, 10 and 7 respectively.

By the end of June 2020, the total investment scale of insurance funds in A-share stocks was 2.08 trillion yuan, accounting for 4% of the circulating market value of a shares, and was one of the largest institutional investors in the stock market.

How to choose the right time to allocate A-share insurance capital in the fourth quarter

Since this year, China Life Group and life insurance company, China Pacific Insurance Group and life insurance company, Taikang Life Insurance and Pension Company, Ping An Life Insurance, Taiping Life Insurance, Huatai assets, CITIC Prudential Life Insurance and Centennial life have listed their stocks in succession.

On September 9, Shanghai Jiawen, the second largest shareholder of sunshine city, signed a share transfer agreement with Taikang Life Insurance and Taikang pension. Shanghai Jiawen plans to transfer 13.53% shares (554 million shares) of the listed company by means of agreement transfer, including 8.53% shares of Taikang Life Insurance and 5.00% shares of Taikang pension.

On September 21, China Life and life insurance company purchased H shares of ICBC through the secondary market of Hong Kong stock, and the increased holding was funded by insurance liability reserve. After the completion of the transaction, the company held about 4.359 billion H shares of ICBC, and the shareholding ratio increased from 4.9989% to 5.0219%.

On September 23, Ping An of China invested HK $300 million to increase its 10.8 million shares of HSBC Holdings, increasing its shareholding ratio to 8%, and once again became the largest shareholder of HSBC Holdings.

It is not difficult to find that financial real estate stocks are favored by insurance funds. In the downward cycle of interest rates, the attractiveness of finance, undervalued real estate stocks and high dividends to insurance and other long-term funds has been further enhanced. Since the end of 2019, insurance companies, social security funds, pension funds and other long-term funds have continued to enter or increase their holdings in financial and real estate stocks.

A person in charge of an insurance asset management said that on the whole, stocks of listed companies with low Pb, high roe, high dividend yield and high red yield have a higher possibility of raising the cards of the insured funds.

When it comes to the investment strategy of equity assets in the fourth quarter, some insurance asset managers believe that they will increase A-share allocation at an appropriate time according to the actual market situation and maintain a reasonable allocation level.

The notice on issues related to optimizing the supervision of equity asset allocation of insurance companies issued by the CIRC pointed out that the differentiated regulatory ratio of equity asset investment should be set. According to the indicators of solvency adequacy ratio, asset liability management capability and risk status of insurance companies, the regulatory proportion of eight equity assets is determined, which can account for 45% of the total assets at the end of last quarter.

During the period of big fluctuation, insurance assets remained in the state of net purchase

By the end of August 2020, the balance of fund utilization in the insurance industry totaled 20.52 trillion yuan, accounting for 91.88% of the total assets. Compared with the beginning of the year, the balance of capital utilization increased by 10.67%, including bank deposits of 2.68 trillion yuan, an increase of 6.31%; bonds of 7.33 trillion yuan, an increase of 14.53%; stocks and securities investment funds of 2.76 trillion yuan, an increase of 13.38%; other types of investment of 7.74 trillion yuan, an increase of 8.07% over the beginning of the year.

Insurance funds also increased returns through equity investment. In 2019, the original premium income of Chinas insurance industry will reach 4.26 trillion yuan, a year-on-year increase of 12.17%, nearly 9 percentage points higher than that of the same period in 2018.

Accordingly, by the end of 2019, the investment income of insurance funds has reached 882.413 billion yuan, with an annualized comprehensive investment return rate of about 6.85%, including 279.013 billion yuan from equity investment and 13.16% annualized return on investment, which has become an important channel for insurance funds to improve investment returns and help insurance institutions to better balance safety, profitability and liquidity.

A person in charge of an insurance asset management said that although the overall fluctuation of Chinas capital market is more significant, in the past decade or so, insurance funds have made overall good returns in the equity market through the methods of trend grasping, structural opportunities and transaction strategy adjustment, which has become an important strategy and method to deal with low interest rates.

Looking to the future, Yuan said that in the context of the growing scale of insurance assets, equity investment provides strong support for insurance institutions to expand products with long-term risk management and protection functions and to safeguard the legitimate rights and interests of insurance consumers. In the next step, we should take the opportunity of the reform of equity investment supervision, actively carry out various regulatory work, establish and improve the classified supervision mechanism for the use of funds of insurance companies, and guide insurance companies to carry out value investment, long-term investment, prudent investment and steady investment.