According to the latest data disclosed by regulators, the speed of insurance capital inflow into a shares has not slowed down this year. As of the end of October, the balance of two investments in stocks and securities investment funds accounted for 13.2% of the total use of insurance assets, which was basically the same as that at the beginning of the year.
Although the proportion of investment did not change much, with the increase of the amount of insurance capital month by month, the absolute investment amount of insurance capital in stocks and securities investment funds increased significantly. By the end of October, the balance of insurance investment was 2746.9 billion yuan, an increase of 310.4 billion yuan over the beginning of the year. It can be predicted that with the continuous growth of premium income in the insurance industry, even if the proportion of insurance capital to equity investment remains unchanged, there will still be incremental insurance capital flowing into a shares.
Affected by the epidemic, the growth rate of insurance premium has slowed down this year. According to the data disclosed by the CIRC, the insurance industry realized the original premium income of 3960.8 billion yuan in the first 10 months of this year, up 6.68% year on year. In 2019, the growth rate of the original premium of the insurance industry will exceed 12%.
There is an inherent demand for insurance capital to increase equity investment. Cao Deyun, executive vice president and Secretary General of China Insurance Asset Management Association, pointed out that in recent years, the momentum of global economic growth has slowed down, the impact of this years epidemic situation has been superimposed, and the trend of low interest rates has become increasingly obvious. This is undoubtedly a huge and long-term challenge and pressure for the use of insurance funds with a longer term, fixed income asset allocation and more sensitive to interest rate risk u3002 On the premise of controllable risks, insurance assets should appropriately increase the proportion of equity assets allocation. On the basis of maintaining the overall scale stability, we should seize the structural opportunities of upward volatility in the A-share market, pay close attention to the long-term value of high dividend paying stocks, and continue to explore long-term investment opportunities of blue chips with large market value, good performance, high roe and undervalued, so as to bring about a relatively high level of insurance funds Good positive returns.
The CBRC has also continued to encourage insurance funds to enter the market as long-term funds. On July 17, the CIRC issued the notice on issues related to optimizing the supervision of equity asset allocation of insurance companies, breaking the upper limit of equity investment in insurance assets; on October 10, the CIRC issued the notice on issues related to the optimization of investment management capacity of insurance institutions, canceling the filing management of investment management capacity in stock and other fields; on November 13, the CIRC issued the noticeu300a The circular on matters related to financial equity investment of insurance funds clearly cancels the industry restrictions on financial equity investment of insurance funds. The introduction of a series of policies, are in the insurance investment a share loose.
From the perspective of insurance capitals attitude towards equity investment, many insurance companies recently said that they are optimistic about the value of medium and long-term investment in the capital market and will increase their investment in equity. The relevant person in charge of Asset Management Department of love life told Securities Daily that at the current point of time, the overall valuation of the equity market is at a high historical median level, and some sectors are still at an undervalued or reasonable valuation level after performance adjustment. We believe that the equity market at the end of the year still has investment value. Based on the above objective judgment on the market valuation and the companys premium income in the second half of the year, we will increase A-share allocation in the fourth quarter according to the market fluctuation, and maintain a reasonable level of equity asset allocation.
Banking stocks pick up
Improve the return on insurance investment
Bank stocks staged the end of the year meal market, is expected to further increase the return on insurance investment.
On November 27, ICBCs share price rose sharply and led to the overall rise of the banking sector. According to chioce data of Dongfang fortune, the overall growth of the banking sector in November reached 9%, significantly exceeding market expectations.
Since this year, due to the impact of the new accounting standards, insurance capital is still increasing the number of bank stocks with high red rate. According to the new standards, insurance companies will fully implement IFRS9 accounting standards next year (Ping An of China has taken the lead). Under the new standard, all equity financial assets will be measured at fair value, which will make the financial investment of insurance enterprises more flexible. In order to smooth the impact of investment income on the net profit of insurance enterprises, insurance enterprises will prefer large blue chip stocks represented by high dividend and low volatility state-owned bank stocks.
As a perennial heavy position of insurance assets, the fluctuation of banks stock price has an obvious impact on the return of insurance investment. However, in the first 10 months of this year, the overall performance of bank stocks was flat, which had a certain negative effect on the return on insurance stocks and securities investment. In November, the rise of bank stocks brought a touch of light to the trend of the whole year. If bank stocks can continue to rise in December, it is expected to significantly improve the overall investment income of insurance capital in 2020.
Source of this article: Ren Hui, editor in charge of Securities Daily_ NBJ9607