21 Instances—Insurance Funds Hit Five-Year High in Stake Increases, Signaling a Departure from the 'Barbarian' Era

Since the beginning of 2025, insurance funds have once again become a focal point in the capital market with their aggressive stake increases in the secondary market. Statistics show that as of July 28, insurance institutions had completed 21 stake increases, not only exceeding the total for all of 2024 but also marking the highest figure in the past five years. The institutions involved include Ping An Life, China Post Insurance, New China Life Insurance, Rui Zhong Life, and China Life.

In contrast to the “barbarian-style” stake acquisitions of 2015, the current wave is not merely a result of capital agitation. Instead, it reflects a combination of declining interest rates, regulatory support, and asset-liability management needs. This trend also demonstrates insurance capital’s increasingly mature approach to long-term value investing. Bank stocks have emerged as the core focus of this round of acquisitions, with Ping An Life and its affiliated asset management firms accounting for seven stake increases.

Specifically, the Ping An group has increased its stake in China Merchants Bank H shares three times this year, raising its holdings from 5% to 15%, with an accumulated purchase of 461 million shares and an investment exceeding HKD 21.5 billion. Additionally, it has conducted two stake increases each in Agricultural Bank of China H shares and Postal Savings Bank of China H shares.

Using a “ladder-style accumulation” strategy, Ping An has positioned H-share bank stocks as core assets in its portfolio. As of the end of the first quarter, the market value of Ping An’s holdings in Hong Kong-listed bank shares accounted for more than 40% of its total Hong Kong equity portfolio.

According to a research report from China Merchants Securities, the frequent purchases of large state-owned banks’ H shares by insurance institutions are based on considerations such as dividend yield, tax advantages, market liquidity, regulatory requirements, and counter-cyclicality. This approach reflects rational decision-making by insurers under current market conditions and highlights the unique investment value of large state-owned banks.

Tian Lihui, Professor of Finance at Nankai University, explained to Jiemian News that the insurance sector’s increased stakes in banking stocks are also driven by financial reporting optimization and policy orientation. By increasing their holdings and appointing board members, insurers can use the equity method to account for investment returns, thereby shielding financial reports from volatility in the secondary market.

Some stake increases have gone beyond purely financial motives. After increasing its stake in Bank of Hangzhou, New China Life Insurance expressed an intention to deepen bancassurance cooperation through equity ties. Similarly, China Post Insurance’s acquisition of shares in Eastern Air Logistics aims to integrate logistics with insurance, creating strategic synergy under the model of “insurance capital + undervalued state-owned enterprises.”

Data show that as of the first quarter of 2025, equities and funds accounted for 13.3% of total domestic insurance capital allocations, reaching a historic high. A source familiar with insurance fund operations told Jiemian News that insurers are highly motivated to increase equity holdings. “Currently, returns on bonds and non-standard assets are declining rapidly, so insurers must rely on equities to offset interest margin losses. The relaxation of solvency supervision has allowed insurers to proactively raise their equity exposure.”

The source added that New China Life Insurance has shown the most aggressive pace of equity allocation. In 2024, its equity assets accounted for nearly 20%, and the proportion increased by another two percentage points in the first half of this year. China Taiping ranked second, with 13.9% of its assets in equities in 2024, and plans to increase this by five percentage points over the next three years. On the regulatory front, authorities are also encouraging insurance funds to make long-term equity investments.

On July 11, the Ministry of Finance issued the Notice on Guiding Insurance Funds Toward Long-Term and Stable Investment and Further Strengthening Long-Cycle Performance Evaluation of State-Owned Commercial Insurance Companies. This aims to enhance the stability and sustainability of long-term investment by insurance funds and promote the healthy development of capital markets. For the first time, the notice introduced five-year performance indicators, adjusting the evaluation framework for return on net assets and capital preservation/appreciation to include annual indicators, three-year indicators, and five-year indicators, with weights of 30%, 50%, and 20%, respectively.