China’s state-owned life insurers are poised to inject over $14 billion (CNY100 billion) into the country’s equity markets, following a government directive requiring 30% of new premiums to be allocated to stocks. The move, set to take effect in 2025, is expected to significantly impact the nation’s financial landscape, according to a report by S&P Global Market Intelligence.
The government initiative aims to encourage major insurers to begin investing a substantial portion of newly collected premiums into yuan-denominated equities starting in 2025.
Based on new business premiums in 2023, China Life Insurance Co. Ltd. is projected to invest $8.85 billion (CNY63.24 billion), China Pacific Insurance (Group) Co. Ltd. $3.48 billion (CNY24.86 billion), The People’s Insurance Co. (Group) of China Ltd. $2.03 billion (CNY14.50 billion), and New China Life Insurance Co. Ltd. $1.72 billion (CNY12.27 billion). These companies maintain strong solvency ratios of 218.5%, 257.0%, 250.7%, and 278.4%, respectively.
Sun Ting, chief analyst for nonbank financials at Soochow Securities, suggests that if based on 2024 data, the total equity investment by five major state-owned insurers—China Life, China Pacific, New China Life, People’s Insurance, and China Taiping Insurance Group Ltd.—could reach an estimated $56.57 billion (CNY404.1 billion) by 2025.
This government directive has already contributed to a boost in market sentiment, pushing the CSI 300 index toward the 4,000 mark. The announcement came shortly after U.S. President Donald Trump’s comments about potential tariffs on Chinese goods, which initially caused a temporary drop in the index.
The market outlook could see further gains if private insurers, such as Ping An Insurance (Group) Co. of China Ltd., follow suit and increase their stock investments alongside their state-owned counterparts.
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