"Life insurance leader" China Life internal report: Continue to increase allocation to Chinese equity assets!
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In an environment where low interest rates coexist with long-term liabilities, insurance capital, as one of the most important medium- and long-term funds in the capital market, attracts close attention for its scale of utilization and changes in allocation structure.
China Life Asset Management Company, in its report, reviews the use of insurance funds in 2025, providing key information such as the growth in premium and investment balances, improvement in investment returns, and an increase in equity allocations. In its outlook for 2026, the report emphasizes the need to improve long-cycle assessment and value investing capabilities.
As the asset management arm of China's leading life insurer, China Life Asset Management positions itself as a long-term fund manager responding to both market entry and market stabilization tasks.
Zhitang has summarized the key points of this report for readers.
Insurance Fund Utilization Continues to Expand
Regarding sources of funds and scale of utilization, the report first reviews the growth of insurance premium income.
As of the end of October 2025, life insurance companies and property insurance companies had accumulated original insurance premium incomes of 3.8824 trillion yuan and 1.4908 trillion yuan respectively. Of these, life insurance accounted for 3.2748 trillion yuan, with year-on-year increases of 6.54%, 4.02%, and 12.01% respectively.
On this basis, the investment balance of insurance funds continues to grow. As of the end of the third quarter, insurance companies’ fund utilization balance stood at 32.1512 trillion yuan, a year-on-year increase of 16.52%.
Staged Improvement in Insurance Fund Investment Returns
At the level of investment returns, the report notes that since 2025, due to accounting adjustments by some insurance companies making comparable data unavailable, regulators no longer publish annualized investment return rates for insurance companies.
From the quarterly reports of listed companies, benefiting from improved equity markets during the year, the top five listed insurers generally saw different degrees of improvement in investment returns and investment yields in the first three quarters.
The report specifically points out that some insurers have a higher proportion of stocks classified as FVTPL (measured at fair value with changes included in profit or loss), thus benefiting more from stock market performance.
At the same time, the report also cautions that in the context of external risk release and increased market volatility, the industry still needs to closely monitor yield fluctuations, continue to lower liability costs, and strengthen asset-liability matching management.
Insurance Capital Increases Allocation to Equity Assets
Regarding asset allocation structure, the report clearly points out that insurance capital is steadily increasing its allocation to equity assets. As of the end of the third quarter of 2025, within the investment balances of life and property insurance companies, the proportions of bank deposits, bonds, stocks, securities investment funds, long-term equity investments, and others were 7.9%, 50.3%, 10.0%, 5.5%, 7.9%, and 18.4% respectively.
Over the year, the proportion changes for these asset classes were -1.1, +0.8, +2.5, +0.2, +0.2, and -2.7 percentage points respectively, showing a clear increase in equity holdings.
The report notes that financial regulators’ policies supporting insurance capital’s entry into the market have been effective, with many insurers increasing stakes in listed companies and increasing allocation to high dividend stocks, thereby improving the stability of investment returns.
The Role Positioning of Insurance Asset Management Industry in Capital Markets
In the outlook, the report makes a clear statement on the long-term positioning of the insurance asset management industry:
As a key long-term fund manager in the capital market, the insurance asset management industry needs to continuously improve its system and capability to support long-term and value investing.
The report emphasizes the need to strengthen and improve long-cycle assessment and incentive/discipline mechanisms, strictly enforce long-cycle assessment requirements for insurance funds and state-owned commercial insurance companies, and explore the introduction of diversified long-term value investment assessment indicators. At the same time, actively participate in pilot reforms of long-term insurance fund investment, promote the removal of practical obstacles to long-term capital entering the market, consolidate and strengthen its role as a market stabilizer, and strive to become a strategic reserve force.
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