The insurance sector surges! Risk factors are lowered again, strengthening "patient capital" and further expanding the space for insurance funds to enter the market.

The insurance sector surges! Risk factors are lowered again, strengthening "patient capital" and further expanding the space for insurance funds to enter the market.

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On Friday, the National Financial Regulatory Administration issued a notice to further lower risk factors for certain insurance company operations, thereby improving the capital efficiency of insurance funds allocated to equity assets. This is the second optimization of solvency regulation standards by regulators within three months, following the initial reduction this September, continually expanding space for insurance funds to enter the market.

This adjustment covers three main areas: the risk factor for long-term holdings of CSI 300 Index components and CSI Dividend Low Volatility 100 Index components is lowered from 0.3 to 0.27; the risk factor for STAR Market common stocks is reduced from 0.4 to 0.36; risk factors for export credit insurance premiums and reserves are also simultaneously lowered.

 

Regarding the impact on serving the real economy, a relevant official from the National Financial Regulatory Administration said when answering reporters’ questions: First, the "Notice" targets risk factors for insurance company investments in CSI 300 Index components, CSI Dividend Low Volatility 100 Index components, and STAR Market stocks, and differentiates them according to holding periods, aiming to cultivate patient capital and support technological innovation. Second, the "Notice" adjusts the premium and reserve risk factors for insurance company export credit insurance operations and the overseas investment insurance operations of China Export Credit Insurance Corporation, guiding insurance companies to increase support for foreign trade enterprises and effectively serve national strategies.

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