缓解偿付能力风险因素，引导保险资金进行长期持股

Easing solvency risk factors to steer insurance stockholdingsOUTPERFORM(Maintain) The NFRA eased the solvency risk factors for insurance companies’ stockholdingsin the CSI 300 index (from 0.3 to 0.27), the CSI Dividend Low Volatility 100 index(from 0.3 to 0.27) and theSTAR Market(from 0.4 to 0.36) by 10%, on the premisesthat the insurer’s shareholding periods for the CSI 300 index and the CSI Div. LowVol 100 index by over three years and for the STAR Market by more than two years.TheNoticeissued on 5 Dec (Fri) marks the regulators’ sustained efforts since Mayto guide insurance funds into the stock market, which we estimate that the easingrule could release RMB102.6bn incremental funds into the CSI 300 market, if total China Insurance Sector Nika MA(852) 3900 0805nikama@cmbi.com.hk Related reports: minimum capital release were to be fully invested. By 3Q25, total balance of stockinvestment amounted to RMB 3,621bn, rising 49% from year-start. We assume that 1.中国保险-股票投资风险因子拟再优化，险资长钱加速入市可期, May, 8, 2025(link) 2.China Insurance:Raised cap forinsurer’sequity asset allocation couldunleash max. RMB 1.7tn to stock market,Apr 9,2025 (link) 3.ChinaInsurance-4Q24 insurancefunds:industry financial rate of returnextended rally in a five-quarter streak,Feb 25, 2025 (link) Expect the new rule to release RMB 102.6bn incremental funds into the CSI300 or 1.14pct improvement on the comprehensive solvency ratio.In 3Q25,the balance of insurance fund investments in stocks amounted to RMB 3,621bn,rising 49% from year-start. We assume the industry average allocation to the CSI300, the CSI Div. Low Vol, and the STAR Market to be 50%/10%/5%, and thefulfilment rates for the respective holding periods of more than 3yrs/3yrs/2yrs tobe 50%/20%/20%(Table 1). We assume lower rates for stock investments in theCSI Div. Low Vol and STAR Market, given the industry rebalancing on the high-dividend stocks since 2023 and the growth stocks in STAR Market in recent twoyears, shorter than the required holding periods of over 3yrs/2yrs respectively. 4. China Insurance - 11/12M Monthly: Lifesales diverged during the jumpstart; P&Csoftened by non-auto slowdown, 21 Jan,2025 (link) 5. China Insurance - 10M24 Monthly: Lifepremiumretreated as expected,P&Cgrew with auto sales momentum, Nov 19,2024 (link) 6. China Insurance - 9M24 Monthly: Lifegrowth normalized with highlights; P&Cexpected to see better UW profit, Oct 21, 7. China Insurance - 8M24 Monthly: Lifejumpedon top of low base;P&C topplayersrebounded in growth,Sep 23,2024 (link) Highlight in guiding a long holding period for the blue-chip, high-yield andgrowth stocks.TheNoticeaddresses the regulatory support for insurance fundinvestments in the CSI 300, CSI Div. Low Vol 100, and the STAR Market, whichrepresents the blue-chip, high-yield and growth stocks in A-share market. Beyondthe incremental funds and improved comprehensive solvency ratio,we think thehighlight stands in guiding the long stockholding period of the trillion-sizedinsurance funds into A-share markets.TheNoticeadds on the holding periodfor the CSI 300 and the CSI Div. Low Vol indices to be determined based on theweighted average holding period in the past six years, and for the STAR Market 8. China Insurance - 7M24 Monthly: Lifemomentum kept strong; P&C edged up byauto & non-auto rebounds, Aug 20, 2024(link) 9. China Insurance - Insurance funds:Life/P&C diverged in allocation; financialyields marginally recovered in 2Q, Aug14, 2024 (link) 10. China Insurance - 6M24 monthly: Lifeprints better-than-expected on high base;P&C dragged by auto sales, Jul 23, 2024(link) 11. China Insurance - 5M24 Monthly: lifegrowthstayedresilient;P&Cautopremiumssequentially rebounded,Jun19, 2024 (link) Expect Ping An & China Life to be key beneficiaries of the new rule.The topfive sectors by weight in the CSI 300 and CSI Div. Low Vol indices are Banking,Food & Beverage, Transportation, Utilities and Electronics. Ping An-A (601318CH) remains the top 10 heavyweight stock in the CSI 300 index being capable ofcapturing the significant share of capital inflows on this benchmark, in our view.Ping An Life held stakes in eight CSI 300 constituents as the top ten shareholders 12.中国保险行业-路演反馈：政策催化下的弹性拉涨可否持续? Jun 5, 2024 (link) of minimum capital for equity price risk as a % of total quantitative risk minimumcapital at 83.6%, followed by PICC Life’s 72.7%, NCI’s 71.7%, CPIC Life’s 57.4%,Ping An Life’s 56.7%, Taiping Life’s 53.8% and Sunshine Life’s 46% (Table 2).Given this, the risk factor downward adjustment on stock investments couldpotentially unleash high-than-peers upside for China Life’s minimum capital use. Maintain sector rating at OUTPERFORM.China’s insurance sectoris tradingat 0.2x-0.6x FY26E P/EV and 0.6x-1.2x FY26E P/B with an average yield of 4.1%(Table). We remain optimistic on the sector’s outlook in FY26E with the supportof policy-guided overhaul on asset allocation to drive a sustainable path of thesector’s valuation recalibrat