China insurers to invest $14b in equities by 2025

If based on 2024 data estimated total fund allocation could reach $57b.

China’s state-owned life insurers could inject over $14.0b (CNY100b) into the country’s equity markets if a government directive requiring 30% of new premiums to be invested in stocks is fully implemented, according to an analysis by S&P Global Market Intelligence. 

Authorities expect major state-owned insurers to begin allocating 30% of newly added insurance premiums to yuan-denominated equities starting in 2025.

Based on 2023 new business premiums, China Life Insurance Co. Ltd. would invest $8.85b (CNY63.24b), China Pacific Insurance (Group) Co. Ltd. $3.48b (CNY24.86b), The People’s Insurance Co. (Group) of China Ltd. $2.03b (CNY14.50b), and New China Life Insurance Co. Ltd. $1.72b (CNY12.27b). Their solvency ratios stand at 218.5%, 257.0%, 250.7%, and 278.4%, respectively. 

According to Sun Ting, chief analyst for the nonbank financial sector at Soochow Securities, if based on 2024 data, the estimated total fund allocation to yuan-denominated equities in 2025 from five state-owned life insurers—China Life, China Pacific Insurance, New China Life, People’s Insurance, and China Taiping Insurance Group Ltd.—could reach $56.57b (CNY404.1b).

The government’s directive appears to have bolstered market sentiment, with the CSI 300 index approaching 4,000.

The announcement came one day after US President Donald Trump stated he was considering imposing tariffs on Chinese goods, which had initially caused a dip in the index. 

China’s equity markets could see further gains if private insurer Ping An Insurance (Group) Co. of China Ltd. increases stock investments alongside its state-owned counterparts.