Zhongtai: The scale of insurance capital is steadily increasing, and the banking sector is more favored due to high dividends.

Zhongtai released a research report stating that the scale of insurance funds' investments is steadily increasing. Due to the decline in long-term interest rates and long-term rates being lower than the predetermined interest rates of insurance products, the proportion of stock investments has increased significantly, with the growth rate exceeding that of bonds. In terms of the stock market value of heavy stock investments, bank stocks have always held the highest proportion, and after 2023, the performance and proportion of bank stocks increased. In 2025, which saw a record number of stock acquisitions, bank stocks accounted for 41.9% of the acquisitions. Current policies are driving long-term funds into the market, and measures to increase the proportion of equity investments held by insurance funds through modifications to insurance company assessment mechanisms and regulations have been proven feasible in overseas countries such as the United States and Japan. It is estimated that the total amount of new insurance funds in 2025 and 2026 will both exceed 4 trillion yuan, and the proportion of stock investments is expected to continue to increase. Key points from Zhongtai include: - Steady growth in insurance funds and an increase in the proportion of stock investments. - As of the first half of 2025, the scale of insurance funds in China increased by 17.4% compared to the previous year, reaching 36.2 trillion yuan, with life insurance companies accounting for 90.0% of the total. The proportions of bond and stock investments were 51.1% and 8.8% respectively, with both increasing compared to the previous year, and the growth rate of stock investments exceeding that of bonds. - In the industry distribution of the stock market value of heavy stock investments, the banking sector consistently held the highest proportion, at 47.2% in the first half of 2025. After 2023, the proportion of bank stocks increased again. By the third quarter of 2025, insurance funds had acquired stakes in companies 31 times, with bank stocks accounting for 41.9% of the acquisitions. - Investment recommendations: 1. In the current policy and macroeconomic environment, the trend of insurance funds entering the market and increasing their equity investment proportion is deepening. The experiences of the United States and Japan have proven the feasibility of this path. Within stock investments, the banking sector's high dividend features make it more attractive to insurance funds, and in a stable policy and interest rate background, it is expected that insurance funds will further increase their holdings of bank stocks in the future. 2. Two main investment themes for bank stocks are: those with regional advantages and strong certainty, including city commercial banks, and those with high dividend stability. Risk factors: Economic downturn beyond expectations; financial regulation beyond expectations; outdated research report information; policy implementation falling short of expectations.