Insurance companies lowering the risk factors related to stock investments may release over one trillion yuan of market funds.

The China Banking and Insurance Regulatory Commission recently issued a notice on adjusting the risk factors related to insurance companies' investment in stocks. The risk factors for holding stocks of the Shanghai and Shenzhen 300 Index and the CSI Dividend Low Volatility 100 Index for more than three years were adjusted from 0.3 to 0.27. The holding period is determined based on the weighted average holding period of the past six years. The risk factor for holding stocks of companies listed on the Science and Technology Innovation Board for more than two years was adjusted from 0.4 to 0.36. The holding period is determined based on the weighted average holding period of the past four years. Ge Yuxiang, Chief Analyst of Non-Bank Financials at China Thaim Securities, told reporters that by the end of the third quarter of 2025, the end-of-period balance of insurance funds invested in stocks will be 3.62 trillion yuan. Assuming 40% of this is invested in Shanghai and Shenzhen 300 Index stocks, 5% in CSI Dividend Low Volatility 100 Index stocks, and weighted average holding periods meeting the requirements of the notice account for 20%, the static release of the lowest capital before considering risk diversification would be 326 billion yuan. If this portion of funds is all allocated to Shanghai and Shenzhen 300 Index stocks, it would correspond to 1086 billion yuan in the stock market. If stocks are not allocated, the improvement in the industry's solvency adequacy ratio would be approximately 1 percentage point.