CITIC Securities: The insurance sector is still in a major opportunity period, AI narrative adjustment brings a right investment window.

According to the research report of CSC Securities, looking ahead to the next 3-5 years, insurance companies in general will continue to benefit from strict regulation and anti-insider competitive environment, with the market share of the top seven companies expected to continue to concentrate. In a low interest rate environment, the migration of savings deposits to insurance companies is a win-win-win situation for banks, insurance companies, and customers. This trend is expected to continue long-term and form patient capital, greatly supporting the stock and bond markets as well as the development of the real economy. From a policy perspective, regulators will continue to promote the industry to strengthen asset-liability management, promote the construction of the second and third phases of the compensation system, reduce the quantity and improve the quality of small and medium-sized insurance companies, and encourage insurance companies to participate as strategic investors in the large-scale lock-up price increase of listed companies. The southward channel is expected to increase quotas and introduce insurance companies to increase their allocation of overseas high-yield bonds. The implementation of a series of policies will continue to act as a catalyst for the stock prices of the insurance sector. Looking ahead to the first quarter and mid-year reports in 2026, based on the low base of 2025, the sales of policies, investment income, and profit growth all have high certainty. The recent adjustments in AI narratives have brought about a right-side investment window, and it is recommended to focus on top companies with fast-growing new business value, stable profits and dividends, and low valuations.