China’s insurance funds significantly increased their exposure to equities in the second quarter of 2025, according to the latest data from the National Financial Regulatory Administration (NFRA).
Stock allocations surged 8.9% compared with the first quarter and almost 48% year-on-year, far outpacing the 17% rise in total allocated funds during the period, the NFRA said on Aug. 15.
In Q1, insurance funds had invested CNY 2.82 trillion (USD 392.6 billion) in stocks, up 16% from the previous quarter, NFRA data showed.
As of June 30, the insurance industry’s total assets reached CNY 39.2 trillion (USD 5.46 trillion), up 9.2% year-on-year. The share of equities in their asset allocation climbed to 8.5%, compared with 6.7% a year earlier.
Industry experts attribute the increase in stock holdings to two main factors:
- Low interest rate environment – insurers are turning to dividend-paying listed companies to counter falling bond yields.
- Regulatory support – in April, the NFRA raised the stock allocation cap by 5 percentage points, enabling insurers to invest 10%–50% of their total assets in equities depending on solvency ratios.
Insurance premium income also grew, with companies collecting CNY 3.7 trillion (USD 515.2 billion) in the first half, up 5.1% year-on-year. Life insurance premiums led the growth, rising 5.4% in the first six months, supported by strong demand for savings-type insurance products amid declining bank deposit rates and expectations of an interest rate cut at the end of August.
Analysts note that life insurers are heading into a product transition phase later this month, as customers rush to purchase products expected to be phased out. However, given this would be the third straight year of rate cuts, much of the demand has already been absorbed, limiting the scale of the upcoming boost.