GTHT has released a research report forecasting that short-term trading factors will influence the performance of insurance stocks, while the long-term valuation benchmark remains affected by interest rates and the balance between assets and liabilities. It is anticipated that listed insurers will continue to optimize their asset allocation, steadily increase their holdings of equity assets, enhance comprehensive investment returns, and stabilize corporate profits and shareholder returns. The firm sees potential for valuation recovery from low levels and maintains an "overweight" rating for the industry.

In the second quarter of 2026, insurance capital allocations to stocks and funds reached new highs. It is expected that listed insurers will continue to refine their asset allocation strategies to drive profit improvement. Trading factors remain the primary cause of short-term stock price fluctuations, and the report recommends focusing on high-quality leading stocks with advantageous dividend yields.

Key Highlights from GTHT

Short-Term Volatility Driven by Trading Factors, Focus on Quality Leaders

From July 31 to August 14, the Shenwan Insurance Index (801194.SI) fell from 1218.35 to 1142.31, a decline of 6.24%. During the same period, the CSI 300 rose by 1.69%, the Shanghai Composite Index increased by 2.48%, and the Hang Seng Index fell by 2.97%. The report suggests that trading factors, such as capital preferences, remain the primary drivers of insurance stock price volatility. It is optimistic that leading insurers will steadily allocate equity assets to drive profit improvement, while continuously optimizing shareholder return policies. The recommendation is to focus on high-quality leading stocks with attractive dividend yields.

Record High in Q2 2026 Insurance Fund Allocations to Stocks and Funds, Multi-Tiered Pension System Supports Growth

1) The Ministry of Civil Affairs and the National Committee on Aging released the "2025 National Report on the Development of the Aging Industry," indicating that China's multi-tiered pension security system is accelerating its improvement, with basic pension insurance coverage reaching 1.076 billion people.

2) The National Financial Regulatory Administration (NFRA) disclosed the progress of insurance claims related to recent major natural disasters. As of 12:00 on August 11, in response to Typhoon "White Dolphin," insurance institutions in five regions (Zhejiang, Shanghai, Jiangsu, Jiangxi, and Ningbo) had received nearly 100,000 claims, with an estimated loss of 1.2 billion yuan.

3) Unitree Technology disclosed the results of its IPO subscription on the Science and Technology Innovation Board (STAR Market). A total of 37 insurance institutions participated with 2,617 valid bids, ultimately securing 6.8297 million shares, with a total amount of 1.03 billion yuan calculated at 150.80 yuan per share.

4) In the second quarter of 2026, the balance of insurance fund utilization reached 40.8 trillion yuan, an increase of 6.1% from the beginning of the year. The allocation to "stocks + funds" stood at 6.39 trillion yuan, an increase of 0.8 percentage points from the start of the year.

Corporate Actions and Market Developments

New China Life Insurance H-shares saw an increase in holdings by foreign institutions, with JPMorgan Chase raising its stake to 5% on July 27. On August 5, Wellington increased its stake in People's Insurance Group of China H-shares to 5.01%. The NFRA granted approval for PICC Life Insurance to publicly issue up to 10 billion yuan in perpetual capital bonds on the interbank bond market. People's Insurance Group of China announced that Tan Jiong has been appointed as the executive director and chairman of the company's fifth board of directors. The China Securities Regulatory Commission (CSRC) disclosed the latest administrative licensing progress, indicating that CPIC Life Insurance's application for a public fund distribution license has been accepted. Nuanwa Technology released a new AI claims product, "Lop Nor 2.0," which features a dynamic logic engine to streamline the entire intelligent claim review process.

Risk factors include: improvement in liability costs falling short of expectations; the sustainability of customer demand for insurance savings products being lower than anticipated; a decline in long-term bond yields; and volatility in the equity market.