Regarding the promotion of medium- and long-term funds entering the market, multiple insurance companies have spoken out

Recently, the Central Financial Office and six other departments jointly issued the "Implementation Plan for Promoting Long-term Funds to Enter the Market." Several insurance companies stated that the series of measures proposed in the "Plan" will help to unblock the bottlenecks for long-term funds entering the market, guide insurance funds to further practice long-term investment, value investment, and prudent investment concepts, increase their layout in the equity market, and support the steady development of the capital market.

Increase the Weight of Long-term Performance Assessment

On January 23, the Chairman of the China Securities Regulatory Commission, Wu Qing, stated at a press conference held by the State Council Information Office that the "Plan" further proposes that public funds, state-owned commercial insurance companies, basic pension insurance funds, annuity funds, etc., must fully establish and implement performance assessments with a long cycle of three years or more, significantly reducing the weight of annual operational indicators for state-owned commercial insurance companies, and clarifying the arrangements for national social security funds with a long cycle assessment of five years or more.

Several insurance capital professionals mentioned in discussions with reporters that the assessment mechanism is one of the pain points affecting the entry of insurance capital and other long-term funds into the market. Currently, the performance assessments of insurance companies are mostly focused on the short to medium term, and the pressure of short-term performance assessments affects the enthusiasm of insurance capital to allocate equity assets to a certain extent.

Many insurance institutions believe that establishing a long-term assessment mechanism will help guide insurance institutions to deepen their long-term investment philosophy and increase the proportion of equity investments.

People's Insurance Asset Management stated that the "Plan" makes clear provisions for the long-term assessments of insurance, social security, pensions, and corporate annuities for the first time, which is conducive to guiding these funds to increase their proportion of equity investments and promote the entry of long-term funds into the market.

A relevant person in charge of China Life stated that the comprehensive establishment of a long-term assessment mechanism with a term of three years or more proposed in the "Plan" is significant for enhancing the proportion of equity asset investments, playing the role of a "stabilizer" and "ballast" for long-term funds in the capital market, overcoming short-term market fluctuations, and promoting the long-term steady development of the capital market.

A relevant person in charge of the asset company under China Life Group revealed that they will improve the matching mechanism for patient capital in the future, establish an internal incentive and constraint mechanism centered on long-term performance, and increase the weight of long-term performance assessments, effectively enhancing the consistency and stability of long-term investment, value investment, and prudent investment behaviors.

Increase Investment in Key Areas

On January 23, Xiao Yuanqi, Deputy Director of the Financial Regulatory Administration, stated at a press conference held by the State Council Information Office that currently, the amount of insurance funds invested in stocks and equity funds has exceeded 4.4 trillion yuan. From the perspective of insurance fund utilization, the capital market and equity of unlisted companies are the main investment directions, with the current proportion of investment in stocks and equity funds being 12%, and the proportion of investment in unlisted company equity being 9%.

"Insurance companies still have considerable potential and space for investing in stocks, and increasing stock investments is also a relatively good strategy and choice for the current asset allocation of insurance funds," said Xiao Yuanqi.

Many insurance institutions stated that they will fully leverage the long-term investment advantages of insurance capital, comprehensively use various product tools and investment strategies, and provide strong support for stabilizing the capital market.

People's Insurance Asset Management stated that they will continue to adhere to the principles of long-termism and patient capital management, on one hand, continuously enhance investment management capabilities, strengthen the depth of industry research, and continuously guide financial resources to gather in key areas to support the development of the real economy; On the other hand, actively exploring innovation, further enriching product tools, expanding investment models, accompanying excellent enterprises in their growth, enhancing the stability and vitality of the capital market, and promoting the high-quality development of the capital market.

A relevant person in charge of the asset company under China Life Group stated that it will strengthen investments in key areas, continuously optimize the allocation of funds, expand investment fields, and increase investment in major national strategies, key areas, and weak links such as technological innovation, industrial upgrading, and low-carbon development.

Ping An stated that it will further respond to the national call, leverage the advantages of large-scale long-term funds, flexibly use various comprehensive financial tools and investment strategies, and continuously increase investment in strategic emerging industries, advanced manufacturing, new infrastructure, and value-oriented varieties, reflecting the due responsibility of "patient capital" through practical actions.

A relevant person in charge of NCI stated that based on a thorough understanding of policy spirit, it will select investment targets based on professional judgment, adopt a more proactive posture, richer strategies, more effective measures, and more complete mechanisms, and earnestly implement the requirements of national regulatory authorities, steadily promote the entry of medium- and long-term funds into the market, and help enhance the inherent stability and risk resistance of the capital market, continuously improving the ability of insurance funds to traverse cycles and serve the real economy in the high-quality development of the capital market.

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