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on september 24, the contents of the press conference of the state council information office by one bank, one bureau and one commission attracted attention from all parties in the market. as the representative of long-term funds and patient capital, promoting medium- and long-term funds such as insurance to support the steady development of the capital market has become an important content.

among them, issues such as insurance institutions setting up private securities investment funds, increasing market investment, using exchange-facilitation policy tools to support the stable development of the stock market, and optimizing the assessment mechanism have sparked heated discussions in the industry. china securities journal reporters interviewed insurance fund professionals as soon as possible.

on that day, affected by a series of favorable factors, insurance stocks rose across the board, with the a-share insurance index rising 5.58%.

some insurance funds are studying private equity funds

li yunze, director of the financial regulatory administration, said at the meeting that the financial regulatory administration has always attached great importance to the capital market and actively guided banks, insurance and asset management institutions to maintain the stability of the capital market.

"in the next step, we will continue to support the steady development of the capital market." li yunze said that first, we will expand the pilot reform of long-term investment of insurance funds, support other qualified insurance institutions to establish private securities investment funds, and further increase investment in the capital market. second, we will urge and guide insurance companies to optimize the assessment mechanism, encourage and guide insurance funds to carry out long-term equity investment. third, we will encourage financial management companies and trust companies to strengthen equity investment capacity building, issue more long-term equity products, actively participate in the capital market, and cultivate and expand patient capital through multiple channels.

he introduced that, in the early stage, with the approval of the state council, the financial supervision bureau promoted china life and new china life insurance to carry out a pilot project and jointly initiated the establishment of a private securities investment fund to raise insurance funds to invest in the capital market. the fund has a registered capital of 50 billion yuan and has officially started investment operations, and is currently progressing smoothly.

many institutions, including large insurance asset management companies and medium-sized insurance groups, have expressed the possibility of establishing private equity funds to invest in the capital market. a person in charge of the investment department of a medium-sized insurance institution said that the private equity fund approach is being studied, which involves complex and multi-dimensional considerations. the private equity fund approach was studied last year, and now more information, such as supporting policies, is needed.

the private equity funds established by china life and new china life are special in that they are corporate funds. in the eyes of the industry, this method has certain advantages over direct stock investment. guotai junan securities' non-bank team previously analyzed that china life and new china life insurance each invested 50% to establish corporate funds to invest in the secondary equity market. from the perspective of accounting measurement, they can be measured using long-term equity investment methods to avoid the impact of market value investment fluctuations on current profits. using the equity method to account for the profits and dividends of private equity fund companies in proportion to investment income can effectively alleviate the impact of direct investment in the secondary equity market on the financial statements under the new accounting standards.

for companies with a high proportion of third-party assets, they are more concerned about whether there is a breakthrough in the investment scope. an official from a medium-sized insurance asset management company analyzed that the establishment of private securities investment funds will definitely increase the equity market. however, at present, insurance asset management companies can directly invest in the equity market. they are more concerned about whether the establishment of securities investment funds will lead to a breakthrough in the investment scope or other supporting measures. in this regard, we need to look at the specific details.

implementation of long-term assessment has attracted attention

for a long time, the long-term liability characteristics of life insurance funds and the assessment of short-term investment returns have become important factors hindering the "long-term investment" of insurance funds.

wu qing, chairman of the china securities regulatory commission, said at the meeting that the current capital market still faces problems such as insufficient total amount of medium- and long-term funds, poor structure, and insufficient leading role, and the institutional environment for "long-term money and long-term investment" has not yet been fully formed. recently, with the strong support of relevant ministries and commissions, the china securities regulatory commission and other relevant departments have formulated the "guiding opinions on promoting the entry of medium- and long-term funds into the market", which will be issued in the near future, and focuses on three measures.

this includes improving the institutional environment for "long-term investment". the focus is to improve the regulatory inclusiveness of medium- and long-term equity investment, and fully implement long-term assessments of more than three years. it is necessary to remove the institutional barriers that affect the long-term investment of insurance funds, promote insurance institutions to become firm value investors, and provide stable long-term investment for the capital market.

how to improve the regulatory inclusiveness of equity investments of medium- and long-term funds and how to fully implement long-term assessments of more than three years have attracted widespread attention from insurance investment officers.

an insurance asset management company executive believes that judging from the trend of insurance stocks today, the series of measures will bring considerable benefits to the insurance industry. how to plan in the future still needs to pay attention to the subsequent specific guidance documents, especially the specific connotation and measures of "improving the regulatory inclusiveness of medium- and long-term equity investment".

some insurance investment professionals also expressed doubts about the difficulty of implementing long-term assessment cycles. "if the three-year assessment cycle is implemented, it can indeed greatly improve the insurance's tolerance for volatility. however, most asset management companies currently conduct absolute return assessments, and the life insurance side needs to come up with specific assessment plans. after all, they are the principal." said a middle-level person at a medium-sized insurance asset management company.

"from an investment perspective, we definitely welcome long-term assessments. we have a certain weight now, but it's not high," said a person from an insurance asset management company. the person also believes that in order to truly promote the implementation of long-term assessments, in addition to loosening up the institutional assessments on the investment side, efforts must also be made on the liability side to change the current industry status quo of over-reliance on interest rate spreads. "insurance companies have to calculate profits every year. if the cost of funds on the liability side is required to be 4%, all of which comes from interest rate spreads, this short-term pressure will definitely be transmitted to the asset side."

a person related to china life asset management previously told reporters that in order to optimize and improve the performance evaluation of insurance companies, it is recommended to promote the improvement of the long-term evaluation mechanism, explore methods that are linked to long-term interest rates and long-term rolling evaluation, and at the same time avoid evaluation methods that guide competitive comparisons among peers, prevent the convergence of institutional investment behavior strategies, and amplify market fluctuations.

zhou jin, partner of pwc china's financial industry management consulting, said that among the measures to optimize the capital market, the proportion of direct financing should be increased, the advantage of insurance funds as "patient capital" should be fully utilized, and the role of "stabilizer" should be played. through the reform of assessment standards, long-term investment should be guided and encouraged, short-term speculative behavior should be reduced, the capital market should be stabilized, and better support should be provided for industries and enterprises that are of national strategic significance and in line with policy orientations.

"there is no essential obstacle for insurance funds to increase equity investment and support the development of the capital market in the long term under the current regulatory system. however, the current assessment model and solvency standards do not provide sufficient motivation for insurance companies. therefore, regulators should reform and introduce supporting incentive measures to encourage and guide insurance funds to better play the role of 'patient capital'," said zhou jin.

convenient swaps or cost advantages

pan gongsheng, governor of the central bank, said that the creation of new monetary policy tools supports the stable development of the stock market. one of them is to create a securities, fund, and insurance company swap facility to support qualified securities, funds, and insurance companies to obtain liquidity from the central bank through asset pledge. this policy will greatly enhance the institutions' ability to obtain funds and increase stock holdings.

an insurance investment officer in south china believes that "creating an insurance company swap facility to support qualified insurance companies to obtain liquidity from the central bank through asset pledge is ultimately a question of cost-benefit. if there is cheaper liquidity, they will definitely be willing to trade with the central bank."

however, regarding the swap facility, several investment officers of insurance companies also said that they expect the short-term effect of insurance funds increasing their stock holdings to be limited. currently, insurance companies are not short of investment funds, but rather of suitable assets. insurance companies generally do not allocate equity assets to the maximum extent, and investment in the equity market is affected by many factors.

the above-mentioned insurance investment officer in south china told the reporter of securities china that the heads of one bank, one bureau and one commission revealed multiple favorable policies today, which indeed brought a positive boost to the capital market. "when separated, each policy basically met expectations, but when combined, the strength was slightly higher than expected."

the insurance investment officer said that in order to boost the economy, lowering the interest rate on existing mortgage loans is what everyone expects; in order to boost the stock market, providing repurchase loans to major shareholders to boost confidence is the biggest highlight of this new policy combination, and there are no technical obstacles. "next, if the lpr is further reduced, it will be even better."