economic daily: actively guide insurance funds to become patient capital
2024-10-06
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the recently held executive meeting of the state council proposed the need to cultivate and expand patient capital such as insurance funds, break through institutional obstacles, improve the assessment and evaluation mechanism, and provide stable long-term investment for the capital market and technological innovation.
currently, our country is in a critical period of cultivating and developing new productive forces and leading the construction of a modern industrial system with scientific and technological innovation. it needs a financing system structure to effectively support the transformation and upgrading of the real economy. the scale of my country's financial system is already large, but the financing structure is unreasonable and there are problems such as "more money and less principal" and "insufficient patient capital".
insurance funds have the characteristics of large scale, long term, and high stability, and naturally have the potential to become patient capital. data show that as of the end of the second quarter of this year, the total assets of insurance companies and insurance asset management companies were 33.8 trillion yuan, an increase of 2.3 trillion yuan or 7.4% from the beginning of the year. the sources of insurance funds are mainly long-term insurances such as critical illness insurance, pension annuity insurance, and whole life insurance. they are characterized by stable cash flow and long duration, making them very suitable for long-term investment. in addition, insurance funds have a stable source and rely on annual premium income to continuously replenish the capital pool, allowing insurance companies to maintain a relatively stable investment strategy in the face of market fluctuations and not easily disturbed by short-term fluctuations.
although insurance funds have many advantages as patient capital, they still face some challenges in practice. on the one hand, insurance funds are known as "life-saving money", and risk is always the primary consideration for insurance companies' investments. on the other hand, the current incentive mechanism and assessment system are not conducive to long-term investment. for example, the assessment mechanisms of some insurance companies also focus on short-term returns. capital market fluctuations directly affect the current profits of insurance companies, which in turn affects performance assessment. in addition, listed insurance companies face quarterly financial disclosure requirements, which further limits their investment in long-term, high-risk projects.
therefore, it is necessary to comprehensively optimize policies and mechanisms, actively guide insurance funds to become patient capital, and enrich long-term funds for technological innovation and capital markets.
optimize portfolios and strategies. insurance funds can increase overall returns and reduce sensitivity to the failure of a single project by extending the investment period and optimizing portfolio management. for example, in the fields of strategic emerging industries and technological innovation, insurance funds can diversify risks through equity investment, mezzanine investment, etc., to avoid missing long-term investment opportunities due to excessive focus on single project risks.
improve the assessment and evaluation mechanism. the accounting mechanism for insurance funds can be appropriately optimized, and long-term assessments of three years or more can be strengthened to allow insurance funds to achieve "long-term investment". in october last year, the ministry of finance issued the "notice on guiding long-term and steady investment of insurance funds and adjusting relevant indicators for performance evaluation of state-owned commercial insurance companies", which clearly changed the operating efficiency performance evaluation indicator "return on net assets" of state-owned commercial insurance companies from that of the current year. the assessment is adjusted to a combination of "3-year cycle + current year" assessment method. this will help reduce the adverse impact of short-term assessments and increase their enthusiasm for investing in equity assets such as stocks and funds.
innovative investment tools and methods. insurance companies can flexibly participate in investments in strategic emerging industries by establishing private equity funds, mergers and acquisitions funds, and venture capital funds. at the same time, new investment tools such as reits (real estate investment trust funds) also provide insurance funds with more flexible and diversified investment paths.
in the future, as the policy environment is further optimized, insurance funds are expected to play a greater role in supporting technological innovation, strategic emerging industries, and infrastructure construction. at the same time, the investment model of insurance funds will also be more diversified, providing long-term and stable financial support for the healthy development of the real economy and capital market through equity investment, mergers and acquisitions, industrial funds, etc.
source: economic daily
author: jin guanping
