Cailian Press, 10 13: (Reporter Gao Ping) Recent market volatility, particularly the pullback in tech stocks, has drawn attention. There are also reports suggesting that some insurance asset management firms have reduced positions and cut losses after buying tech stocks, with claims that "passive redemptions from insurance funds and fixed income-plus products are the core selling pressure in this round."
A non-brokerage analyst told Cailian Press that insurance capital may reduce positions, but the scale is likely limited. Due to regulatory requirements on the position levels of self-owned insurance funds, large accounts cannot net-reduce holdings. Outsourced special accounts must remain accountable to clients and face redemption or drawdown constraints. The core directive for insurance capital to invest long-term remains unchanged. Insurance companies also operate under performance assessment cycles and uphold a long-term investment philosophy.
A market insider deeply rooted in the insurance sector admitted that insurance capital has always been cautious, particularly among top-tier insurers. Their portfolio follows a stable barbell structure with a long-term holding strategy. "Insurance funds may reduce their holdings, but the volume will be minimal."
A senior asset management executive at a top-tier insurer told Cailian Press that insurance funds remain committed to serving as the "ballast" and "stabilizer" of the capital market. On new quality productive forces, they are equally dedicated to acting as "supporters" and "accelerators." According to the executive, the insurer is steadily increasing its allocation to key areas such as new quality productive forces and advanced manufacturing.
Industry View: Insurers May Reduce Positions, but Volume Limited; Large Accounts Cannot Net-Sell Due to Capital Allocation Requirements
An insurance asset management executive told Cailian Press that stop-loss rules for equity assets vary by insurer. While some companies have clear stop-loss thresholds, most insurers focused on dividends may not engage in active trading.
A non-bank broker analyst told Cailian Press that since 10, some insurance companies have reduced their holdings, but the reduction has been limited. Due to regulatory requirements mandating a minimum position level for insurers' own capital, large accounts can only rebalance positions, not reduce them net.
The analyst further distinguished two types of accounts: first, proprietary insurance funds, which are restricted by position limits and can only rebalance.
Second, outsourced special accounts: these funds are accountable to clients and subject to redemption and drawdown constraints, with passive position-reduction logic similar to that of public mutual funds.
"However, recent market volatility is not driven by insurance fund selling," said the non-bank analyst.
Long Ge, Deputy Director of the Center for Innovation and Risk Management at the University of International Business and Economics, told Cailian Press that there is no unified hard stop-loss limit. According to regulations, the equity cap for insurers varies by solvency tier from 10% to 50%. In practice, the industry's combined stock and fund positions typically range between 10% and 20%, with long-term capital favoring dividend-paying assets and OCI instruments.
Long emphasized that life insurance companies rebalance their own funds based on the principles of safety, liquidity, yield, and asset-liability matching—not through retail-style stop-loss trading.
Insurance funds will continue increasing allocations to dividend-paying assets.
Recently, U.S. and Chinese tech stocks have diverged significantly. According to analysts at Guojin Securities, this divergence is not driven by deteriorating fundamentals but by concerns over future fundamentals stemming from potential U.S. sanctions led by the FCC, which has suppressed valuations. This effect has been amplified by crowded trading positions.
On the technology sector, the insurance asset management executive noted that the long-term investment thesis remains unchanged, though there are numerous short-term market disruptions.
A non-bank broker analyst told Cailian Press that insurance funds will continue to increase their holdings in dividend assets to hedge against market volatility. In the future, they may also consider including some technology-focused assets in OCI to reduce the impact on the income statement.
Long Ge told China Finance News that under the IFRS 9 framework for new financial instruments, listed equity assets held by insurers can be broadly categorized into three types: FVTPL assets (tech stocks are typically classified here), where fair value changes flow through current profit; FVOCI assets (high-dividend dividend bases are mainly placed here), where market value fluctuations go to other comprehensive income and do not affect current profit; and long-term equity investments accounted for using the equity method to recognize investment income.
Rong added that disposing of FVTPL assets recognizes floating losses as actual losses, directly impacting current net profit. Reducing holdings in FVOCI assets only realizes accumulated floating losses within net assets without affecting the income statement. Disposing of long-term equity investments records the disposal gain or loss in current earnings. Life insurance long-term funds are primarily allocated to FVOCI and long-term equity investment accounts; the main sources of profit impact are absolute return accounts, fixed-income-plus products, and trading accounts, not the policyholder funds themselves.
