The long-term strength of each round of the equity market often does not start from the market itself, but from changes in the capital structure.
This year, a long-ignored group of funds is undergoing a directional adjustment: insurance funds.
Its scale is large enough, its pace slow enough, and its duration long enough. Once it moves, it signifies a change in the underlying capital structure of the A-share market.
Recent regulatory adjustments have reduced the &#34;invisible costs&#34; for insurance funds entering the stock market... The decline in the interest rate center has made fixed income unable to support future liabilities... The continuous growth of long-term premiums has constantly expanded the investable scale... This year, there has already been an increase of over one trillion yuan in insurance fund positions...
These originally scattered factors are merging into a new funding path.
The &#34;new variable&#34; that A-shares need to pay attention to is not short-term sentiment, but this long-term incremental capital that is forming.
This variable is reshaping the bottom strength of the market at its own pace and scale.
<h2>Insurance Funds' &#34;Hidden Cards&#34; Revealed</h2>
On December 5th, the National Financial Regulatory Administration issued a notice on &#34;Adjusting the Risk Factors for Related Business of Insurance Companies.&#34;
In this document filled with &#34;technical flavor,&#34; two statements have attracted market attention:
<blockquote>
The risk factor for insurance companies holding stocks in the CSI 300 Index and the CSI Dividend Low Volatility 100 Index for more than three years has been lowered from 0.3 to 0.27.
The risk factor for insurance companies holding ordinary shares listed on the Sci-Tech Innovation Board for more than two years has been lowered from 0.4 to 0.36.
</blockquote>
For ordinary investors, the names of these three indices may be a bit convoluted, but they actually point to something &#34;simple&#34;:
The CSI 300 Index represents the largest and most stable companies in the A-share market.
The Dividend Low Volatility Index represents companies that steadily generate income with minimal fluctuations.
The Sci-Tech Innovation Board Index represents technology companies with strong future growth potential.
For insurance companies, it has become clear where future long-term funds directed towards A-shares should be allocated, and the hidden cards of insurance funds have begun to take shape.
<h2>Decrease in &#34;Invisible Costs&#34; of Insurance Investment</h2>
To understand the strength of this policy, one must grasp a core term: risk factor.
This term, which sounds particularly technical, can be understood as follows:
<blockquote>
When an insurance company buys a stock, regulators require it to &#34;set aside a reserve&#34; on its books, just in case. The higher the risk factor, the more reserve capital is needed; the lower the risk factor, the less is required.
For the same purchase of 100 yuan worth of stock, if the risk factor is 0.4, the insurance company has to set aside a large amount of capital to &#34;watch over&#34; it; if the risk factor drops to 0.27, the amount of money that needs to be set aside significantly decreases.
For insurance companies, if the risk factor is lowered, the &#34;invisible cost&#34; of a stock investment in internal assessments will decrease, and the potential investment space will increase.
</blockquote>
For a long time, people have felt that insurance funds are conservative in stock investments, not because insurance companies do not recognize A-shares, but because high risk factors in the past meant that the more they invested, the more capital was occupied, leading to greater pressure on their books
This adjustment is equivalent to reducing this &#34;invisible burden&#34; by a portion.
<h2>&#34;Trillion Yuan Increase&#34; Has Already Happened</h2>
In fact, the scale of stock purchases by insurance institutions in the first three quarters of 2025 reached the level of one trillion yuan.
ZhiShiTang has sorted through official data from financial regulatory authorities and found that since the beginning of this year, the scale of direct stock purchases by insurance institutions has increased by approximately 1.19 trillion yuan compared to the beginning of the year.
Specifically, by the end of the fourth quarter of 2024, the scale of stocks directly held by insurance funds was 2.43 trillion yuan; by the end of the third quarter of 2025, this figure rose to 3.62 trillion yuan.
It is worth noting that this approximately 1.19 trillion yuan is reflected in the book balance of direct stock investments, which includes both the natural increase brought about by rising stock prices and the actual investment from continuous stock purchases by insurance funds.
This one trillion yuan increment is a clear &#34;rehearsal&#34; for insurance funds to lower the risk factors of stock investments.
<h2>Why Focus on Insurance Funds Entering the Market</h2>
The entire market is closely monitoring the entry of insurance funds because they control a very special type of capital: large scale, slow rhythm, and long duration, making them inherently suitable for being the &#34;bottom warehouse&#34; of the stock market.
The core source of this &#34;money bag&#34; is long-term premiums, especially from life insurance and annuity products. Policyholders pay premiums year after year, while claims and benefits often occur 10 or even 20 years later, allowing insurance companies to hold a large pool of investable funds on their books for a long time.
In addition to the liability reserves accumulated by insurance companies over the years, as well as the returns accumulated from past investments, the capital base of insurance funds has thickened significantly over the past few years.
For a long time, this money was mainly invested in bonds, not because insurance companies &#34;look down on stocks,&#34; but because the environment at that time provided them with a simpler choice.
In recent years, both government bond yields and long-term credit bond yields have experienced a slow downward trend: long-term interest rates that were in the 3% and 4% range a few years ago are now increasingly seen in the 2% and 1% range.
The era of insurance products relying on buying bonds for fixed interest and earning some capital gains is coming to an end.
This round of slowly declining interest rates has precisely formed the time background for insurance funds to shift from &#34;mainly bonds&#34; to &#34;starting to seriously consider stocks.&#34;
Specifically for A-shares, there are several types of channels for insurance funds to enter the market.
The most direct is for insurance companies to buy stocks themselves, forming &#34;direct investment&#34; positions; secondly, public funds and separate account products hold stocks indirectly; entrusting funds to external investment platforms with unique investment strategies; similar to funds like Honghu Fund, which are funded by insurance companies' own capital and directly invest in stocks through private placement platforms.
<h2>How Much Incremental Capital Will There Be?</h2>
According to estimates from brokerage research reports, this adjustment of risk factors has provided a relatively clear scale of funds.
Shenwan Hongyuan has estimated based on data from the end of September that this adjustment is expected to release approximately 20 billion yuan of minimum capital for listed insurance companies in A-shares. After the reduction of capital occupation pressure, if the solvency adequacy ratio remains unchanged, the corresponding potential stock allocation space is approximately 78.9 billion yuan.
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This brokerage has an even bolder estimate: if life insurance companies increase their investment ratio in stocks and funds from the current approximately 15% to the policy limit of 30%, the theoretical &#34;potential increase space&#34; will reach about 3.2 trillion yuan.
If combined with longer-term institutional arrangements, the numbers will be more directional.
Xiangcai Securities mentioned in conjunction with the &#34;Implementation Plan for Promoting Long-term Funds to Enter the Market&#34; that regulators proposed that &#34;large state-owned insurance companies should use 30% of the new premiums each year for investment in A-shares starting in 2025.&#34; Their calculations show that by 2026, this &#34;30%&#34; corresponds to a new premium scale of approximately 2 trillion yuan, which is the core funding base for future increases in A-shares.
It can be seen that what A-shares will face in the coming years is not a one-time market entry action, but a long-term capital force that is taking shape and will continue to flow in

This year, a long-ignored group of funds is undergoing a directional adjustment: insurance funds. The "new variable" that A-shares need to pay attention to is not short-term sentiment, but rather this emerging long-term incremental capital. This variable is reshaping the market's bottom strength at its own pace and scale

New Variable in A-shares: "Emergence"