Why did insurance surge! Can brokerages follow?

Yesterday, while the overall market was relatively weak, the insurance sector surged against the trend. There was no specific news catalyst for yesterday's rise, but there have been quite a few positive developments in the insurance industry recently.

First and foremost, the "Notice on Adjusting Risk Factors for Insurance Companies' Related Businesses" issued on December 5th further optimizes risk factors for equity holdings, import-export credit insurance, and overseas investment insurance businesses. This is conducive to guiding long-term capital into the market.

The proportion of equity investments by insurance funds has increased significantly since 2025, as we highlighted in "Insurance Companies Made a Killing in Stock Trading".

In that article, we also mentioned a specific target: the China Securities Insurance Theme Index by Founder Fubon. Looking back, the gains from then to now have indeed been substantial. Let’s delve deeper into why this index was chosen:

First, based on the weighting of relevant stocks, we can see that insurers with higher equity exposure, such as China Life and New China Insurance, have the highest weightings in this index.

On the other hand, the Hong Kong stock market has been relatively weak recently, heavily influenced by external factors. Therefore, it’s advisable to avoid the insurance sector in Hong Kong stocks for now and instead focus on the A-share insurance sector, which has lagged behind its Hong Kong counterpart.

Finally, beyond insurance, is there still an opportunity in the securities sector?

At present, the path seems to be insurance leading the way, followed by brokerages. For brokerages to rise again, the overall market needs to move upward.

Therefore, if you’re considering a single insurance or securities sector play but find the risk too high or are uncertain, you could opt for something like the CSI 300 Non-Bank Financial ETF or the CSI 800 Securities & Insurance Index.

(Not investment advice)

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