Mid-term investment strategies for Western securities insurers: OCI stock allocation increases dramatically, and debt selection is a better time

The Zhitong Finance App learned that Western Securities released a research report saying that overall, the investment side of listed insurers in the first half of 2026 showed a clear trend of “fixed income bottom-up, enhanced equity, focus on standards, and long-term optimization”. The industry generally used long-term interest rate bonds to build a steady income base, enhance return elasticity with high-dividend blue chips and high-quality equity assets, and rely on standardized assets to reduce credit risk and enhance portfolio liquidity. Through long-term matching and accounting classification, the balanced allocation of ironing cycle fluctuations, high dividend+long-term + moderate equity Further consolidation to become insurers coping with falling interest rates and grasping Market opportunities and core strategic choices to achieve a healthy balance between assets and liabilities.

The main views of Western Securities are as follows:

In terms of allocation of major asset classes

At the end of June 2026, the total investment assets of the six listed insurers reached 23.3 trillion yuan, up about 5% from 22.3 trillion yuan at the end of 2025, accounting for about 57% of the insurance industry's capital utilization balance, and industry concentration remained stable; the main line of asset allocation was shifting from non-standard to standardized assets. The scale and share of non-standard assets continued to drop, and the proportion of high ratings remained high, and yields declined steadily. On the fixed income side, bonds are the core base, and the industry generally allocates additional interest rate bonds. Under the new standards, OCI bonds are the main allocators of bonds, and AC and TPL bonds account for a divided share; the deposit size structure is divided, and the share of industry deposits shifts downward, and long-term strategies are different. The equity side ushered in a comprehensive allocation cycle. Driven by policy guidance and market recovery, the size and share of equity assets increased significantly, TPL equity maintained high liquidity and elasticity characteristics, and the share of OCI equity rose steadily, becoming an important tool for insurers to smooth profits and enhance long-term returns.

In terms of return on investment

The net return on investment was affected by declining long-term interest rates and increased pressure on reinvestment. The industry center moved downward, and Ping An of China and China People's Insurance led the way with long-term management and diversified income structures. The return on total investment improved markedly with the equity market, and revenue flexibility was fully released: China People's Insurance led the way with an annualized total return on investment of 7.4% due to high equity exposure, followed by Xinhua Insurance and China Life Insurance flexibility. The comprehensive return on investment is more in line with long-term allocation capabilities. Dragged down by dividend sector adjustments and the decline in OCI equity valuations, it is generally lower than the total return on investment, and the return resilience of leading insurers is outstanding.

Aspects of return on classified assets analysis

The 2026 HOCI debt yield rebounded to the 2.2% to 2.9% range. Interest contributions were steady, and profit and loss from changes in fair value steadily changed to positive as the bond market stabilized; OCI equity yield performance was stable, dividend contribution was stable, high dividend coupon value was prominent, and changes in OCI fair value were negative as a whole. TPL asset returns are flexible enough. The positive equity market has led to a significant rise in TPL yields, and TPL disposal income and fair value changes have been released centrally.

Insurance debt allocations are not as strong as in the same period last year, but they are still active in stock and fund asset allocation

Focusing on ultra-long term bonds, insurance's allocation of ultra-long interest rate bonds has surpassed last year's, but it mainly relies on ultra-long local bonds. Furthermore, the overall term of insurance debt purchases has been lengthened, and the pressure on the long-term gap has decreased. Despite the strong expansion of dividend insurance in recent years and the reduction of rigid asset cost constraints, the pressure to match insurance costs is still strong, and attention is still being paid to absolute returns in the allocation of Eryong and General Credit bonds.

Risk warning: risk of falling interest rates, risk of equity market fluctuations, pressure on premiums, deviations in statistical caliber