A research report from Guolian Minsheng Securities indicates that looking ahead to 2026, the combined improvement in both assets and liabilities is expected to support the continued recovery of insurance sector valuations. On the liability side, the firm anticipates that participating insurance products are likely to attract some of the funds being reallocated by households from savings. Strong sales of participating insurance are expected to support robust growth in new life insurance premiums and New Business Value (NBV). For the property and casualty insurance sector, the full implementation of "filing and operation integration" across all insurance lines, along with proactive efforts by insurers to optimize their business structures, is projected to lead to a stable or improved Combined Ratio (COR).

On the asset side, driven by regulatory guidance aimed at fostering a long-term, steady bull market in capital markets and a narrowing decline in long-term interest rates, investment returns for insurance companies are expected to remain favorable. The main views of Guolian Minsheng Securities are as follows:

The scale of insurance funds continues to show a growth trend, with life insurers holding an absolute majority share. By the end of the fourth quarter of 2025, the balance of insurance fund utilization reached 38.5 trillion yuan, an increase of 15.7% compared to the end of the fourth quarter of 2024 and a 2.7% increase from the end of the third quarter of 2025, indicating a sustained expansion. By sector, as of the end of Q4 2025, the fund utilization balances for life insurance companies and property and casualty insurance companies were 34.7 trillion yuan and 2.4 trillion yuan, respectively. These figures represent increases of 15.7% and 8.8% year-on-year, and sequential increases of 2.8% and 1.2% from Q3 2025. The faster growth in fund utilization by life insurers is primarily attributed to strong household demand for reallocating savings and the concentrated release of customer demand following reductions in the assumed interest rates for life insurance products, which subsequently drove growth in life insurance premium income.

Structurally, as of the end of Q4 2025, the proportions of fund utilization balances for life insurers and property and casualty insurers relative to the total insurance fund utilization balance were 90.1% and 6.3%, respectively. This represents an increase of 0.1 percentage point and a decrease of 0.1 percentage point from the end of Q3 2025, underscoring the dominant position of life insurers.

Life insurance companies marginally increased their allocations to deposits and bonds, while the proportion allocated to equity assets saw a marginal decline. By the end of Q4 2025, the allocation sizes of life insurers to fixed-income assets (bank deposits + bonds) and equity assets (stocks + funds + long-term equity investments) were 20.37 trillion yuan and 7.98 trillion yuan, respectively. These figures represent sequential increases of 3.4% and 1.2% from Q3 2025. In terms of allocation ratios, fixed-income assets and equity assets accounted for 58.8% and 23.0%, respectively, of the total fund utilization balance of life insurers. This reflects an increase of 0.4 percentage points and a decrease of 0.3 percentage points from the end of Q3 2025. Specifically, the proportions of bank deposits, bonds, stocks, funds, and long-term equity investments within the life insurers' fund utilization balance were 7.6%, 51.1%, 10.1%, 5.1%, and 7.8%, respectively. Compared to the end of Q3 2025, these figures changed by +0.3 percentage points, +0.1 percentage points, essentially flat, -0.1 percentage point, and -0.2 percentage points. The marginal increases in the shares of bank deposits and bonds are anticipated to be primarily due to life insurers increasing their allocation to fixed-income assets to stabilize investment returns against the backdrop of heightened volatility in the equity market during Q4 2025.

Property and casualty insurance companies marginally increased their allocations to deposits and stocks, while the proportions allocated to funds and long-term equity investments experienced a marginal decline. By the end of Q4 2025, the allocation sizes of property and casualty insurers to fixed-income assets (bank deposits + bonds) and equity assets (stocks + funds + long-term equity investments) were 1.37 trillion yuan and 0.55 trillion yuan, respectively. These represent sequential increases of 1.9% and 0.3% from Q3 2025. Regarding allocation ratios, fixed-income assets and equity assets accounted for 56.7% and 22.9%, respectively, of the total fund utilization balance of property and casualty insurers. This reflects an increase of 0.4 percentage points and a decrease of 0.2 percentage points from the end of Q3 2025. Specifically, the proportions of bank deposits, bonds, stocks, funds, and long-term equity investments within the property and casualty insurers' fund utilization balance were 16.1%, 40.6%, 9.4%, 7.8%, and 5.8%, respectively. Compared to the end of Q3 2025, these figures changed by +0.4 percentage points, essentially flat, +0.7 percentage points, -0.5 percentage points, and -0.4 percentage points. The noticeable marginal increases in the shares of bank deposits and stocks, coupled with declines in the shares of funds and long-term equity investments, are expected to be driven by several factors. These include the high demand for liquid assets due to the peak claims season at year-end, regulatory efforts to further optimize solvency risk factors to attract insurance capital into the market, and increased volatility in the equity market during Q4 2025, which led to greater fluctuations in fund values.

Risk warnings include economic recovery falling short of expectations, a decline in long-term interest rates, and intensified volatility in capital markets.