One year after the policy gate opened, how has the nearly 200 billion yuan in insurance capital, once expected to flood the market, deployed its strategy in the face of gold market volatility? It is understood that the one-year pilot program for insurance capital investing in gold has concluded. Among the 10 approved insurers, six have completed membership procedures with the Shanghai Gold Exchange, entering the door of direct investment. Crucially, even participating institutions have acted with extreme prudence, far from the "long-term heavyweight buyer" role once anticipated by the market.
This cautious deployment contrasts with the theoretically vast investment space available. Behind this choice lies the question: is it driven by caution regarding future market risks, or does it reveal shortcomings in professional capability and internal mechanisms as newcomers to the gold market?
The pilot program includes 10 insurers. On February 7, 2025, the National Financial Regulatory Administration approved these companies, including PICC Property and Casualty, to begin gold investment pilots. Despite the policy being active for a year, insurance capital has largely avoided chasing the rally during gold's significant price surge, maintaining a cautious, trial-phase approach.
Following the policy announcement, the first batch of pilot institutions responded swiftly, completing membership and executing initial trades. In March 2025, insurers like China Life, PICC P&C, and CPIC Life announced their first gold transactions. Specifically, on March 24, the Shanghai Gold Exchange admitted PICC P&C, China Life, Ping An Life, and CPIC Life as members. The next day, China Life executed the insurance sector's first gold inquiry trade; PICC P&C completed the industry's first gold auction trade; and Ping An Life concluded the first Shanghai Gold Benchmark trade.
Subsequently, Taikang Life and Taiping Life also became members of the exchange in 2025. However, detailed information regarding specific position sizes remains scarce publicly.
The 10 pilot insurers are PICC P&C, China Life, Taiping Life, China Export & Credit Insurance, Ping An P&C, Ping An Life, CPIC P&C, CPIC Life, Taikang Life, and New China Life. To date, four of these insurers have not yet obtained Shanghai Gold Exchange membership. Even those who are members have not built large positions as some expected, with one insurer revealing its gold investment allocation remains minimal.
Financial commentator Guo Shiliang noted that while membership directly enables direct gold investment, the actual investment proportion is still very low, indicating a trial-phase approach. Pan Guta senior researcher Jiang Han added that the policy officially integrates gold into insurers' major asset allocation system, filling a gap for physical safe-haven assets and aiding duration matching and risk diversification. He observed that while leading insurers have responded actively, the overall rollout is prudent, avoiding a rush into irrational allocation. Despite a high theoretical investment ceiling, actual allocations are low, reflecting a strategy to first establish mechanisms before scaling up, especially given lack of experience and high, volatile gold prices.
When the policy was launched in February 2025, the market was optimistic. The notification allowed the 10 pilot insurers to invest in gold, with a cap stating the total book balance of gold investments should not exceed 1% of the company's total assets from the previous quarter. This implied a theoretical investment上限 of nearly 200 billion yuan, leading to expectations that insurance capital could become a major long-term buyer after central banks.
However, navigating this new territory is challenging. Jiang Han identified key hurdles: first, gold's high volatility and sharp pullback risks conflict with insurance capital's priority on safety and stable returns, discouraging heavy allocations. Second, gold's complex nature—combining commodity, currency, and financial attributes—with pricing influenced by the U.S. dollar, interest rates, and geopolitics, requires high expertise, which many insurers lack in terms of dedicated precious metals research teams and risk models. Third, while regulatory channels are open, strict internal control and stress testing requirements impose high compliance costs.
A deeper challenge is the need to bridge the professional capability gap. The former Insurance Asset Management Association of China, during a training session, stated that domestic insurance institutions are still in the early stages of gold investment and need continuous improvement in policy, products, risk management tools, and professional capacity. A China Gold Association representative also emphasized that insurers, as newcomers, must strengthen professional talent, enhance market research and analysis, and master trading strategies and risk management skills to ensure stable gold investment operations.
Notably, regulators have set clear, strict rules for this new venture. The notification mandates that the financial regulator supervises the pilot insurers' gold investments and can order corrections for violations, with serious cases leading to pilot资格 revocation. Supervision includes regular quarterly reports within five working days after each quarter, and ad-hoc reports within 10 working days for any non-compliance or major risk events, during which new gold investments are prohibited until requirements are met.
Despite short-term caution, gold's strategic value in insurance capital allocation is being reassessed long-term. Ping An Life stated that gold holds good investment value in the current global market environment and helps diversify risk and reduce portfolio volatility. The company has actively promoted gold business since the pilot began. Jiang Han views gold as having three core values: inflation hedging, safe-haven status, and low correlation with other assets, which can hedge tail risks in equities and bonds amid global monetary uncertainty and frequent geopolitical conflicts. Its lack of credit risk and high liquidity also align with insurers' need for high-quality liquid assets.
Historically, fixed-income assets like bank deposits and bonds dominated insurance capital allocation. The massive size of insurance funds demands long-term, stable returns. However, with persistently low market interest rates and frequent financial volatility, traditional investment channels offer compressed returns, making their risk-return profiles less ideal for insurers' asset growth needs. Thus, actively exploring new investment avenues to broaden capital utilization and enhance efficiency has become urgent.
Industry insiders believe the policy easing addresses a long-standing industry pain point. Gold was a missing piece in the traditional investment map. The regulator's move responds to insurers' urgent need for diversified, counter-cyclical assets, especially during simultaneous stock and bond market downturns, where gold's unique safe-haven qualities are seen as a strategic tool to hedge portfolio volatility and enhance operational resilience.
Some predict that gold investment limits for insurers may be relaxed in the future, potentially boosting gold's trading liquidity and promoting more balanced insurance capital allocation. Guo Shiliang suggested that insurers might gradually increase gold allocations. Current caution may relate to gold's historical high prices and reduced investment appeal. Gold carries significant risk, requiring both professional expertise and mature risk management strategies to control volatility. From an allocation perspective, gold can be part of a diversified portfolio, but with prices at highs, risks are elevated, likely leading to continued caution, possibly in preparation for the next bull market, as gold remains a viable long-term allocation component.