Insurance capital has made another significant stake acquisition in 2026.
On January 12, Shanghai International Airport Co.,Ltd. (600009.SH) announced that China Pacific Insurance Asset Management increased its shareholding by 72.424 million shares through a block trade on the 9th, raising its stake to 5% and triggering a mandatory disclosure threshold. The funding source was insurance capital managed on behalf of CPIC Life Insurance. This marks the first publicly announced major stake purchase by insurance capital this year.
In fact, insurance capital has initiated a new wave of "stake acquisition fever" over the past two years. According to rough statistics, insurance companies made 41 major stake acquisitions in 2025, up from 20 in 2024, second only to the historical peak of 62 in 2015, hitting a ten-year high.
Huachuang Securities noted that compared to the stake acquisition wave driven by universal life insurance a decade ago, the current surge stems from increased focus on dividend stocks amid low interest rates while also being motivated by ROE considerations, incorporating high-quality targets through long-term equity investments. Looking ahead to 2026, these two demand drivers are expected to persist, suggesting the stake acquisition trend may continue.
What has fueled this new wave of stake acquisitions? Compared to the occasional stake acquisitions during 2021-2023, insurance capital has entered a new peak period starting nearly two years ago. Incomplete statistics show 20 major acquisitions by insurance capital in 2024, which surged further to 41 in 2025, second only to the 2015 peak and setting a new decade-high.
How does this wave differ from the historical peak a decade ago? The 2015 wave was primarily driven by universal life insurance expansion with high liability costs and capital savings from long-term equity investments under Solvency II. The drivers for the 2020 and 2024 waves include increased investment pressure on insurance capital amid declining interest rates, necessitating investment in high-dividend stocks for stable cash returns, while increasing long-term equity investments helps secure stable investment income, according to Li Jian, Chief Non-Bank Financial Analyst at Huatai Securities.
Specifically, synthesizing views from several industry analysts, on one hand, against the backdrop of persistently declining 10-year government bond yields and reduced attractiveness of traditional fixed-income assets, insurance capital is shifting focus to equity markets to optimize asset allocation and enhance investment returns. Concurrently, since 2023, hot sales of traditional insurance products, represented by increasing whole life insurance, have driven rapid premium growth, creating substantial asset-side allocation demand. Starting in 2025, participating insurance replaced traditional insurance as the new core product. The low-guarantee, high-volatility characteristic of participating insurance provides greater flexibility for equity investments.
On the other hand, the new accounting standards present a dilemma between returns and volatility for stock investments. Since 2023, listed insurers began implementing the new financial instrument standards, requiring stock assets to be classified as either FVTPL or FVOCI. Currently, listed insurers primarily classify stock investments as FVTPL, making stock market fluctuations significantly impact current net profit. Acquiring high-dividend stocks classified as FVOCI or configuring long-term equity investments helps reduce profit volatility, with this round of stake acquisitions reflecting the execution of this strategy.
Simultaneously, since 2020, regulators have repeatedly encouraged long-term capital market participation, implementing a series of policies over the past two years including lowering risk factors for stock investments, long-cycle assessment, and raising equity investment ceilings. Coupled with the capital market recovery trend starting in 2025, these factors have increased the attractiveness of stake acquisitions for insurers.
Which insurer made the most acquisitions? The "Ping An Group" made 15. According to rough statistics, the 41 stake acquisitions in 2025 involved 15 acquiring insurers and 28 target listed companies.
Huachuang Securities believes that unlike the stake acquisition wave led by Great Wall Life Insurance in 2023-2024, participants have become more diversified since 2025.
Among these 15 acquiring insurers, the "Ping An Group" dominated with 15 acquisitions. Its approach clearly involved "targeting objectives and repeatedly increasing holdings," as its 15 acquisitions targeted only 5 listed companies, all being financial stocks like bank and insurance shares. Ping An's preference for H-shares of bank stocks was particularly notable, acquiring stakes in China Merchants Bank H-shares and Agricultural Bank of China H-shares four times each during the year, increasing its stake to 20% of these banks' H-share capital. Ping An also acquired a stake in Postal Savings Bank H-shares three times, while contributing to the industry's first acquisition of stakes in China Taiping and China Life in six years.
"We have a 'three-feasibility' principle for investing in peers (insurance) or other industries: assessing whether a company's operations are reliable, growth is promising, and dividends are sustainable. This is our standard for deciding whether to hold a company's stock long-term and consistently," responded Guo Xiaotao, Ping An's Co-CEO and Deputy General Manager, during the company's August 2025 earnings conference regarding the stake acquisitions.
Besides Ping An, Great Wall Life Insurance and Ruizhong Life Insurance, major acquirers in 2024, made 4 and 3 acquisitions respectively in 2025. Compared to Ping An's repeated acquisitions of a few bank stocks, these two companies targeted more dispersed entities. However, Great Wall Life showed particular interest in utility stocks, with 3 of its 4 acquisitions being in this sector. Additionally, China Post Life Insurance and Hongkan Life Insurance each made 4 acquisitions in 2025.
Which stocks were most favored? Bank stocks were acquired 17 times. Due to Ping An's 11 acquisitions of bank stocks in 2025, bank stocks led with 17 acquisitions, accounting for 41.5% of the total 41 acquisitions. Besides bank stocks, utilities, insurance, healthcare, transportation, and other industries also saw frequent acquisitions.
The preference for bank stocks primarily stems from their high dividend characteristics, with high-dividend stocks being a major category in this stake acquisition wave.
Huachuang Securities believes that, considering the high ROE, high payout, and high dividend features of the acquisition targets, insurance capital's acquisition purposes mainly fall into two categories: high-dividend, high-payout stock investments and high-ROE equity investments. Stock investments classified as FVOCI can stably contribute dividend cash flow to enhance investment returns while insulating net profit from stock price volatility, essentially seeking "fixed-income-like" high-dividend targets as a hedge against declining interest rates. Examples include Ping An's acquisitions of major state-owned banks, Ruizhong Life's acquisition of China CITIC Bank, and Minsheng Life's acquisition of China Zheshang Bank.
According to Huatai Securities' earlier research, from 2024 to Q1 2025, the average dividend yield of the 20 acquired companies was about 5.0%, gradually increasing from 1.0% and 3.3% during the 2015 and 2020 waves, with most being Hong Kong stocks (17). "Hong Kong stocks have lower valuations and higher dividend yields, making high-dividend H-shares suitable for long-term holding as dividend stocks. If investment institutions buy H-shares via Stock Connect and hold them for over 12 months, the dividend income can be exempt from corresponding corporate income tax," Huatai Securities stated. Statistics show that among the 41 acquisitions in 2025, 35 involved H-shares, accounting for 85%. However, industry insiders note that unlike A-shares where the threshold is 5% of total share capital, reaching 5% of H-share circulating stock triggers disclosure in Hong Kong, making it relatively easier and contributing to the increase in H-share acquisitions.
Regarding equity investments, Huachuang Securities believes insurance capital's stock selection "aesthetics" focus on high-ROE assets, particularly favoring central state-owned enterprises, entities with certain industry monopoly positions, and targets with mature profit models. These are recorded as long-term equity investments using the equity method, significantly enhancing the acquiring insurer's own ROE, such as China Eastern Airlines Logistics (2024 ROE: 16%) and China Water Affairs (2024 ROE: 12%).
However, Li Jian also noted in the report that the most critical consideration for long-term equity investments is strategic synergy, not just stabilizing book investment performance. Additionally, long-term equity investments impose significant pressure on solvency; if book value long exceeds market price, impairment pressure may arise; these investments have weak liquidity and are difficult to exit, especially in regulated industries like banking, requiring careful consideration during investment.
The stake acquisition fever is expected to continue this year. "Looking ahead to 2026, the aforementioned two types of demand (dividend yield and ROE) are expected to remain relevant, suggesting the insurance capital stake acquisition wave may continue," stated the team led by Xu Kang, Head of Financial Industry Research at Huachuang Securities.
Synthesizing analyst views, the drivers for insurance capital's pursuit of high-quality equity assets include long-term interest rate declines pressuring equity assets to further enhance investment returns, and expected increased sales proportion of participating insurance potentially raising liability-side risk appetite. Furthermore, non-listed insurers will fully adopt the new accounting standards in 2026, likely continuing their listed peers' acquisition strategies. Meanwhile, policy "combination punches" guiding medium- to long-term capital into the market could provide more space for insurance capital's equity investments.
Regarding key equity investment targets for insurance capital, several large insurers adopt a "barbell strategy." Increasing allocation to high-dividend stocks using the FVOCI measurement model remains crucial, serving as a "safety cushion" for equity investments to hedge against low interest rates' downward pressure on net investment yields. Growth stocks representing new quality productive forces are important areas for insurers seeking excess returns in equity investments.
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