Recent developments have emerged in the bond issuance activities of insurance companies.
On June 18th, New China Life Insurance Co., Ltd. announced that it had received approvals from the National Financial Regulatory Administration and the People's Bank of China. The company is now authorized to publicly issue up to 10 billion yuan in perpetual capital bonds (commonly referred to as "perpetual bonds") on the national interbank bond market.
Key Issuance Statistics
Statistics reveal that since the beginning of the year, 14 insurance companies have collectively issued bonds totaling 32.07 billion yuan. Of this amount, perpetual bonds account for 19.34 billion yuan, representing 60.3% of the total, while capital replenishment bonds make up 12.73 billion yuan, constituting 39.7%.
Phased Concentration of Issuance
The pace of bond issuance by insurers has notably accelerated entering June. As of June 23rd, seven insurance companies have issued bonds to replenish capital, with a cumulative amount reaching 12 billion yuan.
On June 4th, Sino-Dutch Life Insurance Company Limited issued 1.24 billion yuan in perpetual bonds with a coupon rate of 2.05%. CITIC-Prudential Life Insurance Company Limited followed on June 5th, issuing 4 billion yuan in perpetual bonds at a 2.08% coupon rate. On June 10th, TFG Global Life Insurance Co., Ltd. issued 1 billion yuan in capital replenishment bonds with a coupon of 2.65%. Between June 16th and 18th, Aviva-COFCO Life Insurance Co., Ltd., Hengqin Life Insurance Co., Ltd., CMB-Cigna Life Insurance Co., Ltd., and Minsheng Life Insurance Co., Ltd. issued bonds of 500 million yuan, 660 million yuan, 3.1 billion yuan, and 1.5 billion yuan respectively, with coupon rates ranging from 2.08% to 2.98%.
Additionally, in March, five insurers including Taikang Pension & Insurance Co., Ltd., China United Life Insurance Co., Ltd., Sunshine Life Insurance Co., Ltd., China Post Life Insurance Co., Ltd., and China United Property Insurance Company Limited issued bonds, raising a cumulative 11.07 billion yuan.
Why does insurance company bond issuance exhibit this phased concentration, particularly around quarter-ends? Chen Hui, Director of the China Actuarial Science and Technology Laboratory at the Central University of Finance and Economics, analyzes that the core reason stems from the cyclical nature of regulatory assessments. On one hand, insurers must meet quarterly solvency adequacy ratio assessments at quarter-end, with some facing pressure on core capital, necessitating rapid capital replenishment through bond issuance. On the other hand, banks' credit quotas and fund arrangements at quarter-end are more aligned with bond underwriting. Coupled with capital consumption from insurers' quarterly operational settlements, dividend distributions, and reserve provisions, these supply and demand factors jointly drive the concentration of issuance activity at quarter-ends.
Refinancing Strategy: Redeeming Old, Issuing New
In a low-interest-rate environment, an increasing number of insurers are opting to redeem older, high-coupon bonds issued in earlier years and simultaneously issue new, lower-interest bonds as replacements. This "redeeming old to issue new" strategy has become a rational choice for insurers to optimize their debt structure and reduce financing costs.
In October 2025, Hengqin Life Insurance Co., Ltd. announced it would exercise the redemption right on its 1.1 billion yuan capital replenishment bonds issued in 2020, which carried a coupon rate of 5.5%. In June of this year, the company newly issued 660 million yuan in capital replenishment bonds with a coupon rate of 2.98%, representing a significant decrease compared to the rate on its earlier bonds.
This is not an isolated case. In January this year, Great Wall Life Insurance Co., Ltd. received approval to issue up to 1 billion yuan in capital replenishment bonds, completing the issuance in February with a coupon rate of 2.54%. Previously, Great Wall Life had successively redeemed two batches of capital replenishment bonds issued in 2021, totaling 1 billion yuan, with old bond coupon rates of 5.5% and 5.0% respectively.
A representative from Great Wall Life stated that facing the capital and operational constraints brought by the full implementation of the second phase of the China Risk-Oriented Solvency System (C-ROSS) and new accounting standards, along with pressures from low interest rates and duration matching, the company is replenishing capital through the "redeem old, issue new" method. The goals are to stabilize solvency, optimize the capital structure, lower comprehensive financing costs, provide more solid capital support for advancing the company's "Fifth Five-Year Strategy," and enhance financial flexibility and risk resilience.
Chen Hui noted that the low-interest-rate environment is the core catalyst triggering insurers' "redeem old, issue new" actions. Redeeming high-interest old bonds and issuing new low-interest bonds can significantly reduce long-term interest expenses and optimize liability costs. Beyond this strategy, insurers can simultaneously optimize their debt maturity structure to better match long-duration insurance liabilities, thereby revitalizing existing debt while improving the overall capital-liability structure and enhancing operational efficiency.
Multiple Factors Driving Bond Issuance Demand
Generally speaking, external methods for insurers to supplement capital include, besides bond issuance, capital increases through share issuance and introducing strategic investors.
Compared to the "bond issuance boom," the pace of capital increases for insurers within the year has slowed. According to disclosures by the Insurance Association of China, five insurers have announced capital increase plans this year, intending to raise 4.3 billion yuan, a significant year-on-year decline.
Industry experts believe that against the backdrop of slowing economic growth, investors have become more cautious about the insurance industry's long return cycles. Small and medium-sized insurers often lack sufficient internal "blood-making" capability, and external shareholders show weak willingness to provide additional investment. The difficulty for insurers in finding suitable external capital increase partners has risen, making bond issuance a mainstream channel for capital replenishment.
The implementation of the second phase of C-ROSS and the adoption of new accounting standards have also spurred insurers' demand for bond issuance. According to a Dagong Global Credit Research report, the conclusion of the transition period for the second phase of C-ROSS imposes stricter requirements on insurers regarding capital quality and risk management. In this context, insurers are issuing bonds to supplement capital, particularly core tier-2 capital, to maintain stable solvency adequacy ratios. Furthermore, the implementation of new accounting standards has further generated capital replenishment needs for insurers.
For instance, when issuing 3.1 billion yuan in perpetual bonds, CMB-Cigna Life Insurance Co., Ltd. stated that the funds raised from this bond issuance would be used, in accordance with applicable laws and regulatory approvals, to supplement the issuer's core tier-2 capital, improve its solvency, and create conditions for the healthy development of its business.
Looking back, the scale of bond issuance in the insurance industry has exceeded the 100-billion-yuan mark for three consecutive years. Data shows the industry issued 112.17 billion yuan in capital replenishment instruments in 2023, which increased to 117.5 billion yuan in 2024. Although there was a slight dip in 2025, the amount still reached 104.2 billion yuan. Looking ahead to 2026, will this scale of issuance continue?
Chen Hui analyzes that while issuance volumes may experience minor fluctuations at individual points in time, a structural capital gap persists industry-wide in the long term. It is anticipated that the annual issuance volume will remain within the range of around 100 billion yuan. However, constrained by the scale of net assets, the likelihood of a further significant increase in issuance volume is not high.
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