In recent years, major insurance companies have begun to invest in each other, creating a new dynamic of "competing in business while uniting in capital."
The insurance sector has recently witnessed a notable shift. Previously, industry leaders such as PING AN, China Life Insurance, China Pacific Insurance, and People's Insurance Company of China were direct competitors, fiercely vying for clients, comparing products, and battling for market share. However, over the past two years, these long-standing rivals have started to acquire stakes in one another, fostering a landscape where competition in operations coexists with capital collaboration.
This trend of cross-holdings has been gradually intensifying. The movement did not emerge abruptly but has followed a clear trajectory. Initial attempts date back to 2019, when China Life Insurance made a small investment in China Pacific Insurance's Hong Kong shares, serving as a preliminary test. At that time, with stable market interest rates, insurers primarily relied on government bonds and bank deposits for steady returns, reducing the need for large-scale investments in peers, so cross-holdings did not gain significant momentum.
A pivotal industry turning point occurred in August 2025. After a six-year hiatus, major insurers resumed substantial purchases of peers' stocks. PING AN Life Insurance took the lead, acquiring shares of China Pacific Insurance and China Life Insurance in Hong Kong, with both transactions meeting regulatory disclosure thresholds, officially igniting the wave of cross-holdings among insurance giants. By the end of that year, New China Life Insurance joined in, purchasing shares of People's Insurance Company of China through two main accounts, accumulating 159 million shares and securing a position among its major shareholders.
Entering 2026, this collaborative trend gained further momentum, with insurers listed in both A-shares and Hong Kong increasing their investments in peers. On March 25, 2026, PING AN again bought China Pacific Insurance's Hong Kong shares, investing approximately HK$101 million, raising its stake to 12.08%. Concurrently, PING AN continued to increase its holdings in China Life Insurance's Hong Kong shares; by May 14, its stake, including that of its subsidiaries, had risen from 13.81% to 14.03%. In the first quarter of 2026, New China Life Insurance further increased its holdings in People's Insurance Company of China, raising its total to 178 million shares, deepening the inter-company ties.
Crucially, the industry has moved beyond one-way investments to mutual holdings and reciprocal binding. In the first quarter of 2026, China Life Insurance consistently added to its holdings of PING AN's A-shares, accumulating 249 million shares, representing a 1.38% stake, and successfully entering PING AN's list of top ten shareholders. Thus, PING AN holds shares in China Life Insurance, and China Life Insurance holds shares in PING AN, achieving full capital interconnection between the two industry leaders.
Interestingly, in the first quarter of this year, while the overall insurance sector declined and many external institutions sold off and exited, major insurance companies instead increased their holdings against the trend, demonstrating confidence in the long-term prospects of their own industry with substantial capital.
The core driver behind this wave of cross-holdings is the dual challenge of "difficulty in earning and investing money" faced by insurers. Currently, the scale of insurance funds nationwide approaches 40 trillion yuan, a massive volume. These funds primarily consist of long-term premiums from the public and must generate stable returns to cover future claims and operational costs, with no room for risky losses.
However, in recent years, persistently low market interest rates have narrowed traditional revenue streams for insurers. Products like government bonds, bank time deposits, and high-quality corporate bonds, once reliable sources of steady income, now offer diminishing returns, insufficient to meet insurers' profitability needs.
The market currently suffers from a scarcity of safe, reliable, and stable-yielding quality assets, often referred to as "asset shortage." Vast insurance funds urgently seek new investment avenues, and the stocks of peers, which are low-priced and offer stable dividends, have become the most suitable choice.
Moreover, insurers investing in peers possess inherent advantages. Being in the same industry, they have a clear understanding of each other's operations, profitability, and sector risks, reducing the likelihood of misjudging market conditions or encountering investment pitfalls, thereby lowering risk.
From a cost-benefit perspective, the stock prices of major listed insurers are currently at multi-year lows, with limited downside potential and high safety. In 2025, the top five insurers distributed over 100 billion yuan in total dividends, with Hong Kong-listed insurance stocks offering dividend yields far exceeding those of ordinary government bonds, providing both capital preservation and stable income. Additionally, regulatory easing on insurance fund investments in equities has further encouraged insurers to invest in peers.
While opportunities abound, risks cannot be overlooked. With deep inter-company ties, interests become fully intertwined, easily leading to a scenario of "shared prosperity and shared adversity." If the entire industry faces downward pressure, risks could quickly spread among companies.
Furthermore, some insurers hold exceptionally large stakes in peers, potentially facing liquidity issues or difficulty selling shares when urgent funding needs arise. Additionally, increasing shareholding ratios may lead to more related-party transactions and impact independent decision-making, necessitating ongoing regulatory oversight.
In summary, the transformation of insurance giants from competitors to shareholders is an inevitable response to the low-interest-rate environment and a practical approach for insurers to optimize investments and address profitability challenges.
In the short term, peer stocks with high dividends and low risk remain a core allocation for insurance funds, and the trend of cross-holdings is likely to continue.
Long-term, this capital collaboration within the industry is steering the insurance sector away from low-end internal competition toward a new phase of cooperative growth and stable development.
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