Xinhua Finance Beijing on January 27 (Zhai Zhuo) as more than 20 trillion long-term funds, insurance capital “behavior preference” has been regarded as the equity market “vane”.But in 2021, the performance of insurance stocks seems to make holders quite “anxious”, shenwan insurance index fell 39% in the year, a new high in the past decade, ranked second in shenwan secondary industry decline list;In addition, the plate this year without a company to accept institutional research, attention decreased significantly, and the insurance capital’s own brand enthusiasm is also close to freezing point.Enter 2022, where will the insurance capital investment force, and whether the stock price “support” up?Industry insiders said that in the long end of steady interest rates, controllable real estate risks, policy dividend increase, equity market or will pick up in the background, the insurance sector is expected to gradually recover from the historical low valuation, stock prices are expected to bottom out.Looking back on 2021, Shenwan Insurance Index fell 39% in the whole year, second only to the education sector, with the biggest drop in nearly A decade. The total market value of the five listed insurance companies of A-share market “evaporated” more than one trillion yuan.At the same time, the heat of institutional research has also dropped significantly, Oriental wealth Choice data shows that no insurance company received institutional research throughout the year, compared with Mindray Medical, Transsion Holdings and other popular companies surveyed frequency of more than 2000 times, slightly embarrassing.So, in detail, how are companies’ investment returns?Take Ping An Of China as an example. In the first three quarters of 2021, dragged down by China Fortune debt crisis, the annualized total investment return rate of the company’s insurance fund portfolio was 3.7%, with a year-on-year decline of 1.5 percentage points.According to ping An’s semi-annual report, in the first half of 2021, the amount of impairment provision, valuation adjustment and other rights and interests adjustment of CFXF related investment assets amounted to 35.9 billion yuan, and the amount of after-tax impact on the attributable net profit reached 20.8 billion yuan.In addition, in the first three quarters of 2021, China Pacific Insurance, China Life Insurance and New China Life Insurance will see their annualized total investment returns of 5.3%, 5.25% and 6.4% respectively, with year-on-year changes of -0.2, -0.11 and +0.8 percentage points, except for the relevant data not disclosed by THE People’s Insurance Company of China.From the perspective of investment, some industry insiders said that listed insurance companies’ investment assets continued to be dominated by fixed income last year, accounting for about 70% to 80% of the total investment funds, among which the proportion of bank deposits kept falling, and the allocation of high-yield bonds was strengthened.According to CBRC data, by the end of December 2021, the balance of insurance funds in use was 23.23 trillion yuan.Among them, bank deposits reached 2,617.9 billion yuan, accounting for 11.27 percent, a new low since 2016.By the end of December 2021, the total balance of insurance capital allocated to stocks and securities investment funds was 2.95 trillion yuan, accounting for 12.70% of the total balance of insurance capital used, significantly lower than 13.8% at the end of 2020 and 13.2% at the end of 2019.Industry insiders said the main reason was that the operation of the equity market became more difficult last year, and insurance funds shrank their asset allocation ratio in order to reduce risk exposure.Under the “shrinking” of equity allocation, insurance capital also showed “flat interest” in listing companies with brand raising, with only one brand raising in 2021, a sharp contrast to the peak period of 36 times in 2015.In addition, according to statistics, from 2016 to 2020, the number of insurance capital listing companies were 11 times, 10 times, 10 times, 9 times and 23 times respectively.However, it is worth noting that since last year, insurance capital has gradually increased the allocation of alternative assets.Yu Wenjie, deputy general manager of Ping An Asset, said that insurance capital needs to increase investment in the next generation of infrastructure, expand the product form of alternative assets, and build a new pyramid of alternative asset allocation.In 2021, the five listed insurance companies of A-shares achieved A total original insurance premium income of 2,487.523 billion yuan, A slight increase of 0.03% year on year;As of December 31, the share prices of China Life insurance, Ping An Of China, China Pacific Insurance, PICC and Xinhua Insurance fell 20.46%, 40.82%, 28.92%, 28.38% and 30.87%, respectively, compared with the beginning of the year.Although the end of 2021 is embarrassing, but after entering 2022, the insurance sector “turned over” ushered in a good start.By the end of The 24th, the A-share insurance index (Shenwan Level 2) has risen 4.21% this year, with Ping An of China performing the best, up 5.40%.China Pacific Insurance and Xinhua Insurance followed, up 2.69 percent and 1.85 percent respectively.However, affected by the overall market downward, 25-27 insurance plate is also generally “floating green”.And in the stock price “off to a good start” behind, foreign institutions can be said to be “indispensable”.Since 2021, foreign investment has frequently increased insurance stocks.According to Dongcai Choice data, by the end of 2021, NORTHbound Capital’s holding of PICC increased by 91.31% compared with the beginning of the year;The number of shares in China Pacific Insurance increased by 38.53%, China Life Insurance increased by 17.94%, and Xinhua Insurance increased by 8.89%.As of January 24, foreign holdings of PICC, Xinhua Insurance, China Pacific Insurance, China Life Insurance and Ping An of China increased by 36%, 21%, 17%, 11% and 9%, respectively, compared with December 31, 2021.Looking ahead to the future, insiders said that in the long end of steady interest rates, controllable real estate risks, policy dividend increase, the equity market may pick up, the valuation of the insurance sector is expected to gradually rise from the historical low, stock prices are expected to bottom out and rebound.Specifically, first, the long end of the interest rate is expected to stabilize, fixed income investment returns will remain stable.Recent statements by central bank officials show that China’s overall inflation is under control, policy adjustments in developed economies have limited impact on China, and monetary policy will most likely remain prudent in 2022.Superposition vaccine accelerated popularization, epidemic gradually control, residents’ willingness to go out to consume increased, fixed asset investment continues to pick up, Everbright Securities analyst Wang Yifeng predicted that in 2022, the overall long-term interest rate will continue to rebound shock, fixed income insurance enterprises investment will remain stable.Second, the equity market is expected to pick up, and the investment ratio of insurance companies still has room to improve.Tao Shengyu of Orient Securities said that the current market trading is active, and the implementation of registration system is also constantly regulating the market development. It is expected that the capital market will have strong upward flexibility in 2022, which will help consolidate the investment performance of insurance companies.In addition, current policies continue to encourage insurance companies to increase the proportion of equity allocation and guide long-term funds into the market.At present, equity assets of listed insurance companies account for only about 10%-20% of the total investment portfolio, and the allocation ratio is still larger than the regulatory limit.Third, the impact of real estate credit risks is gradually cleared, and the overall risk exposure of all insurance companies is controllable.The financial team of CITIC Construction Investment group pointed out in the research report that recent policies have made positive noises, emphasizing that the real estate risks are controllable, the reasonable loan demand will be satisfied, the steady development of the industry is certain, and the industry policy repair is expected to continue to rise, which will further drive the confidence of the investment end of insurance companies to regain.According to its estimate, the current risk exposure of real estate risk is relatively limited.By the end of the first half of 2021, the real estate investment exposure of listed insurance companies is 5.2% of China Pacific Insurance, 4.9% of Ping An China, 4.8% of Xinhua Insurance, 3.6% of China Life Insurance and 3.1% of PICC. Fourth, the policy dividend continues to release, and insurance companies will gain more energy.Since the loosening of equity assets in the first half of last year, regulatory policies have emerged frequently recently, and investment channels for insurance companies have been further broadened.For example, on November 17, 2021, THE CBRC issued the Notice on Matters Related to The Public Offering of Infrastructure Securities Investment Fund by Insurance Capital Investment, allowing insurance funds to invest in infrastructure funds.On November 19, the Notice on adjusting the requirements for credit rating of bonds invested by insurance Funds and other relevant matters was implemented, relaxing the requirements for credit rating of bonds invested by insurance funds.On December 3 of the same year, CBRC issued a document allowing insurance funds to participate in securities lending business, enriching the way insurance funds are used.On December 17, the Circular on amending Some Normative documents on the Use of Insurance Funds was also issued, deleting the provision that a single fund can raise no more than 500 million yuan.After entering 2022, CBRC issued notice on Streamlining Regulatory Reports on The Use of Insurance Funds on January 19, canceling 34 regulatory reports.”The CBRC’s recent policy revisions have eased restrictions on the use of insurance funds in many ways and given insurance companies more autonomy in investment, which will help improve the investment efficiency and return performance of insurance funds.”Sun Ting, an analyst at Haitong Securities, expects that under the release of high frequency and strong policy dividends, insurance companies will get more energy to fight against the downward pressure of interest rates and liabilities.The “behavior preference” of insurance funds has been regarded as the “vane” of the equity market.Where will insurance funds be invested in 2022 when the global epidemic is still recurring and domestic economic downward pressure still remains?Cao Deyun, executive vice president and secretary general of Insurance Asset Management Association of China, said that in 2022, the allocation of insurance assets should first follow trends, including industrial trends, demographic trends and consumption trends.Second, we need to focus on growth areas such as the new economy, new infrastructure and new energy.Third, we should focus on the long-term. We should not only pay attention to the long-term nature of assets, but also pay attention to the stability of the counterparty and its own team.Specifically, in terms of the equity market, China Insurance Association and China Life Insurance recently jointly conducted A survey showed that 61% of the 33 insurance company executives surveyed believe that a-shares will fluctuate widely next year, and the three most optimistic themes are new energy, high-end equipment manufacturing and specialty special innovation.In addition, autonomous control, consumption upgrade, 5G application and other themes are also optimistic by some executives.TaoShengYu Orient securities analyst forecasts, for now, high dividends, low valuations, operation stable and suitable for long-term investment assets will be insurance companies focus on the object, is expected next all insurance companies will closely track the market changes, benchmark optimization strategy and the ownership structure, appropriate increase rights configuration, realize the excess return of low interest rates environment.With the continuous expansion of investment scope, pension has become one of the main forces of the equity market.Fang Jun, vice president of China Life Pension Insurance, pointed out that the current pension pension allocation of equity asset position is increasing, the market value of the asset allocation of the transition ratio is improving, next year should focus on grasping the structural market, increase the equity allocation dynamic adjustment efforts.It is worth mentioning that, with the gradual improvement of the economic situation, alternative assets and fixed income assets are also the main allocation direction of insurance funds.As mentioned in the report of The third quarter of 2021 by Ping An of China, the company continues to optimize the matching of assets and liabilities of insurance funds, actively allocates a large number of long-term assets such as national bonds and local government bonds, flexibly carries out equity investment operations, and gives full play to the advantages of the comprehensive financial platform to explore and increase high-quality alternative asset investment.Considering the policy environment, economic and market factors, the company will adhere to the existing insurance capital portfolio risk preference.In addition, recently China ping an investment line also appeared major personnel changes.Ping An Investment Co LTD (PING An) of China announced Monday that it has appointed Deng Bin as its chief investment officer (CIO). Chen Dexian, the former chief investment officer, will continue to serve as head of the group’s investment committee.Close to China Ping an market said that after the adjustment, the group’s asset allocation style will not change significantly.The new senior management and investment management structure composed of Deng Bin, Chen Dexian and chief risk Officer Zhang Xiaolu will be more conducive to the steady operation and risk control of Ping An Investment business in China.Statement: Xinhua Finance is a national financial information platform contracted by Xinhua News Agency.Under no circumstances does the information published on this platform constitute investment advice.