Guosen Securities released a research report stating that in terms of stocks, in the fourth quarter of 25, insurance funds have been continuously increasing their holdings for 7 consecutive quarters, but the rate of increase has slowed compared to the previous three quarters. In the fourth quarter of 25, insurance funds' holdings of stocks increased slightly by 0.1 percentage points to 10.1% compared to the third quarter of 25. They have been continuously increasing their allocation to stocks for 7 consecutive quarters, showing a continuous trend of increasing equity asset allocation. The estimated scale of increase in holdings reached 70.6 billion yuan. However, after the previous substantial and concentrated increases in allocation, the proportion of insurance equity assets has reached a historically high level, so in the fourth quarter of 25, insurance funds have slowed down their allocation and increase in holdings of stocks compared to the previous three quarters. The main points of Guosen Securities are as follows: Recently, the China Banking and Insurance Regulatory Commission disclosed the situation of insurance funds' investment balance in the fourth quarter of last year. In terms of major asset classes, in the fourth quarter of 25, insurance funds slightly increased their holdings of bonds and stocks, while the proportion of funds and long-term equities decreased. In the fourth quarter of 25, insurance funds increased their holdings of deposits, bonds, and stocks by +0.3%, +0.1%, and +0.1% respectively compared to the previous quarter, while the proportion of funds and long-term equities decreased by -0.2% and -0.3%, respectively. Regarding equity assets, the proportion of insurance funds' holdings of stocks and funds slightly decreased in the fourth quarter of 25, mainly due to a decrease in the size of funds held. The proportion of equity assets (stocks + funds) held by insurance funds decreased slightly from 15.49% in the third quarter of 25 to 15.38%. The size of stock holdings steadily increased, while the size of fund holdings decreased, reflecting a gradual shift in the way insurance funds participate in equity investments from outsourcing to direct investment. In terms of stocks, insurance funds have been continuously increasing their holdings for 7 consecutive quarters, but the rate of increase has slowed compared to the previous three quarters. In the fourth quarter of 25, insurance funds' holdings of stocks increased slightly by 0.1 percentage points to 10.1% compared to the third quarter of 25. They have been continuously increasing their allocation to stocks for 7 consecutive quarters, showing a continuous trend of increasing equity asset allocation. The estimated scale of increase in holdings reached 70.6 billion yuan. However, after the previous substantial and concentrated increases in allocation, the proportion of insurance equity assets has reached a historically high level, so in the fourth quarter of 25, insurance funds have slowed down their allocation and increase in holdings of stocks compared to the previous three quarters. Policy support combined with driven by the liability side, it is highly probable that insurance funds will continue to increase their allocation to equity assets in 2026, becoming one of the main drivers of market growth. Considering the characteristic of a strong start to insurance sales at the beginning of the year, the timing of insurance funds' increase in stock allocation throughout the year may be earlier. Based on the calculation of 30% of the new premium in 2026, insurance funds are expected to bring nearly 1.2 trillion yuan in additional funds to the market throughout the year. However, considering that the current market valuation levels have been rising for three consecutive years, insurance funds may allocate to undervalued assets on the left side of the valuation spectrum when increasing their allocation to stocks. In addition, looking at the distribution of new premiums, an average of 41% of new premiums have been concentrated in the first quarter since 2010. Considering the significant correlation between the growth in premiums and the scale of insurance funds entering the market, the beginning of the year is expected to be an important time window for insurance funds to allocate to equity assets throughout the year. Risk warning: Model calculation errors, policy measures lower than expected, fluctuations in the equity market, sharp increase in central interest rates, etc.