Overview
The Beijing financial regulator recently approved three rulings: Great Wall Life may publicly issue up to 3.5 billion yuan of capital-supplement bonds; Beijing Life may issue up to 0.6 billion yuan of perpetual bonds; and Huatai Life may increase registered capital by 0.97 billion yuan. As core capital comes under pressure and bond rates fall, insurers are rushing to “replenish blood” via debt and capital injections.
By September 16, 16 insurers had issued 10 perpetual bonds and 9 capital-supplement bonds this year, totaling 52.51 billion yuan, with perpetual coupon rates now in the “1% range.” Another 10 insurers, including Huatai Life, boosted capital via registered-capital increases.
Background & Interpretation
1. Regulatory and Industry Context
Since the “C-ROSS” (偿二代) Phase II project began in 2022, insurers have continuously issued debt or raised capital. This year the Phase II transition period formally ended and the industry fully adopted new accounting standards, pressuring some insurers’ core capital. NFRA data show that at end-Q2, the average comprehensive solvency ratio was 180.6% and core ratio 133.5%—still above the 100%/50% regulatory floors.
2. Core Drivers and Underlying Mechanism
The urgency stems from marginally weakening solvency. Under the Insurance Company Solvency Management Rules, insurers with core ratio below 60% or comprehensive ratio below 120% become key review targets. Great Wall Life’s core ratio fell from 117.72% at end-2025 to 81.83% in Q1 and edged up to 89.28% in Q2—still far below the sector mean; Beijing Life’s Q2 core ratio was 89.49%, with some players close to the review line.
3. Market Structure and Industry Chain Effects
In a rate-down cycle, perpetual and capital-supplement bonds are the main tools to ease capital pressure; perpetuals countable into core capital are especially favored. For the bond market, insurer “refueling” supplies high-quality credit; for reinsurers and intermediaries, tighter capital constraints force business-structure optimization. Divergence is widening: well-capitalized leaders capture allocation windows while smaller insurers are constrained by funding channels.
Implications & Outlook
Near term, with issuance costs at historic lows in a low-rate environment, capital replenishment should continue. The medium-term variables are equity-market performance and rate trends, both directly affecting solvency and investment income. Penetrating oversight of key-review targets will push the industry from “scale expansion” to “capital intensity.”
Takeaways for Industry Participants
Insurers should plan capital-instrument combinations ahead, balancing perpetuals, supplement bonds, and equity injections; investors in insurer capital bonds must analyze solvency trends and underlying asset quality. For policyholders, the capital soundness of leading insurers remains a key reference for policy safety.
This column compiles industry information and shares technical perspectives; it does not constitute investment advice.