Insurance Funds' Trust Plan Holdings Fall to About RMB800 Billion by End-2025, Fifth Year of Contraction

Insurance funds' trust plan holdings continued to decline, with the latest data falling below RMB1 trillion for the first time since 2017. Survey figures show that as of end-2025, the outstanding scale of trust plans allocated by insurance funds fell to about RMB800 billion, down over 20% year-on-year. This accounted for roughly 2.3% of surveyed insurers' investment assets, down more than one percentage point from end-2024. In 2021, insurance trust plan holdings posted their first negative growth, extending to five consecutive years of contraction by 2025.

Historical data shows the scale peaked at RMB1.65 trillion at end-2020. Since investment in trust plans was liberalised in 2012, the figure grew rapidly from under RMB30 billion, exceeding RMB1 trillion in 2017. After regulators guided reductions in financing-type trusts in 2020, insurers' trust investments declined gradually, falling to RMB1.4 trillion at end-2021, down over 14% year-on-year. The scale continued to edge lower from 2022 to 2024, ending 2024 slightly above RMB1 trillion. After five years of decline, the current scale is less than half of the peak.

Turning to new investments, the scale of cooperation between insurers and trust plans has narrowed markedly. New investment mainly targets infrastructure projects; real estate lending, previously a large share, has essentially stalled, while corporate working capital lending has contracted sharply. Some insurers currently have allocation gaps in trust plans, with most activity centred on disposing of maturing existing business. Under the new "three categories" business rules and other regulatory guidance, trust companies have shifted towards asset service trusts and asset management trusts combining standard and non-standard products; service trusts, a development priority, basically do not involve insurance fund investment.

Factors behind the decline include regulatory reductions in financing-type trust quotas, which have cut trust product supply and left fewer quality projects meeting insurers' risk control standards; and earlier defaults on real estate trusts, making insurers more cautious and reducing new investment. From the insurers' perspective, low interest rates have driven continued adjustment of overall asset allocation, with increased weighting in long-duration bonds and equities while trimming traditional non-standard fixed income assets. This trend extends beyond trust plans: debt investment plans issued by insurance asset management companies have also declined, linked to shrinking financing demand in traditional sectors, as real estate and infrastructure enter adjustment cycles with markedly reduced financing.

Beyond insurers placing funds in trust plans as investors, the two sides still intersect in other business areas. In asset securitisation, trusts and insurance funds or insurance asset managers play distinct roles at different stages; trusts take on specific functions in some securitisation deals and also use securitised products for related activities. In technology finance, the trust and insurance industries can leverage their respective strengths to provide financial services to technology enterprises and support the growth of the technology sector.