PING AN OF CHINA(HK:02318) Zhong Guo Zheng Quan Bao·2025-12-22 20:19Core Viewpoint - The insurance industry is accelerating its bond issuance as the year-end approaches, with total approved and issued bonds exceeding 100 billion yuan, maintaining a historical high level. This trend is driven by the need to enhance capital adequacy in light of the upcoming end of the transitional period for the second phase of solvency regulations [1][4]. Group 1: Bond Issuance Trends - As of December 22, the total amount of capital supplement bonds and perpetual bonds issued or approved for issuance by insurance companies has surpassed 100 billion yuan, with both types of bonds being issued in roughly equal amounts [1]. - Major insurance companies, including Ping An Life and CITIC Prudential Life, have received regulatory approval for significant bond issuances, indicating a robust market for insurance bonds [1][2]. Group 2: Types of Bonds - The primary types of bonds being issued are capital supplement bonds and perpetual bonds, with the latter gaining popularity among insurers this year, leading to a noticeable increase in issuance compared to previous years [2][3]. - Perpetual bonds, which do not have a fixed maturity date and can absorb losses under both ongoing and liquidation scenarios, are particularly favored as they can be counted towards core tier two capital [2][3]. Group 3: Regulatory Context - The transition period for the second phase of solvency regulations is set to end by the end of 2025, prompting insurers to bolster their capital to meet stricter regulatory requirements [3][4]. - Insurers are responding to the low interest rate environment and potential uncertainties in operations by increasing their bond issuance as a proactive measure to enhance their capital adequacy ratios [3][4].