As an important wing of the strategy of expanding domestic demand, expanding effective investment is ushering in a new direction. "Two innovations and one emphasis" means new infrastructure, new urbanization and major projects involving the national economy and people's livelihood. As the starting point of people's livelihood to expand effective investment, it will not only significantly increase effective supply, but also face huge financing needs.

China Banking and Insurance Regulatory Commission data show that by the end of May this year, the balance of insurance funds reached 19.69 trillion yuan. In the face of huge insurance funds, the rationality of investment channels is directly related to the capital operation efficiency of the insurance industry. This time, China Banking and Insurance Regulatory Commission made it clear that it would increase financial support for "two new and one heavy", which also pointed out the direction for the investment of insurance funds.

1. Insurance funds and their application

Insurance funds refer to the capital, reserve fund, undistributed profits, various reserves and other funds of insurance group (holding) companies and insurance companies denominated in local and foreign currencies. Insurance funds are mainly used to protect the economic losses of the insured, and it is necessary to endow them with value preservation and appreciation to protect the rights and interests of the insured.

Insurance funds choose projects to invest and increase the value of funds, which is often called insurance fund investment or insurance fund utilization. The Measures for the Administration of the Use of Insurance Funds stipulates that the use of insurance funds must implement asset-liability management and comprehensive risk management according to the nature of insurance funds. According to the theory of asset-liability management, the use of insurance funds should try to achieve the matching of assets and liabilities in terms of scale and duration; According to the theory of comprehensive risk management, the use of insurance funds should adhere to the principles of prudence, safety and stability.

in terms of scale, the current balance of insurance funds is 2 trillion; From the term, the average duration of insurance funds is 13 years. Combined with the characteristics of low risk appetite and large long-term allocation demand, the use of insurance funds should be aimed at industries with stable future cash flow and income and needing huge medium and long-term funds.

2. Insurance Fund+Construction of "Two Innovations and One Heavy"

In "Two Innovations and One Heavy", "Two Innovations" refers to new infrastructure (including the construction of data centers, the increase of charging pile facilities, etc.) and new urbanization (including the development of public facilities in county towns and the renovation of old urban communities, etc.), while "One Heavy" includes major infrastructure projects such as transportation and water conservancy.

from the financing demand, the investment scale of the "two new and one heavy" project is large and long, which is in line with the term and scale of insurance funds. Therefore, the government's key support for the construction of "two new and one heavy" will bring new opportunities to the use of insurance funds.

from the financing benefit, the "two new and one heavy" project is a future-oriented construction facing the needs of high-quality economic development. The layout in the field of science and technology will create excess returns for a long time, and the deployment in the field of people's livelihood will also bring high-quality and stable returns, which is in line with the pursuit of long-term cash flow returns and absolute returns in the use of insurance funds. Therefore, participating in the "two new and one heavy" project will also provide a new opportunity for insurance funds to improve investment efficiency.

In fact, the former CIRC had already explicitly supported insurance funds to meet the financing needs of major projects (Guiding Opinions on Matters Related to Insurance Industry Supporting Major Projects, 215) and encouraged insurance funds to invest in major national projects (Notice on Further Strengthening Insurance Supervision and Maintaining the Stable and Healthy Development of Insurance Industry, 217). Therefore, this time, China Banking and Insurance Regulatory Commission clearly wants to increase financial support for "two new and one heavy", which is also an innovative development based on the existing deployment.

China Banking and Insurance Regulatory Commission has also made it clear that policy guidance should be strengthened, and policy support should be given to investment projects that conform to the national orientation in terms of investment scope and investment proportion. For example, in order to give full play to the supporting role of debt plan for infrastructure construction in areas with severe epidemic, China Insurance Asset Management Association has opened up a "green channel" for supporting the registration of debt plan against epidemic. This will also accelerate the activation of existing funds and help the insurance industry to support the "two new and one heavy" funds.

3. Give full play to the role of insurance funds and provide "flowing water at the source" for "two innovations and one heavy"

Investing in "two innovations and one heavy" insurance funds can effectively resist inflation and get considerable benefits, but the experience of China's insurance industry in investing in "two innovations and one heavy" projects is not mature enough. In the process of adhering to steady investment, prudent investment and long-term investment, it is especially necessary to guard against investment risks and risks.

in terms of investment forms, the administrative measures on the use of insurance funds stipulates that the use of insurance funds is limited to bank deposits, buying and selling securities, investing in real estate, investing in equity, etc. Previously, insurance funds invested in infrastructure construction mainly based on real estate investment, while insurance funds supported the "Belt and Road" construction mainly in the form of debt investment plan and equity investment plan. The "two new and one heavy" investment in insurance funds can take the form of credit bonds, non-standard and primary and secondary investments in the equity market. Of course, it is necessary to avoid risks while using it flexibly.

from the perspective of investment management, on the one hand, insurance institutions should follow the requirements of "centralized management, unified allocation and professional operation" and implement intensive and professional management of insurance funds; On the other hand, the regulatory authorities should keep up with the development and changes of the market, and strengthen the risk awareness of the use of insurance funds while implementing solvency supervision.

in a word, the huge investment demand bred by "two innovations and one heavy" will provide an investment opportunity for large-scale insurance funds, and the absolute income characteristics of the "two innovations and one heavy" project are in line with the goal of insurance funds utilization. And the risk management of insurance fund utilization is the core of the whole fund utilization. Therefore, improving the efficiency of fund utilization on the basis of controlling the risk of fund utilization is the proper meaning for insurance funds to support the construction of "two new and one heavy".