In recent years, the development of insurance asset management companies has been marked by rapid growth, particularly in the area of asset-backed plans, which are crucial for enhancing capital efficiency and meeting the diverse investment needs of insurance fundsAfter several years of flourishing, this segment is now transitioning into a phase of stable development, as evidenced by the latest reports highlighting a shift in focus and dynamics within the market.

According to statistics collected by Securities Times reporters from Zhongbao Dengdeng, the number of insurance asset management institutions registering asset-backed plans reached 19 in 2024, with a total of 103 plans registered that amassed a scale of approximately 418.68 billion yuanThis number indicates a consistent increase in product quantity; however, it also reflects a slight decrease in overall scale compared to previous years.

The asset-backed securities (ABS) market has evolved from its explosive growth phase into a more nuanced stage in recent years

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While the overall share of insurance asset management in the asset-backed plans segment remains relatively small, the role it plays is significantThe unique characteristics of these plans enable them to address both the needs for revitalizing existing assets and aligning insurance funds' asset-liability management strategies.

In 2024, insurance asset management firms registered asset-backed plans that evidenced substantial figuresThese plans constitute a type of asset securitization where insurance asset management entities act as trustees, creating funding instruments based on cash flows from underlying assets targeted at institutional investorsThe shift from a registration-based system to a registration format in September 2021 heralded a period of rapid expansion, marked by milestones — with over one trillion yuan in asset-backed plans for the first time in 2021, surpassing 3,000 billion yuan in 2022, and nearly reaching the 4,600 billion yuan mark in 2023.

Despite the overall growth in product numbers, 2024 saw this segment's scale retract for the first time, experiencing a decline of about 9% after years of remarkable growth that consistently exceeded 50% annually

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The registered products in 2024 included a diverse range of underlying assets such as factoring receivables, reverse factoring receivables, distressed asset restructuring, financial leases, microloans, infrastructure revenue rights, and trust claims.

Among the 19 institutions involved, four insurance asset management companies stood out with over 10 registered plans eachMinsheng Tonghui Asset Management led with 15 registrations, followed closely by Guoshou Investment with 14, while Everbright Yongming Asset and Dajia Asset recorded 13 and 12 respectivelyThis competitive landscape is mirrored in their mobilization of capital, with Everbright Yongming leading in registered scale at 73 billion yuan, followed by Dajia Asset at 66 billion yuan, while both Minsheng Tonghui and Guoshou Investment exceeded 50 billion yuan each.

Minsheng Tonghui has been particularly proactive in recognizing opportunities in the asset securitization business, having initiated projects as early as 2015. Their ventures into this domain included the issuance of the Minsheng Tonghui - Far East Leasing No

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1 Asset-Backed Plan, and the launch of the Minsheng Tonghui - Alibaba Financial No1 Project Asset-Backed Plan, showcasing their initiative and foresight in an evolving market.

Amidst this ongoing development, the insurance asset management sector has been invigorated by the untapped potential for invigorating existing assetsMany insurance asset management companies, especially those with assets exceeding one trillion yuan, have been making strides to fill this gap while simultaneously enhancing their securitization capabilities.

The eagerness to pursue asset securitization opportunities is driven by multiple factorsOn one side, these securitized solutions offer corporations alternative financing avenues beyond traditional methods, alleviating credit limitations and enhancing balance sheets through quality asset utilizationOn the other hand, securitization allows investors to gain exposure to diversified investment opportunities, facilitating risk dispersion and genuine support to the real economy.

The importance of revitalizing existing assets was echoed prominently at an institutional summit forum hosted by Securities Times at the end of November 2024. Senior executives from various insurance asset management firms highlighted the necessity of innovating within non-standard investment areas such as Real Estate Investment Trusts (REITs) and asset-backed securities (ABS). Guoshou Asset's Vice President Zhao Hui emphasized that the focus on alternative investments, particularly in sectors like technology and new productive forces, should be coupled with strategies aimed at leveraging existing assets effectively.

The insurance asset management landscape also welcomes new opportunities through Exchange ABS, which presents a more standardized approach to asset securitization

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By October 2023, five insurance asset management firms, including Guoshou Asset and Tai Kang Asset, had received approval to pilot Exchange ABS operations, a significant step forward in enhancing the tools available for effective asset deployment.

As of mid-January, these entities had submitted 11 ABS project applications to the Shanghai and Shenzhen exchanges, summing to a total filing size of approximately 19.44 billion yuanThis strategic move showcases the maturity of the insurance asset management industry in adapting to new frameworks and refining their investment strategies.

The growth trajectory of asset-backed plans also benefits from continuous regulatory reformsOver the years, enhanced regulatory frameworks have improved issuance efficiencies and solidified the positioning of asset-backed plans as crucial instruments for deploying insurance funds into the real economy

However, a comparative analysis reveals that the overall scale of insurance asset management's asset-backed plans still falls short against the broader securitization activities undertaken by trust and securities companies.

In the securities domain, the asset-backed securities market had sustained remarkable growth since the implementation of registration systems at the end of 2014. Data indicates that monthly new registrations of enterprise asset-backed securities have consistently exceeded hundreds, with cumulative registration volumes situated at thousands of billions in recent years, reflecting a significantly higher transactional volume compared to insurance asset management's sector.

As experts in the field observe, while insurance asset management's asset-backed plans have achieved a level of process and efficiency comparable to different ABS operations across sectors, they still categorize as private placement products under the non-standard category

This distinction underscores the inherent limitations given the primary investor base remains heavily aligned with insurance funds, evidenced by circumstances where companies' own insurance funds often absorb their issued plans.

Indeed, the asset-backed plans produced by insurance asset management institutions appear to be increasingly tailored to their characteristicsThey tend to engage in long-term investment initiatives, particularly in large-scale infrastructure projects, that offer stable cash flows and necessitate revitalization, presenting some advantages in the asset securitization landscape.

At the aforementioned forum, Zhao Hui pointed out that insurance asset management companies should embody the role of patient capital, especially in revitalizing existing assetsHe argued that extending the traditional short-term limits associated with ABS products would enhance prospects for long-term investment compatibility