Mainland insurers started buying shares or equity funds in the fourth quarter of last year, as investment values emerged after a prolonged stock-market decline, the industry regulator said. The China Insurance Regulatory Commission said insurers had invested 412.3 billion yuan (HK$467.9 billion) in stocks and equity funds by the end of last month, accounting for 13.3 per cent of investment assets. Despite cutting their stock exposure from 14.2 per cent in September, insurers saw the market value of their equity holdings rise from 407.56 billion yuan. Bonds and bank deposits made up 84.4 per cent of assets at the end of last month, up from 82.1 per cent in September, the CIRC said. 'Since the Shanghai stock market actually dropped in the fourth quarter, the increase in the market value of equity holdings could be due to some stock purchases but to a lesser extent than deposits and bonds,' said Olive Xia, an analyst at Core Pacific-Yamaichi International. 'The stock market reached a low point in October. It is reasonable to think that mainland insurers have started to buy at low levels.' The benchmark Shanghai Composite Index lost about 16.23 per cent in the fourth quarter, contributing to a 65 per cent full-year drop that dragged down insurers' earnings. Liu Lefei, a former chief investment officer at China Life Insurance, said in September the firm would seize on the weak market to buy shares, particularly in financials. In October, the CIRC called on insurers to buy quality stocks to support growth in the capital market. Sources said then that the regulator had told insurers since early October not to cut their A-share holdings. Mainland insurers are allowed to directly invest 10 per cent of their assets in stocks, 15 per cent in mutual funds and another 15 per cent in overseas equities. The remainder is mainly in bonds or bank deposits.