China is considering the sale of hundreds ‍of billions of ‍yuan in special government bonds to recapitalise some of its largest insurers, ​Bloomberg News reported on Friday citing people familiar with the matter, strengthening the biggest players in a sector ⁠facing consolidation pressures.

The potential bond sale would raise about 200 billion yuan ($28.8 billion) to help recapitalise ⁠the insurers, ‌the report said, adding that the proceeds will be injected into state-controlled firms including China Life Insurance Group Co. , the People's Insurance Co Group of ⁠China Ltd (PICC) , and China Taiping Insurance Group Co.

China Life Insurance, PICC and China Taiping Insurance did not immediately reply to a Reuters request for comment.

Reuters could not immediately verify the report.

The capital injection could be announced as early as this quarter, one ⁠of the people said, according ​to the report.

It would mark the first time China has used special bonds to support insurers, extending a financing ‍tool previously reserved for state-owned banks.

The National Financial Regulatory Administration did not immediately reply to a Reuters request for ​comment.

The initiative could help bolster insurers that were directed to support the stock market during last year's volatility, while positioning them to help regulators manage smaller, higher-risk insurance companies.

In January last year, China unveiled plans to channel hundreds of billions of yuan in investment from state-owned insurers into shares to support the stock market.

Insurance companies' equity investments as a proportion of their total investment assets rose to 10.03% in the third quarter of 2025 from 7.51% in 2022, according to estimates from China Securities.

The potential recapitalization also comes as the insurance sector grapples with eroding ⁠profitability due to persistently low interest rates, with numerous small ‌and mid-sized insurers reporting deteriorating solvency ratios in the third quarter last year.

Last year, China's finance ministry unveiled a recapitalisation plan of around $72 billion to boost big state banks' core capital, a ‌move aimed ⁠at helping lenders manage lower profit margins and asset-quality strains.

($1 = 6.9485 Chinese yuan)

(Reporting by Disha Mishra in ⁠Bengaluru, Ziyi Tang in Beijing; Editing by Jacqueline Wong and Thomas Derpinghaus)