China's insurance firms have show strong interest in buying into securities investment fund, a new investment tool granted to them by the government earlier this week.

An announcement October 31 by the Tongsheng Securities Investment Fund said that 11 insurance firms bought 900 million units of the fund, out of a total of three billion units.

The China Life Insurance Corporation and the Ping'an Insurance Corporation bought 300 million units each, and the China Reinsurance Corporation 100 million units. The remaining 200 million units were shared by the New China Life Insurance Corporation and seven others.

Tongsheng is the first securities investment fund to be invested in by insurance firms after it formally went on offer October 28.

Along with buying into newly issued securities investment funds, insurance firms also got the green light to buy into such funds on the secondary market.

Analysts say that allowing insurers to invest in the securities market is of great significance, as it can provide insurers a new investment channel at a time when the interest rate is very low.

This move will also increase the capital supply in China's securities market, which needs more institutional investors such as insurance firms to keep it stable and growing.