Insurers' Investment Channels Diversified

 

Tuesday, Oct 20,2009, 8:27:03 PM   Click:

Insurers capital utilization in China for investment is expected to approximately CNY 1.1 trillion this year and became a focal point through which channels they will achieve the goal.

In order to diversify their investment channels, the China Insurance Regulatory Commission (CIRC), China's top regulator of insurance, has published a list of policies this year. And with the policies they are supposed to invest CNY 1.56 trillion. They in March this year are allowed to invest in debentures and the capital outstanding, they are allowed to invest in this area should take into account not more than 15 percent of their assets at the end of last quarter.

A month later, they are allowed to inject into the infrastructure and scale for life insurers and property insurers to invest in their assets at the end of the quarter was six per cent and four per cent respectively. In addition, the proportion of capital they use for investment of corporate bonds to their total assets has been recently increased to 40 percent from 30 percent previously.

Moreover, they are permitted to invest in shares in unlisted domestic companies and related rules are said to be released soon. The proportion of capital they are allowed to invest in their total assets will be increased to ten per cent of eight per cent previously, revealed sources close to the CIRC. And the proportions of debt and equity are six per cent and four per cent, compared to five per cent previously, and three per cent each. Insurance assets of the nation totaled CNY 3.71 trillion as at the end of June 2009, that is to say 371 billion of it will be allowed to invest in shares in unlisted domestic companies.

Besides, they are permitted to invest in real estate. Related Rules were not disclosed, but industry observers predict that at least five percent of total assets of insurers will be allowed to inject into the deposit. In this case, they should invest CNY 186 billion in real estate. According to the IARC rules, they are allowed to acquire office buildings and investing in affordable homes, nursing institutions, commercial properties and etc. The goal for them to reach is extended to the field to win the stable location, so they are not allowed to be engaged in real estate directly.