Investment Limit Pressures China's Insurers

China's insurers are scouting for investment channels other than traditional areas after the China Insurance Regulatory Commission set a limit on investments, reports the China Daily.

 

The daily says the insurance regulator has stipulated that only 20% of an insurer's assets can be invested into stocks, equity funds and bonds.

 

"The increased pressure on asset allocation is due to the limited investment channels for insurers. But the regulators are unlikely to loosen the rules in the near term given the current volatility in the domestic capital markets," Hao Yansu, an insurance professor at the Central University of Finance and Economics, told the Daily.

 

The Daily notes that the loosening may bring some 10 billion yuan into China's stock market.

 

"The possible slowdown in auto sales and fixed-income investments as well as the removal of export tax rebates on some products will all directly impact the insurance demand in related industries," Wu Dingfu, chairman of CIRC says in a statement obtained by the Daily.

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