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Insurers may gain from wider selection

(Shanghai Daily)

13:45, June 15, 2012

Chinese insurers may benefit from a possible widening of investment options that include 13 more financial products, analysts said.

The insurance regulator may allow insurers to invest in derivatives, asset-backed securities, bank wealth management products and trusts, Guosen Securities said in a report yesterday.

Insurers may also be allowed to conduct margin trading and short selling of securities, and the quota insurers are allowed to invest in private equities may double from 5 percent to 10 percent of a company's total investment, the report said, citing a document that the China Insurance Regulatory Commission circulated for feedback.

"The expansion of investment options will help insurers counter interest rate risks," the report said. "The rules will boost insurers' competitiveness in asset management."

Jia Jinsheng, an analyst with Huatai Securities, said the broadening of the investment range has included almost all the "imaginable investment options," and will "greatly increase the stability and sustainability of insurance capital."

The document issued after the CIRC said early this month that it would "soon" release 10 detailed plans on widening investment options in bonds, property, infrastructure and overseas assets for insurers.

The CIRC last month allowed insurance firms to buy exchange-traded corporate bonds that are unsecured, as well as non-financial company debt and unsecured convertible debt issued by commercial banks.

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