China regulator wants broader insurer investments

By Andrew Tjaardstra

The China Insurance Regulatory Commission is warning of a possible cash crunch in the industry. Chinese insurers need to diversiy their investments in a low investment return environment according to the CIRC. A combination of payments due and people giving up their policies could also prove problematic to Chinese insurers.

The chairman of the CIRC, Xiang Junbo, speaking at an insurance conference in Beijing this week: "We see many more difficulties in ensuring steady growth of the insurance industry this year due to a comparatively lower investmen return rate and the imminent peak of due payments on policies."

According to the China Daily the CIRC is worried about profitability at insurers and is helping insurers by promoting market-based reform of the launch of infrastructure and real estate debt projects.

Despite the overall market growing by over 8% in 2012, this was signifcantly less than the average of 20% over the last two decades. However, Swiss Re expects the market to recover to over 10% growth in 2013.