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Insurers investment earnings up 160% in 1st half

(Xinhua)
Updated: 2007-07-25 15:01

Investment earnings of all China-based insurance firms hit 137.4 billion yuan (US$18.1 billion) in the first half, 160 percent up from the same period last year, according to the China Insurance Regulatory Commission (CIRC).

The insurers invested 11.76 percent of their 2.31 trillion yuan (US$305.1 billion) capital surplus in shares, including options, and 7.71 percent in mutual funds, Yuan Li, assistant chairman of the industry regulator, said on Tuesday.

Yuan said the firms invested another 77.82 percent in fixed income products, including 32.66 percent in bank deposits, 15.78 percent in national bonds, 19.82 percent in financial bonds and 9.56 percent in corporate bonds.

He gave no further details on the investment of the remaining 2.71 percent.

Yuan said the proportion of investment in shares and options increased during the past six months while that in bank savings and bonds declined, but he gave no details.

The CIRC raised the cap on investment in the domestic stock markets from five to 10 percent of their assets at the end of last year, but maintained the 20 percent investment ceiling on securities and mutual funds.

The move is widely believed to have focused the firms on more high earnings investment opportunities in the stock markets. Chinese share prices have soared around 60 percent since the beginning of the year on a 130-percent increase last year.

Yuan said the insurance industry had invested 19.7 billion yuan (US$2.6 billion) worth of foreign currencies in overseas markets by the end of June.

The CIRC was to unveil the revised regulation on insurers' overseas investment soon to balance and prevent their investment risks.

The State Council, China's cabinet, authorized insurers to invest overseas with their own foreign reserves in 2004 before allowing them to buy foreign reserves to invest overseas in 2006.

The total assets of the insurance industry reached 2.53 trillion yuan (US$334.1 billion) at the end of June, 20.2 percent higher than the same time the previous year, said the CIRC.


(For more biz stories, please visit Industry Updates)



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