Insurers raise diversified investments

Insurance companies in China have increased their non-traditional investment this year to seek higher returns after the regulator eased restrictions on investing, PricewaterhouseCoopers said in a report yesterday.

At the end of September, non-traditional investment took up 15.15 percent of the insurers' total investment of 7.41 trillion yuan, up from 9 percent at the end of last year.

"Although the current investment preference of insurance institutional investors was concentrated on certain type of products, their willingness to diversify investment is conductive to improving both the investment portfolio and investment returns," said Zhou Xing, PwC China insurance leader.

Non-traditional investment includes stakes in unlisted companies, real estate properties, trust, and financial derivatives, the report said.

The insurers raised their non-traditional investment after the China Insurance Regulatory Commission last year issued measures that included lowering capital requirement for private equity investment and widening financial and real estate investment options.

The CSRC's move aimed to compensate insurers' losses from the domestic stock market — among the world's worst performers in the past three years.

As of the end of October, the overall return of insurance investment funds was 4.16 percent, up from 3.39 percent in 2012, the CIRC said.

The PwC survey found 43.75 percent of the respondents plan to allocate 15 percent or more to non-traditional investment products, but only 18.75 percent are willing to channel over 20 percent to this area.