Mainland insurers should increase their overseas investment to counter declining yields of domestic assets, Ping An of China Asset Management (Hong Kong) Ltd. said.
The yield of a 10-year bond now stands below 3 percent, meaning long-term insurance policies can no longer yield as much as before, the Hong Kong Economic Journal reported on Monday, citing Nixon Mak Kim-ho, the company’s executive director and head of overseas investment.
The overseas investment arm of the country’s second largest insurer Ping An Insurance (Group) Co. of China Ltd. (02318.HK) is lowering its Hong Kong equity holdings, given their growing links with the mainland stock market under the Shanghai-Hong Kong Stock Connect, Mak said.
In the coming years, the China Insurance Regulatory Commission may raise the limit on overseas investment of insurance premiums, which is currently set at 15 percent, he said.
As of the end of September, Ping An holds an investment portfolio worth 1.61 trillion yuan (US$255.3 billion).
Only 1.44 percent, or US$23.96 billion, of the total insurance premium was invested overseas as of the end of last year.
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