Major insurers cautious about this year's capital market

People ride bicycles past a branch of PICC in Nanjing, Jiangsu province, June 14, 2014. [Photo/IC]

Chinese major insurers will take a conservative approach in the capital market this year, given the rising fluctuation and growing risks.

"We will stick to our prudent investment approach this year to ensure our sufficient solvency ratio," said PICC Group's vice president Wang Xiaoqing.

The investment return of PICC Group reached a record high 7.3 percent since 2008, according to the company's annual report. That is contributed to a bullish stock market in the first half of 2015.

The investment situation of 2016, according to Wang, is much more severe than that of last year.

"The fragile equity market, low return of fixed-come securities and rising credit default risks all weigh on insurers," said Wang.

"For PICC, we will reduce investments in the equity market and choose more long-term investment in quality assets."

In 2015, PICC made a number of big deals, including a 19.99 percent stake purchase in Huaxia Bank and a stake investment in to Ant Financial.

"The fluctuation of this year's capital market has beaten our expectation. And we will be more defensive in our investment strategy this year," said Li Quan, president of New China Asset Management Corporation Limited. "We will patiently wait for appropriate investment opportunities."

New China Life Insurance Co's investment return hit 7.5 percent last year, up 1.7 percentage points than that of 2014, the company's annual report showed.