Insurers focus on fixed-income niche

Chinese major listed insurers, also important players in the capital market, took a conservative approach to the market this year and hope to boost their overseas investment.

"Given the market fundamentals, we don't think there will an absolute strong bullish year. We take a conservative approach and will seize opportunities to increase investment in fixed-income products," said Zhao Lijun, vice president of China Life. "We found the valuation of some H-shares attractive and will increase our investment through Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Connect."

The world's largest life insurer in terms of market value increased its investment in bond by 2.08 percent to 45.63 percent last year and also increased its holding of stocks and funds by 0.71 percent to 10.05 percent, according to the company's annual financial report.

China Life's net investment return ratio stood at 4.61 percent last year, down 1.83 percentage points. And its overall investment return dropped 22.8 percent to 108.2 billion yuan ($15.6 billion), due to the fluctuating capital market, said the company's top management.

For Yu Xiaoping, vice president of PICC Group, this year's investment environment will see an improvement compared with last year, due to the better macro economy and bond investment return.

"We take a conservatively optimistic view of this year's capital market and will increase our overseas investment among the overall portfolio," said Yu.

PICC Group's investable assets reached 807.7 billion yuan by the end of last year, up 8.7 percent year on year, among which 56.3 percent were fixed income products Zwhile 16.4 percent were stocks and funds. Meanwhile, PICC's overseas investment accounted for up to 1.5 percent, lower than the industry's' average of 2 percent.

"So, we plan to boost our overseas investment through the Shanghai-HongKong Stock Connect and the Shenzhen-Hong Kong Connect. And our asset management in Hong Kong will play a bigger role in optimizing our overseas investment," said Yu.

Ping An Insurance (Group) Company, with a net investment return of 6 percent last year, will almost maintain its amount of investment in fixed-income products while betting on health, medical care, consumption and high-tech stocks.

Ping An's net profit jumped 15.1 percent year-on-year last year to 62.4 billion yuan. And its revenue grew 14.9 percent to 712.5 billion yuan, according to the company's financial report.

"In the medium and long run, we are optimistic about the stock market as the d-stocking campaign is close to an end the new round of consumption is emerging," said Chen Dexian, chief investment officer of Ping An.

Meanwhile, commercial properties and industrial logistics with a steady rental are priorities for Ping An's real estate investment, according to Chen.