The Chinese regulator wants firms to strengthen returns on their $321 billion of assets while spreading risks after the nation's CSI 300 Index more than doubled this year, causing concerns of a stock bubble. As of yet, overseas investment by Chinese insurers has been lukewarm, with companies having only invested 0.7 percent of assets as of end-June, according to the regulator.
“In the short run, diversifying overseas might not be the first priority for insurance companies'' since the local currency is appreciating, said Bob Leung, a Citigroup analyst in Hong Kong.
Shares of China Life Insurance Co. and Ping An Insurance Co. have still rallied since June 1, when the regulator first announced that rules allowing additional investment abroad would be forthcoming within two months. Investing in real estate and other areas abroad may help "Chinese carriers secure the recurring yields they seek," Leung said.