AsianInvestor’s second annual Institutional Excellence Awards were introduced to highlight best practice, with awards handed out in 16 institutions collectively managing $3.5 trillion.

In our second award in the markets category, for mainland China, our judges selected China Life Insurance for institutional excellence. Inexperience in global financial markets is a challenge for all Chinese insurers, and in that sense China Life is serving as a role model, having quickly evaluated the changing regulatory environment to partner best expertise in reaching overseas.

The winners were announced on October 30 and received their awards at an exclusive ceremony and dinner on December 2 at The South Beach hotel in Singapore. 

We thank all those who contributed their thoughts to these awards. The full list of write-ups appears in the December issue of AsianInvestor magazine, and more details of our decision-making process can be found here.

Markets category
Mainland China
China Life Insurance

In AsianInvestor’s view, China Life has been quickest to evaluate what changes in the regulatory environment have meant in terms of moving money offshore. What it has emphasised is how it is open-minded in trying to partner and gain best expertise.

Managing $331 billion in assets, China Life is the largest life insurer in the country and wields considerable influence. It was the first in the domestic industry to hire external managers for its global equities and multi-assets mandates by request-for-proposals (RFP). It outsourced the first batch of eight overseas mandates this January and is proceeding to hire a second batch of overseas managers.

Its approach to diversify its asset allocation while working within the market limitations imposed on it singles it out.

Chinese insurers are looking for assets that can generate long-term stable income, a job made that much harder due to China’s immature, semi-open capital markets and volatile equity market. In other words, they have to be innovative to work within the rules.

While most of its overseas alternatives are in real estate, combined with equity and bond investments listed in Hong Kong and Singapore via its Hong Kong joint venture with Franklin Templeton, it is now moving further afield. Global asset managers report that other Chinese insurers are asking to replicate what China Life is doing.

Domestically, too, it has expanded its onshore alternative assets including property, infrastructure and private equity via the group’s affiliated alternatives platform China Life Investment.

It has targeted Rmb150 billion ($23.5 billion) in mandates this year, to be expanded up to Rmb250 billion by mid-2017. Such moves are tipped to augur a long-term trend.

Given that Chinese insurers’ assets under management have grown nearly 20% annually over the past five years, their greatest challenge now is inexperience in global financial markets.

As such China Life can be seen as a role model. It is the newest actor on the stage trying to do something different and is the one peers are trying to copy. To do what it has been doing in the environment it has been working in, that’s impressive.

2015 winners already unveiled:

Institutional category

Reserves manager: Monetary Authority of Singapore

Sovereign wealth fund: GIC

Insurance company (general account): Ping An Life  

Public pension fund: Bureau of Labor Funds

Private pension fund 2015: Jardine Matheson

Endowment: National University of Singapore

Markets category

Australia/New Zealand: the Future Fund