China’s new regulation on insurance companies’ financial product investments could add pressure to industry in the short term, while plugging loopholes and bringing out hidden risk factors.
Shusi He
The Australian superannuation fund expects opportunities for currency trading as a result of the Chinese government rolling out measures to grow the economy.
Major lifers in China are dealing with increasing pressure over their asset allocation strategies and returns under a volatile capital market plus a new solvency regime domestically.
GIC doesn't insist on the most up-to-date ESG data before investing in a target, as long as it has the potential to improve how it measures its risks in the area.
Market volatility is likely to remain high as investors try to figure out the duration and severity of lockdowns. Stocks with attractive valuations may start to outperform in the second half of 2022.
For long-term investors, confidence in China will only return when visibility improves around the regulatory crackdown and Covid Zero policies.
Insurers such as Manulife, Prudential, and Allianz believe the influx of a large pool of assets can drive the long-term vitality of China's capital market.
Pension funds and life insurers are still cautious about US-listed Chinese firms and some of them are switching to onshore A-shares.
Fund managers are keeping an eye on how the Chinese government will rule on easing monetary policy, ending Covid lockdowns, and its relationship with Russia, while at the same time “bottom-fishing” for good deals in the world’s second-largest economy.
Lisle oversaw AIA’s business operations in Thailand, Vietnam, India and Sri Lanka and was also the group chief distribution officer since 2011.
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More exposure to risky assets, and better asset liability management and ESG practices are among the focuses of Chinese life insurance companies in 2022.
The Hong Kong life insurer will not blindly divest from non-ESG assets just to meet the emissions reduction target but will assess the impact of its investments holistically on the environment and social development.
