Regional life insurers could benefit from investing in derivatives and alternative assets, but they will also need to enhance governance and credit oversight.
A mixture of low bond yields, interest rate cuts and insurers avoiding risky assets will lower returns, though A-share volatility will have a limited impact, say credit analysts.
But they may be less sure about the investments they will be able to make after the regulator updated the asset-liability management framework last week.
China's insurance firms are having to adapt quickly as their domestic watchdog pushes for large-scale reforms on several fronts.
The insurer’s Hong Kong head of asset-liability management has left as fund houses look to boost their actuarial and solutions expertise in Asia.
Mainland insurance firms hold high cash allocations to help them manage short-term savings products – but this may be storing up trouble, says rating agency Moody’s.