The country insurers' offshore asset allocations will likely remain much lower than the regulatory limit of 15% this year, despite their need to locate higher levels of return.
Insurers from the country face increasing risks in the local equity market, but they may have to take them with fixed income returns set to diminish further due to a lower interest rate.
Moody’s and Fitch Ratings say that emerging market defaults are increasingly likely to hit record highs, with Asia-Pacific corporates looking particularly vulnerable.
Japanese life insurers are well-suited to weather long-term global turbulence as the coronavirus spreads, but certain investment strategies might turn sour, say rating agencies.
Korean securities companies will continue to supply domestic asset owners with new overseas alternative investments, but they are taking increasingly higher risks in the process.
High prices, strict capital controls, renminbi weakening and over-supply concerns are all cited as factors hurting offshore flows into mainland commercial real estate.