Insurers should be able to allocate assets more quickly, especially given current levels of uncertainty, heard AsianInvestor’s insurance forum yesterday.
The equity trading link will go live on December 5, with Chinese insurance firms expected to boost flows into Hong Kong and hedge funds showing interest in Shenzhen stocks.
Insurers in the region are eyeing more tactical asset allocation and increasingly using ETFs to that end, finds BlackRock research. They are also targeting illiquids, above all private equity.
AIA's China CIO expects mainland insurers to pour up to Rmb200 billion into Hong Kong equities, after the regulator said it would not view Stock Connect investments as foreign allocations.
Hong Kong-listed exchange-traded funds should prove attractive to mainland insurance firms looking to boost their overseas exposure, says Tobias Bland, CEO of fund house EIP.
Mainland insurers' returns fell in the first half, even as their assets grew, with alternatives now accounting for a third of AUM. Foreign asset managers may need to adapt their approach accordingly.