Insurance giants China Life and People's Insurance Company of China are among the parties backing a new company China SME Development Fund Co.
Chinese life insurers have been the most progressive in establishing alternative investments as a viable asset class, compared to their Asian counterparts, says Moody's Investors Service.
China has raised the asset-to-equity ratio for the country's most solvent insurers by 50%, to try to get them to invest more funds in the capital markets. But analysts warn that the move would not necessarily mean more investments in equities.
The CBIRC's new rule to loosen restrictions on insurers' equity investments is credit negative for China's insurers because equity investments tend to add risk and volatility to the insurers' capital and earnings, says Moody's Investors Service.
The combined wealth in the UAE is set to grow by 4.2% each year to $510bn by 2024, depending on the pace of the post-coronavirus recovery, states a new report from the global management consultancy, Boston Consulting Group.
The CBIRC has said that it will set different requirements for different insurers on how much they can invest in equities.
China has reiterated that it would not allow banking and insurance institutions to clandestinely divert funds to bourses and the real estate sector, amid renewed efforts to curb financial risks and stock market volatility, and home price spurts.
China lifted limits on industries in which the country's insurers can make equity investments and laid plans to allow insurance funds to tap private equity and venture capital investments in pilot programs, the State Council has said.
The number of bond defaults in China is increasing as more companies are experiencing operating difficulties and higher risk exposure due to the economic downturn and the coronavirus pandemic, a senior CBIRC official has said.
Nippon Life Insurance plans to invest JPY30bn ($280m) in companies that provide solutions to social and environmental issues three years from now, reported Nikkei.