CIIH cuts exposure to equities
Lisa Yu
Wednesday, July 16, 2008
China Insurance International Holdings (0966) reduced the equity allocation in its investment portfolio to 6-8 percent from 15 percent in the first quarter amid market volatility.
Michael Shen Koping, deputy managing director of China Insurance Group Asset Management, said yesterday that half of the capital generated from selling stocks was invested in cash and half in fixed- income assets. The company has no plan to further cut the equity weighting of its investment portfolio in the short term.
CIIH executive director Sammy Lau Siu-man said demand for insurance policies rose after the Sichuan earthquake in May, and the company received many inquiries about reinsurance. "People are more conscious about reinsurance after disasters such as the snow storms and the earthquake," said Lau.
Through its 50 percent-owned Tai Ping Life Insurance, CIIH generated about HK$16.2 billion in premiums last year, Lau said. Reinsurance contributed about HK$1.6 billion.
Premium growth slowed in the first half of 2008, however, and Lau said this was because sales of unit- linked insurance policies spiked last year due to bullish stock markets but have fallen off since.
Lau is optimistic about China business as the insurance industry's market penetration is still low. CIIH's mainland investments returned 16 percent last year, and its holdings in Hong Kong returned 13 percent.