4 trillion investment dilemma of insurance funds

The investment channel of insurance funds is narrow, resulting in a vicious circle between investment and underwriting capacity, which has affected the development of the entire insurance market. Song Yiqing Intern journalist Sougesan the industry's long-awaited "interim measures for investment in equity in insurance funds" and "interim measures for investment in real estate insurance funds" September 5.　　Unlisted Enterprise equity and real estate, to the insurance investment gate.　　In the two months since July, the CIRC has opened several texts to broaden the use of insurance funds, aiming to improve the structure of insurance assets and liabilities, optimize asset allocation and ease investment pressure. As of the end of June, the balance of insurance funds has reached 4.17 trillion yuan.　　The huge insurance fund faces the investment predicament, becomes the policy frequency the catalyst.　　In the first half of 2010, the average investment yield of Chinese insurance assets dropped from 3.44% in the first half of 2009 to 1.93%, not only below the CPI, or even lower than the same period, according to data released by the Circ. Limited by narrow investment channels, investment market maturity and capacity constraints, China's insurance fund investment has long been trapped: Investment allocation can not be diversified, the lack of long-term investment products, profitability with the market fundamentals "ups and downs" and the volatility is huge, investment income can not remain stable.　　And the investment income as the foundation of underwriting, its "low income, big amplitude" situation, not only affected the development of new insurance products, but also affected the ability to improve underwriting.　　There is a vicious circle between investment and underwriting ability, which affects the development of the whole insurance market.　　New opening August 5, the announcement of the "interim measures for the administration of insurance funds" opened the door of the insurance funds investment real estate and unlisted Enterprise equity, stipulating that the carrying balance of the investment real estate of the insurance company shall not exceed 10% of the total assets of the company at the end of last quarter, and the upper limit of　　According to the total assets of the insurance industry at the end of June 2010, up to 452.35 billion yuan and 226.17 billion yuan of insurance funds will enter the real estate and PE market. The interim measures for the investment in equity of insurance funds and the interim measures for the investment in real estate of insurance funds (hereinafter referred to as "two measures") are promulgated, which is the refinement of the management method of the above funds utilization.　　The investment team, solvency, financial index and net assets scale of the insurance institution are put forward higher qualification requirements, and the object of investment is clearly defined. Guotai Insurance analyst Peng Yonggang said the benefits of the two-channel floodgates to insurance funds are self-evident.　　At present, real estate investment yield can reach 7%~8%, obviously higher than stock market and bond market.　　But at present, the new investment channel only for the insurance funds to ease the investment pressure, increase the income increased a possibility, the concrete implementation of the situation is not known. "In the field of real estate investment and unlisted companies ' equity investments, insurers are novices and still need time to break through," said a senior executive at a mid-sized insurer. "The total actuarial division of life Insurance," said Wang-Jing, the investment competition of insurance companies willMore intense, the future may appear polarization situation.　　In fact, the 2010 downturn in the capital markets has become an exceptionally difficult year for insurance investment. The Insurance Regulatory Commission estimates that the size of the insured assets to be allocated throughout the year will increase to 2 trillion yuan, up nearly one-fold from 2009, but the return on insurance investment has shrunk sharply.　　In the first half of 2010, the investment income of the insurance industry was 75.52 billion yuan, which decreased by 34.47 billion yuan compared with 2009.　　In the case of low underwriting profit, investment income is very important to support the sustainable development of insurance industry. To ease the pressure on investment, the CIRC July 2010 liberalized the interest rate swaps business and adjusted the insurance investment ratio.　　Equity investment accounted for the ratio from 20% to 25%, equity and equity funds 10% of the proportion of the limit was "through", the total ratio is still 20%.　　The investment is difficult at present, the insurance product income is low, the homogeneity is serious, cannot attract the consumption, already became restricts the insurance industry development the important factor. By the end of 2009, the insurance market in developed countries has reached a depth of about 12%, compared with China's 3.32%.　　From the perspective of insurance density, developed countries have reached 3000 U.S. dollars, while the domestic per capita premium of 856.72 yuan, about 126.92 U.S. dollars, the protection level is significantly lower.　　The narrow insurance investment channel restricts the possibility of product innovation to some extent. In the past, when the stock market is hot and the fund is hot, the insurance company has launched the investment products in order to meet the market demand, such as dividend insurance, universal insurance, investment and so on. These products have the dual function of security and investment, but the dependence on insurance investment status is very high.　　If the operation is not good, bonus risk may not be divided into a rate cut cycle, the universal risk will fall; as the volatility of the stock market fell, the risk account also showed negative returns. On the other hand, the guarantee advantage of this innovative product is not obvious. The guarantee function of investment type insurance is low, compared with other financial products, the income is low.　　So in the national financial market all the way, investment-type insurance products are not divided into how much benefits, but also crowding out the traditional security products market. In the face of the demand of insurance return, the 2.5% reservation rate of traditional life insurance is liberalized in July, which brings more imagination to the insurance market.　　Market participants in a large insurance company said that in a market dominated by investment-type insurance, a predetermined interest rate on the liberalisation of traditional life insurance would attract the attention of consumers, and that institutions would likely launch high interest-rate life insurance to preempt the market in the future.　　However, whether high interest rate products can be successfully launched, ultimately depends on the operation of insurance companies and the level of investment profits, if the insurance companies do not operate well or the benefits are not high, will only be "a piece of paper." An insurance company executives told reporters that foreign insurance companies underwriting income plus investment income, generally can reach more than 10%. Because the traditional insurance business in many countries has been slow growth, the profit space is limited, many insurance giants make the investment income as the main profit source of the insurance company.　Now the domestic investment channel is limited, is restricts the insurance to the deep development important factor.　Half of the domestic insurance money is invested in the bond market, and about 30% of the money can only be deposited at low interest bank deposits.　　Although the use of insurance funds and investment in the field has been expanded, but in China's financial market, it is difficult to really add value.　　With the opening of many new investment channels, the capital operation structure of the domestic insurance industry is more and more similar to that of foreign countries, but the investment market in China is not comparable.　　China's financial markets are not sufficiently developed, and in contrast to rising prices and asset price inflation, fixed-income market interest rates are too low or even upside down, and the value added space currently offered by financial markets is small. Take the biggest investment channel of insurance funds-bond market as an example. In 2009 the Chinese bond market accumulated 4.9 trillion yuan (about $700 billion trillion) of renminbi bonds, while the US issued a bond of $7 trillion trillion. Guotai's analysis shows that, according to the 35% increase in premiums and 70% accumulation rate, 2010 investment in the insurance industry will be increased by 1.05 trillion yuan; According to the average investment cycle of bonds for 5 years, there are 320 billion yuan insurance funds to buy bonds maturing, the need for reinvestment.　　But there are not many medium-and long-term bonds that meet the investment requirements of insurers. In addition, the Chinese and American bond markets are far apart in their varieties and structures. According to wind advisory data, as of the end of 2009, domestic corporate bonds accounted for only about 4.9% of the bond market, the rest of the majority of the Treasury and financial debt, and insurance funds are currently a large proportion of the allocation of Treasury bonds.　　The U.S. insurance funds can be in the market to allocate a variety of bonds, government debt, municipal bonds, corporate bonds and foreign bonds are ranked among them, the benefits of insurance investment bonds are flexible protection. The absence of the bond interest rate curve also causes the domestic bond market to be more stable and less profitable. Bond market yields fell all the way in 2010, with 5-year yields falling to around 2.5% from 2.95% in the beginning. Insurance funds are harder to invest in bonds, and insurance assets are facing inefficient allocation and mismatch. Insurance funds in developed countries can also use derivative instruments to circumvent possible risks.　　But the lack of domestic financial derivatives also limits the flexibility of the use of insurance funds. An analyst who declined to be named said the current foundation for innovation in insurance products was premature.　　Substantive innovation can only be achieved if new investment products appear in financial markets and there are corresponding financial instruments to hedge risks. Insurance Density: The amount of per capita premium calculated per local population.　　It reflects the degree of participation of residents in insurance, the development level of national economy and insurance industry. Depth of insurance: refers to the ratio of premium income to gross domestic product (GDP), which reflects the position of insurance industry in the whole national economy.