FINANCE

Chinese Insurers Likely to Get Larger Overseas Investment Quotas, Sources Say

Published: Feb. 14, 2025 7:52 p.m. GMT+8

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China’s insurers may soon be able to expand their overseas investment as the quota for the Qualified Domestic Institutional Investor (QDII) program is likely to be raised, sources with knowledge of the matter said.

Industry insiders have been calling for insurance companies to be allowed to increase their overseas investments to boost returns, as China’s persistently low interest rates have eroded their profitability. The QDII program allows eligible institutional investors to trade offshore securities.

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China's QDII program, facilitating overseas investment, may soon have its quota increased to help insurers enhance returns amidst low domestic interest rates.
The 48 approved insurance companies hold a combined QDII quota of about $39 billion, with major shareholders like Ping An Insurance and China Life Insurance.
Despite a low 1.9% overseas investment proportion, there is a push for insurers to boost overseas returns, as advised by policy guidelines encouraging global asset allocation.

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Who’s Who

Ping An Insurance (Group) Co. of China Ltd.: Ping An Insurance (Group) Co. of China Ltd. is one of the insurance companies with the largest shares in the QDII program, having secured a quota of $7.7 billion for overseas investment. The company is part of the initiative allowing Chinese insurers to expand their overseas investments to bolster returns amidst low domestic interest rates. This expanded investment capacity aligns with broader regulatory encouragement for global asset allocation within China's insurance sector.

Funde Sino Life Insurance Co. Ltd.: Funde Sino Life Insurance Co. Ltd. is one of the insurers that secured a significant share of the Qualified Domestic Institutional Investor (QDII) quota, with an allocation of $4.4 billion. This program allows them to invest overseas, aiming to enhance returns amid China's low interest rates.

China Life Insurance Co. Ltd.: China Life Insurance Co. Ltd. has secured a QDII quota of $4.2 billion, making it one of the insurers with the largest shares in the quota allocation, alongside Ping An Insurance and Funde Sino Life Insurance Co. Ltd.

China Insurance Security Fund Co. Ltd.: China Insurance Security Fund Co. Ltd. is a state-run bailout company focused on supporting the insurance sector. The report from this organization highlights that insurers' cost-cutting measures have not kept pace with declining asset yields, prompting calls to boost asset returns through strategies like overseas investments.

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