Saturday, September 23, 2017

Chinese insurers advised to divest non-core assets

Insurance players in China should take precautions against a wide range of risks the industry is faced with, an official from the China Insurance Regulatory Commission (CIRC) said.

While risks are under control for most traditional large and medium insurance firms, the same cannot be said of some newer firms that have experienced surprisingly fast business expansion in recent years but are in reality carrying hidden risks, according to CIRC vice chairman Chen Wenhui during an interview with Xinhua.

Chen said that China’s insurance industry’s assets are more than Rmb16 trillion (US$2.4 trillion), but most of the sector’s liquidity risk is caused by a few radical companies.

He called on such firms to offload non-core businesses to free themselves of liquidity pressures, at least in the short term.

The CIRC executive said insurers will be well advised to focus on core businesses and to align insurance funds to serve national strategies and infrastructure.

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