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Insurer's debt product scores

CHINA Pacific Insurance (Group) Co has completed the first debt product of project financing in China after insurers were allowed to invest in infrastructure projects, the firm said yesterday.

The 2-billion-yuan (US$293 million) project-financing product will invest in the Changjiang Tunnel and Bridge Project which links Shanghai's Chongming Island and Pudong New Area.

The product has a life of 10 years.

The tunnel-bridge project's investment is about 12.6 billion yuan.

The insurer's asset management arm sold 40 percent of the product to non-related third parties, or other insurance companies, the Shanghai-based insurer said yesterday in a statement.

The company declined to disclose more but it is widely expected that the remaining 60 percent were sold within the Pacific Insurance Group.

"The product is well received by the market," the Shanghai-listed insurer said yesterday, without elaborating.

Pacific Insurance's product was the first to obtain the regulatory go-ahead after the China Insurance Regulatory Commission issued rules on debt products of project financing in April.

China is expanding investment channels for insurers from traditional government bonds and bank deposits. Insurers can invest in infrastructure by using debt project-financing products through their asset management firms. The insurers will also be able to invest in real estate under the new Insurance Law, which will take effect from October 1.

The returns on insurance investment were 109.97 billion yuan in the first half, better than the year-ago level. The rising stock market has boosted insurers' investment returns.

China's stock market is the best performing this year with the benchmark Shanghai Composite Index rising 85 percent.

The insurer's shares gained 0.71 percent to close at 28.32 yuan yesterday in the Shanghai trading.


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