CIIH plans 2.2b yuan cash injection for units
China Insurance International Holdings, the fourth-largest Hong Kong-listed insurer, plans to inject as much as 2.2 billion yuan (HK$2.48 billion) into its life and non-life insurance subsidiaries on the mainland to help them expand.
Tai Ping Life Insurance, 50.05 per cent controlled by CIIH, will issue 1.4 billion to 1.6 billion yuan worth of subordinated bonds in exchange for funds while Tai Ping Insurance, CIIH's non-life unit, will issue 400 million to 600 million yuan in subordinated bonds.
The capital raising would be sufficient to fund business expansion for the next 1? years, said CIIH executive director and chief executive Kenneth Ng.
He said the recent interest rate cuts by the mainland's central bank would not affect the company's asset allocation strategy but overall investment returns would come under pressure.
The company had maintained an investment return of more than 4 per cent, well above the regulatory minimum of 2.5 per cent, he added.
Meanwhile, Swiss Reinsurance said mainland non-life insurers may benefit from Beijing's 4 trillion yuan stimulus package because of demand for general insurance protection from various infrastructure projects.
'Construction projects such as airports and railways will generate additional business opportunities,' said Clarence Wong, Swiss Re's chief economist in Asia.