Currency management unit and non-yuan policies are in the pipeline China Insurance International Holdings (CIIH) is expecting regulatory approval within the year for its Hong Kong-based asset management unit to manage the investments of foreign exchange holdings of mainland peers. Under its new chairman, Feng Xiaozeng, the Hong Kong-listed insurance group is also hoping to lead domestic competitors in introducing foreign currency-denominated life insurance policies on the mainland, taking aim at a market currently served by overseas insurers selling underground policies. Chinese regulators last August relaxed rules to allow domestic insurers to invest up to 80 per cent of their previous year's foreign currency assets offshore - a move intended to broaden mainland insurers' hitherto limited investment options, to diversify risk and to boost their returns. As the only mainland-backed insurance company with an offshore asset management unit, CIIH is well placed to compete with international investment banks for mandates to help domestic peers to manage their overseas securities investments. CIIH's proposal to offer such services to its domestic counterparts has been greeted warmly by regulatory authorities in Beijing, said Mr Feng, who until May was a vice-chairman of the China Insurance Regulatory Commission. 'We expect that regulatory approval may come in the remaining months of the year,' he said. 'We are treating this as a new focal point of new business development.' Pending regulatory endorsement, life insurance policies with foreign currency premiums may be launched within the year as well. CIIH yesterday reported a 10.9 per cent year-on-year increase in unaudited first-half turnover to $3.3 billion. It booked a net loss of $43.76 million after a $104 million profit a year ago, which had resulted from a one-off gain from a change in its premium accounting method. Both of its three-year-old mainland life and property insurance units are still in the red. But management reiterated hope that they will break even next year. Net profit from CIIH's international reinsurance business, the chief contributor to earnings, fell 29 per cent year on year to $77 million in the first half, dragged down by natural disasters in other parts of the world and an adverse investment environment. CIIH estimated that its reinsurance business would receive gross claims totalling between $60 million and $70 million in the wake of Hurricane Katrina, according to Kenneth Ng Yu-lam, chief executive of the company's international reinsurance arm.