Shanghai insurance exchange launches products to diversify insurance management channels

PUBLISHED : Friday, 11 November, 2016, 10:16pm
UPDATED : Friday, 11 November, 2016, 10:16pm

Shanghai insurance exchange said on Friday two insurance assets products have debuted on the bourse as the newly established exchange started a trial run of a platform that aims to improve and diversify insurance assets management channels.

The issuance of the two products have a combined value of 7.88 billion yuan (HK$9.1 billion), available to 20-plus members of the insurance assets trading platform at the exchange, the bourse said on Friday.

One product is a 5-billion-yuan assets-backed securities (ABS) product whose underlining assets are policy loans from China Pacific Life Insurance. It is under management by Changjiang Pension Insurance Co, a China Pacific affiliate. A one-year, 1 billion yuan product was launched as the first batch. Buyers include insurers and banks such as Industrial Bank and China Merchants Bank.

Policy loans are issued by an insurer and use the cash value of a person’s life insurance policy as collateral.

The ABS offers a channel for the insurer to better manage its assets by making use of these large numbers of six-month, small-sum loans – about 10,000 yuan each – to secure longer-term, large-sum financing.

The other product is a debt investment product issued by Taiping Asset Management Co that allows capital to tap public-private-partnership investment projects in Dujiangyan in southern Sichuan province. The five-year 2.88-billion-yuan product has already attracted buyers including China Pacific Life Insurance and lenders, Taiping said.

“The launch of the two products underlines the first step for the insurance bourse on the trading of insurance assets,” said Yan Jianjun, a researcher at Chinese Academy of Social Sciences in Beijing.

He noted that in the future, the bourse is expected to quicken development of more products on the liabilities side – offering trading of insurance policies to cushion against new, complex and special risks.