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Banks to invest in insurance
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According to the regulator, insurance companies earned 64.87 billion yuan on their investments in the first six months, with 10.7 percent of their assets put into equities and 53.6 percent into bonds at the end of June, compared with 17.7 percent and 44 percent respectively by the end of 2007.

Meanwhile, due to the sluggish stock market, bank deposits accounted for 25.8 percent of insurers' assets at the end of June, up from 24.4 percent at the end of 2007. The share of mutual funds fell to 6.9 percent, from 9.5 percent. The Shanghai stock market fell about 48 percent in the first half of the year, dragging down the share of equities.

"We will also have a close eye on new investment channels and products." Yuan said, adding that the regulator expects insurers to have stable investment returns in the second half.

The payouts for natural disasters in the first half of the year is expected to exceed 10 billion yuan. As of the end of June, payments related to snowstorms earlier this year surpassed 5 billion yuan, while those for May's Wenchuan earthquake stood at about 520 million yuan, the regulator said.

The industry's assets totaled 3.02 trillion yuan at the end of the second quarter. And the premiums over the same period surged 51.8 percent to 561.8 billion yuan.

(China Daily July 30, 2008)

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