Chinese insurers, which cumulatively have some 1.1 trillion yuan on hand to invest this year, face a big dilemma in choosing where to park that money during the second half of 2009, the industry regulator said yesterday.

"There will be around 1.1 trillion yuan, or 30 percent of existing assets, available for investment this year, putting insurers under huge investment pressure," said Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC).

Since the returns on bonds may continue to decrease in the following months, insurers may increase their investments in the stock market, in infrastructure projects and in the property sector during the second half, industry insiders said.

"We are planning to invest more in stocks once the market undergoes some corrections," a manager at the Taikang Asset Management Co Ltd told China Daily.

As of the end of June, Chinese insurers had increased their investments by 10.4 percent from the beginning of this year. Bonds accounted for 50.2 percent, down 7.7 percentage points, and bank deposits 31 percent, up 4.5 percentage points, the CIRC said yesterday.

Among the investment portfolio, the proportion of stocks increased 1.9 percentage points to 9.8 percent, while mutual funds accounted for 6.8 percent, up 1.4 percentage points. The combined ceiling for these two types of investment is 20 percent.