(China Alert) Chinese insurers in 2016: Fundamental changes begin

·China’s insurance industry is beginning a year of reform
·Regulations coming into force in 2016 will push firms offshore
·Europe should be seen as blueprint for what’s to come from insurers

Update: Chinese insurers are beginning a year-long process of significant structural change, the effects of which will be felt both at home and abroad. Decades-long asset and liability mismatches, along with a distinctly piecemeal approach to book management are finally being addressed. Regulators are requiring upgrades of inefficient insurer portfolios by layering local reforms on top of global benchmarks to solve a number of uniquely-Chinese asset management challenges. While focused on domestic concerns, these changes will also set the tone for Chinese insurers’ overseas investments, and will require fundamental shifts in how global mandate managers, investment partners and advisers deal with Chinese insurance clients. Z-Ben Advisors forecasts that mainland insurers will, in many ways, become more active and more attractive clients for global firms as a result of these changes; however, not every current partnership will survive the transition intact.

Despite frequent public scoldings, Chinese insurers have long enjoyed considerable regulatory leniency, especially in regard to……

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