30/08/2016

Asian Insurers, Increasingly Influential Property Investors-Mainland Chinese Insurers Follow Taiwanese and Koreans-

mamoru masumiya 

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5―Acceleration to Invest into Properties

The growing insurance markets have been a predominant factor for the increase of property investments by Asian insurers. Quite a few insurers somewhat reduced their ratios of properties to total assets in 2015 (Chart-5) affected by the peak-out of regional property transaction volume. Thus, they were not particularly aggressive about property investment though they increased property assets.

However, mainland Chinese insurers who have low ratios of properties to total assets continued to lift the ratios even after the peak-out of regional property transaction volume. In addition, some Taiwanese and Korean insurers, such as Fubon Life Insurance, also accelerated property investments which lifted the property ratio significantly.

Some Asian insurers have become aggressive about property investments even in the U.S. and Europe. Property investment has been increasingly important for insurers who demand stable income-producing assets under the current low interest rate conditions.
Chart-5 Ratio of Properties to Total Assets of Asian Insurers

6―Final Note

Asian insurers have been increasing property investments backed by their growing insurance markets and the acceleration to invest into properties by mainland Chinese and others.

The regional property transaction volume can shrink further affected by global risks including the Chinese economic hard landing. However, it is likely that Asian insurers will continue to grow and increase property investments, and thus, will become more influential in property investment markets. It is possible that Asian insurers will become considerable property investors in Japan where they have never made sizable property investments.

mamoru masumiya

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