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People's Insurance Company of China Appoints New Independent Director
People's Insurance Co (Group) of China Announces New Board Structure
PICC GROUP (01339.HK): Gao Pingyang has taken office as the company's Independent Non-Executive Director.
On February 13, Gelonghui reported that PICC GROUP (01339.HK) announced that Gao Pingyang's qualification for the position of independent non-executive Director of the company has been approved by the National Financial Supervisory Administration. This appointment will take effect from February 7, 2025, and Gao Yongwen's resignation as the company's independent non-executive Director will also take effect on the same date.
The U.S. dollar deposit interest rates have "plummeted from high levels," leading to a trend of funds moving to Hong Kong to increase allocation to high-yield U.S. dollar Assets, making Hong Kong insurance products favored.
① Due to Hong Kong's current implementation of the "linked exchange rate system" which is fixed to the USD, domestic dollar deposit interest rates have been lowered, but Hong Kong is not affected. ② For a long-term economic cycle with market interest rates in a downward environment, the capital gains potential is limited, and Asset allocation focuses more on the long term.
UBS Group: The green light is on for Insurance funds to invest in Gold, and no significant changes in asset allocation are expected.
Last Friday (the 7th), the National Financial Regulatory Administration announced that it would allow some Insurance companies to invest in Gold as part of their medium to long-term asset allocation. Most domestic Insurance companies are included in this. A UBS Group research report stated that this move was expected, as the administration had already hinted at it during the Lujiazui Forum last June. The report indicated that the risk of interest margin losses is currently a major challenge for the Insurance industry, due to the overlapping of a long-term interest rate down cycle and an 'asset shortage.' Gold not only serves as a tool for value storage but also provides risk diversification and liquidity advantages. Moreover, the approval for Gold may indirectly open the door for Overseas investments. The report stated.
The National Financial Supervisory Authority requires Insurance groups to maintain sufficient capital and liquidity buffers.
The General Office of the National Financial Supervision and Administration released the "Insurance Group Concentration Risk Regulatory Guidelines" last Saturday (8th), requiring insurance group companies to establish disclosure mechanisms for concentration risk information and emergency and mitigation management mechanisms. Insurance groups should Hold sufficient capital and liquidity buffers for concentration risks, and member companies should avoid excessive reliance on specific Assets, counterparties, clients, regions, or markets. The guidelines state that when significant risks from various types of concentration risks have already occurred or are expected to occur, potentially having a major impact on the group's liquidity, solvency, reputation, etc., the insurance group companies must develop emergency management and risk mitigation plans and strictly manage them.