The party’s not over for Chinese insurers: Probe of top regulator shouldn’t halt overseas real estate investment

Corruption watchdog is investigating Xiang Junbo, but insurance companies still have as much as $275B to spend abroad

TRD NEW YORK /
Apr.April 10, 2017 09:05 AM

Xiang Junbo (Credit: Getty Images)

The Chinese government’s corruption watchdog is investigating the country’s top insurance regulator, but that shouldn’t slow down overseas investment into North American and European real estate markets.

The Central Commission for Discipline Inspection is investigating Xiang Junbo, chairman of the China Insurance Regulatory Commission, over suspicion of “severe disciplinary violations,” the Financial Times reported.

The probe comes at a time that China’s Communist party is cracking down on the insurance industry.

But with so many insurance firms looking for returns and looking to diversify their portfolios, the investigation shouldn’t put a squeeze on overseas spending, Bloomberg reported.

According to Bloomberg, older insurers like Ping An Insurance Group or China Life Insurance will more likely be big buyers as opposed to upstarts such as Anbang Insurance, which owns the Waldorf Astoria and was recently in talks with Kushner Companies to come in as an investor on 666 Fifth Avenue.

The country’s insurance industry expanded rapidly under Xiang, who joined the regulatory commission as chairman in 2011. Relatively young companies like Anbang and Foresea Life Insurance expanded through sales of short-term, high-yielding investments that, in turn, kicked off buying sprees of public domestic companies in order to meet returns.

Corporate raiders jumped into the fold and regulators tightened the reins, but the country’s insurers still held $49 billion worth of investments outside China at the end of last year, or roughly 2.3 percent of assets.

That’s still far shy of the 15 percent they’re allowed to go up to, meaning Chinese insurers still have at least another $275 billion to deploy overseas. [FT, Bloomberg] – Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Sam Zell of Equity Group Investments (Credit: Getty Images)

Sam Zell’s mobile-home firm stock up 1,200% since housing crash

St. John’s Terminal and Dean Shapiro of Oxford Properties Group (Renderings via COOKFOX Architects)

St. John’s Terminal redevelopment secures $973M construction loan

REIT stocks fall amid global coronavirus concerns (Credit: Getty Images, iStock)

REITs take a hit amid growing coronavirus concerns

Compound CEO Janine Yorio and a Clinton Hill property available to users on Compound

Real estate’s micro-investing moment

Centrale at 138 East 50th Street and Ceruzzi Properties’ Arthur Hooper (Hooper by Sasha Maslov)

Ceruzzi Properties secures $350M to refi Midtown East tower

Denizen Bushwick at 54 Noll Street (Credit: iStock, Google Maps)

All Year closing in on $675M refi for Rheingold Brewery development

arrow_forward_ios
Loading...