The Research Of Insurance Funds Investment In Real Estate

The newly revised 《law of insurance》 allows insurance funds to enter the real estate field in2009. This is another extension of the area of the investment of insurance capital afterwards to allow insurance companies to invest in corporate bonds, listed equity, which also means the progress of the level of Chinese insurance funds investment and the ration of insurance supervision. As a real estate investment types, while in the west it has entered the insurance company’s investment list100years. But it is a newborn thing for Chinese insurance company. According to the data measured by the end of2011, the funds that can be used for real estate investment dimensions exceed600billion RMB. It is a huge amount of money. The way that insurance funds enter the real estate field is single at present in our country, which is mainly to take in first-tier cities to purchase commercial real estate in the form of asset allocation. Pension entity, infrastructure investment, the construction of social security housing and other investment is still in the stage of experiment. The real estate securities market in our country is basically at a standstill phase which is large-scale in the United States, Britain and other countries. The direct investment is still the main choice for insurance funds at the real estate field at present in our country. Insurance funds investing real estate, not only can improve the long-term rate of return on capital, a hedge against erosion of value because of inflation, but also can improve the life insurance company’s asset liability matching, enhance operational stability. The real estate industry is a people’s livelihood based industry. It is sensitive to the economic situation, government policy, credit status, so the risk is very big also. The insurance companies are short at the accumulated experience, talent cultivation, risk control system, which requires insurance companies shall be adhere to sound operation, long-term holders, the value investment philosophy in the choice of real estate investment subject. At the same time we must pay attention to training and the introduction of real estate investment professionals, improve the level of operation and management. Regulators should also supervise the insurance company’s investment behavior prudently and strictly, in order to guarantee insurance company stability and maintain the necessary solvency.