China Life Insurance, the country's top life insurer, plans to boost its equity investments, especially in the financial, power and ports sectors, and expand its asset management business.
China Life, which owns 20 percent of Citigroup-controlled Guangdong Development Bank, plans to raise its stakes in unlisted firms and those planning stock listings, chief investment officer Liu Lefei said.
Beijing has been encouraging domestic insurers to invest in non-insurance sectors such as banking, asset management and even infrastructure to expand their profit streams.
China Life planned to sharply raise the portion of strategic equity stakes in its total investment portfolios to 5 to 10 percent, Liu said during a company tour with reporters in the eastern Chinese city of Nanjing, near Shanghai.
Its portfolios, which also include bonds, deposits and cash, shares listed on stock exchanges, mutual funds and investments in infrastructure projects, are expected to total about $110 billion by the end of the year, according to a research report by Kim Eng.
China Life posted a net profit of 7.82 billion yuan ($1.05 billion) for the third quarter as investment gains ballooned amid healthy premiums growth.
The insurer holds stakes in more than nine domestic banks and CITIC Securities, the country's largest listed brokerage.
The parent of China Life is awaiting final regulatory approval to buy a more than 10 percent stake in Huishang Bank, a small regional lender, China Life chairman Yang Chao said, and its strategy was to hold shares in most of the banks for the long term rather than sell for a quick profit.
China Life had applied to the country's insurance regulator to set up a mutual fund management company, possibly in partnership with foreign investors, he added.
Yang declined to identify potential investors, but sources familiar with the situation told Reuters China Life was in talks with an Australian bank.
The fund venture proposal also required approval from the China Securities Regulatory Commission, the country's top securities regulator, Yang said.
China Life would strive to develop its pension fund management business -- which was taking off in China -- and continue to focus next year on selling insurance policies in China's rural areas, which have already accounted for more than half of its total premiums, he said.
Insurance premium income totaled 158.6 billion yuan during the period, suggesting a 6.66 percent rise, based on previously reported data.
China Life has about 15,000 outlets across China and hires more than 650,000 sales agents, according to Wan Feng, president of China Life.
This is our advantage, which our rivals cannot match. We will continue to boost our sales through our agent team, Wan said.
Further interest rate hikes by the central bank this year would not have a major impact on the insurer's business, Wan added. He did not elaborate.
China Life's Hong Kong-listed shares have jumped 50 percent so far this year, in line with a 57 percent rise in the index of Chinese companies listed in Hong Kong. They closed down 0.1 percent at HK$39.95 on Wednesday.
(Reporting by George Chen; Writing by Charlie Zhu; Editing by Lincoln Feast)