A senior Chineseinsuranceregulator warned against the industrys reckless overseas investment, saying some insurers behaved recklessly when it came to offshore acquisitions, the official Securities Times reported on Thursday.

Chen Wenhui, vice chairman of the ChinaInsuranceRegulatory Commission (CIRC) urged insurers to take a cautious approach when investing overseas, the newspaper said.

Blind outbound investment by insurers, often with high leverage, involved tens of billions of yuan worth of risks in some cases, Chen was quoted as saying.

Some companies behave like a little boy rushing into a candy store when making overseas investment, Chen said.

Chen made the remarks at a time when Beijing is stepping up efforts to stem capital outflows that adds depreciation pressure to the yuan, and threatens to exhaust Chinas foreign currency reserves.

Acquisitive Chinese insurers such as AnbangInsuranceGroup have been shopping overseas in recent years, snapping up foreign companies and properties.

Chinese insurers may boost outbound investment by about $100 billion over the next three years, as they seek to diversify risks, BNP Paribas predicted in December.

($1 = 6.8929 Chinese yuan) (Reporting by Samuel Shen and John Ruwitch; editing by Sam Holmes)

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China Regulator Urges Insurers to Avoid 'Reckless' Offshore ... - Insurance Journal