Insurance sector shouldn't be rich man's club: CIRC

"Financial predators" can't be allowed to make speculative investments via the insurance sector, a government official said on Wednesday during a press conference held by the State Council Information Office.

Xiang Junbo, chairman of the China Insurance Regulatory Commission (CIRC), said that the insurance industry should not become a "rich man's club."

"Insurers that don't shoulder their social responsibility and the real economy must be driven out of the industry," he added.

Shao Yu, a senior analyst at Shanghai-based Orient Securities, told the Global Times on Wednesday that Xiang's statement was a reference to insurance capital that has been actively engaged in stock investment in recent months.

Since the second half of 2016, capital from insurance companies has been pouring into the domestic stock markets, with examples such as Anbang Insurance Group's increasing stake in China State Construction shares in November.

About 1.78 trillion yuan ($259 billion) worth of insurance premiums, accounting for about 13.3 percent of the total insurance premiums in 2016, flowed into domestic stocks and securities investment funds, statistics from the CIRC showed on Wednesday.

Shao said that although providers of some types of insurance, like deposit insurance, need to pursue returns that bear a certain level of risk, the risk should be kept at a very reasonable level.

"I think insurance companies should be very cautious with the capital and not use it to gain profits by means of short-term share trading," he noted.

Xiang said that the government would improve the mechanisms of risk prevention and intensify efforts to crack down upon illegal activities in the insurance sector.