Chinese insurers will become more sensitive to market volatility as they face reduced returns due to low interest rates, S&P Global Ratings said Wednesday.
Insurers turn to high-risk assets amid a low-rate regime, S&P said.
Pressure is greater for life insurers, as dampened reinvestment yields lead to narrower spreads and rising asset-liability management constraints, the rating agency said.
Property and casualty insurers are also exposed given their earnings' dependence on investment income to pump up underwriting results, according to S&P.
The rating agency still views small monetary policy shifts in the next six months.