Ping An, Insurers Invest $2.2 Billion in China Railway

A consortium led by Ping An Insurance will invest nearly $2.2 billion in an express railway linking Beijing and Shanghai, marking the first major infrastructure investment by the country's insurers.

Beijing has pushed insurers to invest in sectors from banking and asset management to infrastructure to expand revenue and secure higher returns -- vital in the face of mounting policy obligations in coming decades and an increasing reliance on a volatile stock market.

Ping An and its partners -- including Italy's Generali, PICC Property and Casualty and recent stock market debutante China Pacific Insurance -- intend to pay 16 billion yuan ($2.2 billion) for a 13.93 percent stake in the railway, which they said on Friday would become the world's longest upon completion.

Other partners included Taikang Life Insurance and Tai Ping Life and the China Reinsurance, Ping An said in a statement.

"The insurance industry has made a breakthrough in infrastructure investment," said Sun Jianyi, Ping An's Executive Vice President. The firm did not divulge how investment would be split among the consortium's multiple partners.

Ping An became in 2006 the first Chinese insurer designated to test the waters in infrastructure.

China's insurance industry is booming as the state dismantles a cradle-to-grave welfare system, but rock-bottom urban incomes of less than $2,000 a year mean China's life insurance premium payments came to just $34 per person per year, versus $2,829 for Japan and $1,790 for the United States.

Ping An's shares held steady on Thursday to end at HK$84.65.