The pace of insurance capital investment in overseas projects has been shrinking since 2017, but Taikang Insurance Group*（“Taikang”）recently disclosed that it plans to invest 1.075 billion UK Sterling (approximately RMB 9.319 billion) in UK’s Hinckley Point C nuclear power project (“HPC Project”). In its plan, the actual investment does not exceed 544 million UK Sterling, and the loan from the National Development Bank does not exceed 531 million UK Sterling. Taikang’s investment in this project will be carried out through ODI (Overseas Direct Investment) instead of QDII (Qualified Domestic Institutional Investors).
As a life insurance company, why is Taikang so interested in overseas nuclear power projects?
Wang Xiangnan, an associate researcher at the Research Center for Insurance and Economic Development of Chinese Academy of Social Sciences, explained the following: “In terms of capital properties, insurance funds have long-term characteristics; while nuclear power construction has the nature of infrastructure, that is, large investment and long period of investment return. According to cash flow and risk characteristics of the infrastructure investment, the assets and liabilities are matched.”
“This project does not have a clear expiry date and is a long-term asset allocation. As a life insurance company, Taikang can pay a large amount of funds at a time, and in the principle of matching assets and liabilities, it can allocate more long-term assets. At the same time, nuclear power project is also a relatively encouraged overseas investment, which is favorable to the technical and operational exchanges between the two countries.”
*Founded in 1996, Taikang Insurance Group is currently one of China’s largest insurance and financial services institutions. Taikang is based in Beijing and operates in three main business sectors: insurance, asset management, and health and elderly care.
