BEIJING, July 13 (Xinhua) -- China's insurance industry is facing a number of risks, ranging from liquidity pressure to reputation management, a senior Chinese insurance regulator warned.
Chen Wenhui, vice chairman of China Insurance Regulatory Commission (CIRC), urged insurers to take precautions against risks.
"Most traditional large and medium insurance companies keep risks under control, while for some radical firms hidden risks loom large as they experienced surprisingly fast business expansion in recent years," Chen told Xinhua in an exclusive interview.
"The asset size of China's insurance industry exceeds 16 trillion yuan (about 2.4 trillion U.S. dollars). However, the industry's liquidity risk is mainly caused by a few of radical companies," Chen said.
Chen suggested the companies lose weight by chopping off non-core businesses to ease liquidity pressure in the short term.
CIRC has made targeted risk warning, supervision and disposition plans for the industry, according to Chen.
The insurance regulator will continue to guide insurers to focus on core businesses.
Insurance funds will be guided to serve national strategies and infrastructure, Chen said.
The regulator will also strengthen the sector's role in supporting the real economy, he added.
Chinese insurers grabbed headlines by using leveraged money to buy shares in listed companies, triggering sharp volatility in the market late last year.
Chen's warning of risks in the insurance industry came a day after the country's securities regulator extended its message to strengthen oversight on the securities market to keep it fair, open and impartial.
"The regulator will continue to crack down on violations of securities laws and regulations, including insider trading and market manipulation," said Jiang Yang, vice chairman of the China Securities Regulatory Commission during an exclusive interview with Xinhua.