March 1, Listed Chinese enterprises are again turning their attention to the insurance sector after China’s top insurance regulator resumes approving licenses for new insurance companies, the official Shanghai Securities News reported on Tuesday.

The China Insurance Regulatory Commission has mainly started issuing licenses to regional insurers registered in inland provinces including Hunan, Guangxi, Jiangxi and Sichuan, the paper said.

Local governments are behind all of the newly established companies, which are being invested in by large local enterprises and listed firms, the report said.

Zoomlion Heavy Industry Science & Technology Development Co. Ltd. (000157.SZ), a listed company controlled by the Hunan bureau of the State-owned Assets Supervision and Administration Commission, has announced that it will invest RMB 100 million with eight companies in a new insurance company, the paper said.

That company will be based in Hunan province and have a registered capital of RMB 1.15 billion, the report said.

China North Optical-electrical Technology Co. Ltd. (600435.SH) and seven other companies have received approval from the CIRC to set up a life insurance company in Beijing. The new company will have a registered capital of RMB 300 million, the paper said.

Hong Kong-listed Chinese People Holdings Co. Ltd. (0681.HK) is planning to line up with five other companies to invest a combined RMB 380 million in a life insurance company that will specialize in providing public assistance insurance, personal medical insurance, employment insurance and special life insurance business, the report said.

Meanwhile, other listed firms are actively increasing their investments in insurance companies. Dozens of listed companies have announced plans to put more money into their insurance investments.

Inner Mongolia Xishui Strong Year Co. Ltd. (600291.SH) has participated in Tianan Insurance Co. Ltd.’s rights offer.

Jiansu Sainty International Group Co. Ltd. (600287.SH), Jiangsu Guotai International Group Guomao Co. Ltd. (002091.SZ) and Jingling Hotel Corp. Ltd. (601007.SH), the existing shareholders of Nanjing-based Zking Property & Casualty Insurance Co. Ltd., have pledged to participate in the insurer’s additional share offer.

Analysts cited in the report remarked that the rush of investment in the insurance sector is being fuelled by a scarcity of insurance licenses and expectations that some insurers will go public.

Tianping Auto Insurance Co. Ltd., which has been profitable for four consecutive years, meets China’s listing requirements. Its shareholder Hubei Biocause Pharmaceutical Co. Ltd. (000627.SZ) stands to earn a considerable profit from the listing, considering that insurers list on average with a 30-times price-to-earnings ratio, the paper said.

But analysts said Tianping Auto is not a common case as it has “outstanding investment capacity”. A property insurance company generally needs five years to turn a profit while a life insurer may need 10 years or longer.

Companies hoping to recover investment costs or even make a profit through investments in insurance companies need to take careful and thorough consideration before proceeding, the analysts said.