Growing inflation a boon for insurers

China's insurers will benefit more than banks as "accelerating" inflation pushes bond yields higher and lending growth slows, according to Morgan Stanley.

"We don't think there's a massive inflation problem in China, but we're definitely in a period of accelerating inflation," said Jonathan Garner, Morgan Stanley's emerging markets strategist. "The insurance companies tend to be more positively levered to inflation than the banks."

China's benchmark Shanghai Composite Index has fallen 9.5 this year on concern increases in consumer prices and asset bubbles will spur the central bank to increase borrowing costs.