Moody's: Market correction may increase risks for insurers

The sharp correction in China's equities market will bring greater pressure on the capitalization and profitability of Chinese insurance companies which have high equity exposure, global credit ratings agency Moody's Investors Service Inc said on Monday.

The market volatility is likely to have an immediate negative impact on Chinese life insurers as their financials are highly dependent on the stock market performance, said Sally Yim, a senior credit analyst with Moody's at a news conference in Beijing.

The ratings agency forecast that the Chinese stock market will remain highly volatile for the coming 12 to 18 months, coupled with lingering economic uncertainties, low liquidity and reduced margin financing activity.