Growing Inflation a Boon for Insurers

"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 percent this year on concern increases in consumer prices and asset bubbles will spur the central bank to increase borrowing costs.

People's Bank of China Governor Zhou Xiaochuan said on Tuesday. China needs to monitor inflation as analysts forecast consumer prices rose in January by the most since 2008.

"We need to closely watch" the inflation rate, Zhou told reporters in Sydney on Tuesday after a meeting of central bankers. "Right now the inflation rate has started to go up, but the level is still relatively low."

Consumer prices probably advanced 2.1 percent in January from a year earlier, a third straight gain, according to the median estimate of a Bloomberg News survey.

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