The director of the Ingosstrakh branch in Tatarstan, Maxim Artemyev, said that endowment product with a fixed income rate in Chinese yuan is gaining popularity in the republic. “In Russian classical insurance all settlements are made in Russian rubles; for export-import transactions, the insurance value is calculated in rubles and a third country currency. The Chinese yuan increasingly frequently appears in settlements,” said Artemyev.
Head of the investment insurance department of IC Rosgosstrakh Zhizn Boris Borzunov also noted the growing demand for products in yuan. The company launched a fixed income CNY program for a period of 2 years in mid-August 2022.
Andrey Sirotkin, Senior Lecturer at the Department of Banking at Synergy University believes that in terms of asset diversification and profitability, such products are an attractive alternative to investing in dollars and euros.
“We live in a time of sanctions, and the safety of bank deposits in foreign currency is questionable. With investments through yuan and tenge, everything is much easier, since China takes a neutral position in relation to Russia, and Kazakhstan is pro-Russian. Such products are rational and attractive in our time, especially for people who are not ready to keep their savings in ruble liquidity. Thus, insurance companies simply offer products in accordance with people’s request,” the expert believes.
However, the volatility of any currency can affect the return on investments, whether investments are in dollars, euros, yuan or tenge, besides, any currency tends to change in price.
“It should also be noted that the current monetary policy of China assumes a weak yuan. Over the past 5-10 years, the yuan has seriously weakened against the dollar. I believe the currency will continue to weaken. Therefore, I would not invest money exclusively in yuan and use it to enter investment life insurance or endowment insurance. It is a different story if there is some kind of symbiosis of currencies within one insurance product,” Sirotkin believes.
According to the expert, however, it is impossible to unequivocally assert that the use of dollars and euros in insurance products can lead to large infrastructure risks.
Source: https://rt.rbc.ru/tatarstan/31/01/2023/63d8c3499a79475ed38e11bf
Photo is from an open source.
