BEIJING, April 24 -- Chinese insurance companies earned 31.13 billion yuan from investments in the first three months of the year, with an average yield of 1.2 percent, China's insurance watchdog reported yesterday.

"Confronted with current fluctuations in the A-share market, insurance companies should adhere to a long-term value investment philosophy and show confidence in the long-term development of China's economy," China Insurance Regulatory Commission's (CIRC) Assistant Chairman Yuan Li said.

According to a press release, at the end of March, outstanding investment funds were 2.7 trillion yuan, 50 million yuan less than Jan 1.

Of the funds, 49.4 percent, or 1.3 trillion yuan, were invested in bonds, 26 percent were in bank deposits and 13.1 percent were in equities.

The regulator also announced that by the end of last month, China's insurance sector's total assets reached 2.94 trillion yuan, a 1.5 percent increase from Jan 1. And insurance premium income during the three months hit 297.91 billion yuan, a 51.6 percent year-on-year increase.

Amid this, property insurance reached about 64.15 billion yuan, a 24.6 percent increase, while life insurance increased 61.2 percent to 213.06 billion yuan.

"We are accelerating efforts to create a disaster insurance fund and expect to make substantial progress this year," Yuan said.

Boosted by favorable policies, the agricultural insurance premium brought in 900 million yuan in the first three months, 3.3 times more than the same period last year, and its proportion in property insurance increased to 1.4 percent.

"CRIC is cooperating with relevant departments to develop the policy on investing in the unsecured bond," Yuan said. "The scope of the infrastructure investment pilot project would expand, and experimental units would be created to allow insurance companies to invest in property."

There has been much public concern about cooperation between banks and insurance companies.

But Yuan said: "With the development of comprehensive financial management, the banking industry has strong aspirations of investing in the insurance sector. Insurance companies with equity investments from banks have been approved by the State Council, and pilots are being prepared."