The China Banking and Insurance Regulatory Commission (CBIRC) has reportedly released a notice wanting mainland Chinese insurers to sell catastrophe bonds in Hong Kong.

The regulator said that mainland property and casualty insurers and reinsurers can set up special units for raising funds through cat bond sale in Hong Kong, Reuters reported citing CBIRC’s statement.

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CBIRC stated that this would help insurers diversify their losses due to catastrophe events such as earthquakes, typhoons, and recent floods.

This summer, the central Chinese province of Henan witnessed catastrophic floods, which resulted in the deaths of many and huge losses.

Later in July, CBIRC said that it would work with insurers to shift focus on natural peril related insurance, offer insurance coverage and raise public awareness.

In other Chinese insurance industry news, media reports have emerged that Evergrande Group may sell its life insurance business to raise cash in a bid to address the liquidity crisis.

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Evergrande Group is a Chinese real-estate developer that is saddled with over $300bn debt.

Evergrande Group owns a 50% stake in the Evergrande Life Assurance company, which could fetch $600m at 0.5 times its book value.

Last week, British insurance giant Prudential raised $2.4bn through a share offering on the Hong Kong Stock Exchange (HKSE).

The insurer sold 130.8 million shares priced at HK$143.80 per share.

Prudential plans to use the funds to redeem existing high coupon debt and strengthen business operations in Asia and Africa.