Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

Chinese insurers have a seemingly insatiable appetite for growth. In the past month alone there's been Anbang's on again, off again bid for Starwood, and now Ping An looks to be on the verge of a takeover battle for car website Autohome.

Signs of stabilization in the nation's economy probably won't change that. Instead, insurers will simply target smaller deals to diversify and combat diminishing returns at home.

Ten-year bond yields in China have fallen to 2.9 percent from about 4.7 percent at the start of 2014. As Goldman Sachs noted in a recent report, ``a rise in the benchmark rate seems unlikely in the near term given global and domestic demand weakness.''

Bigger Drop
Government bond yields in China have fallen to 2.94 percent from 4.67 percent at the start of 2014
Source: Bloomberg

It's not that Chinese insurers are where the Japanese or Taiwanese were in the 1990s, when negative spreads meant payouts exceeded premiums, causing some to collapse. But, as Bloomberg Intelligence analyst Steven Lam points out, in order to spur returns, many insurers are cutting back on bank deposits and instead boosting their investments in stocks and ``non-standard'' assets such as infrastructure debt. As of February, about 45 percent of funds were in equities and instruments other than bonds, part of the reason insurers have managed to maintain or increase returns despite falling note yields.

Riskier Business
Chinese insurers are plowing more into equities and other investments as they seek to boost returns
Source: Bloomberg; China Insurance Regulatory Commission

According to Lam, the real effect of declining returns will be felt later this year as some of the multi-year fixed deposits that insurers have been putting their premium income into expire. That's going to mean more takeover battles, albeit on a smaller scale.

On Friday, Ping An made a $1.6 billion play for about half of Autohome. Twelve hours later it was trumped by the Chinese firm's own CEO, James Zhi Qin, who submitted a preliminary acquisition proposal of his own. To Ping An, the attraction isn't just that Autohome is the No. 1 website in a country obsessed by cars, but that it also offers of platform to sell insurance products.

Anbang isn't stopping either, earlier this month paying north of $3 million for the South Korean assets of German insurer Allianz. Tiny, yes, but Anbang already has a stake in Seoul-based Tongyang Life Insurance and building scale could help the Chinese company ride out the current tough market there. Anbang is also bidding for the U.K.'s Abbey Life Assurance, according to the FT. That would only be a $1 billion transaction but it shows the deal wheels are still turning.

Even Fosun International, the conglomerate that bought Club Med along with an insurer in Portugal and was hammered during the financial crisis, is still at it. It may have dropped a $460 million offer for Israeli insurance company Phoenix Holdings but last week, it snapped up Ahava Dead Sea Laboratories for $77 million.

Clearly, for China's return-hungry insurers, the buying game is far from over. You'll just need to look a bit beyond the day's main headlines to spot the deals.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Nisha Gopalan in Hong Kong at

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Katrina Nicholas at