Chinese insurers will be allowed to invest more capital into the alternative investment sector, the regulator's vice-chairman said on Friday.

Chen Wenhui, vice-chairman of the China Insurance Regulatory Commission, told the China Wealth Management 50 forum, "We will further increase the proportion that insurers can invest in the alternative investment sector, as it may bring higher investment return in the long run."

An alternative investment covers asset classes other than stocks, bonds, and cash, such as real estate and private equity.

Currently, the regulator's ceiling for alternative investment is 10 percent of insurers' premiums.

Despite the bearish stock and bond market, the investment return of Chinese insurers was 4.65 percent last year, higher than the 3.39 percent in 2012.

This has contributed to the insurers' higher yields from alternative investments, said Chen.

The regulator said in a statement on Wednesday that insurers can put premiums generated from policies written before 1999 into isolated accounts and invest in blue chips in any amount they deem fit.