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Reinsurer sets up base in Shanghai
(China Daily)
Updated: 2006-04-05 18:25 Lloyd's, the UK-based specialist insurer, is to set up a Chinese onshore reinsurance operation in Shanghai. The new company, Lloyd's Reinsurance Company (China) Ltd, will give Chinese insurers full access to the Lloyd's market. "We would like to focus our business on the catastrophe reinsurance business," Xie Zheqiang, Lloyd's Beijing chief representative, told China Daily yesterday. "Although China's reinsurance market is still in its infancy, we have been lured by the huge potential." Lloyd's was given the go-ahead by Chinese Government last November. Its Shanghai operation, which is expected to start business this autumn, will complement the work of its Beijing representative office that has been building relationships in China for six years. "We decided to base the operation in Shanghai because of its importance as a major financial centre in the rapidly growing Chinese economy," said Lord Levene, Lloyd's chairman. The Chinese reinsurance market, with the China Reinsurance Group as the only current local player, badly needs new underwriting capacity from global firms. This is because the rapidly growing primary insurance industry needs access to reinsurance markets, analysts say. China's insurance industry has seen a 30 per cent average annual growth rate during the past 20 years. Unlike many developed markets, Chinese primary insurers have ceded the majority of their business to reinsurers overseas in recent years. In 2002, they gave 90 per cent of their commercial business, worth US$6.7 billion, to foreign reinsurance companies, statistics indicate. "That itself shows the gap between the huge demand and inadequate supply of reinsurance," Wang Simiao, deputy director of the regulator's reinsurance division, told China Daily. "The entry of foreign reinsurers will help improve the competitiveness of local players through intensified competition." |
