China to further open reinsurance market

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BIZCHINA / Center

China to further open reinsurance market

(Reuters)
Updated: 2007-07-11 15:52

China would allow more big foreign reinsurance firms into the country,
aiming to boost market competition by attracting non-State capital into
the sector, the insurance regulator said on Wednesday.

China's fledgling insurance industry has been expanding rapidly as
Beijing dismantles a cradle-to-grave socialist welfare system.

But the reinsurance sector, starting from a weak base, is lagging far
behind the development of the insurance sector and urgently needs to be
strengthened, the China Insurance Regulatory Commission said in a report
published on its Web site (www.circ.gov.cn).'

To that end, China will encourage non-state investors to branch into the
reinsurance sector and bring in more big foreign reinsurers with
expertise in health, agricultural as well as medicare insurance
businesses, it said.

China now has one reinsurance group company that dominate the reinsurance
market, while several foreign insurers such as Swiss Re, Munich Re and
French reinsurer have set up branches in China.

In a move to boost the reinsurance sector, China injected $4 billion into
China Reinsurance earlier this year to pave the way for the top reinsurer
to bring in foreign strategic investors and eventually launch a public
listing. ADVERTISEMENT

In 2006, China's reinsurance premiums came to 21.7 billion yuan ($2.87
billion), compared with insurance premiums of 564.14 billion yuan.

Moreover, reinsurance premiums have grown by an average of just 9.2
percent a year over the past decade, contrasting with that for insurance
premiums of 12.8 percent.

By the end of 2006, the total assets of China's reinsurers reached 31.2
billion yuan, less than two percent of the total for the insurance
industry.

The insurance regulator said that China aims to double its 2005 insurance
premiums by 2010 to 1 trillion yuan, and it aims to expand its
reinsurance premiums to 66 billion yuan by the same year.

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20071123 Extracted from http://www.hellomandarin.net