Lloyd’s announced that it has been given the green light to establish an on-shore reinsurance operation in China.
“The on-shore license will give Lloyd’s an important strategic foothold in one of the world’s fastest developing insurance markets,” said the announcement. “It will enable Lloyd’s to reinsure local currency business, which currently comprises nearly 90 percent of the total Chinese market. It will also provide Chinese insurers with full access to the Lloyd’s market.”
The announcement coincided with a state visit to the U.K. by China’s President Hu Jintao. Welcoming the news, Lloyd’s Chairman Lord Levene commented: “Today marks a very important day in the history of Lloyd’s. China is forecast to become the world’s second biggest economy and will develop into one of the world’s largest and most important insurance markets. I am delighted that His Excellency, President Hu Jintao, has confirmed that Lloyd’s will now be able to support China in this critical area.
“I am very grateful to both the Chinese and UK authorities for their support and guidance, and especially to Prime Minister Tony Blair for his strong personal support on this issue over a long period. The granting of this license represents a vote of confidence in the strength and expertise of the Lloyd’s market. Our focus now will be to develop and implement an operating structure within the next year.”
Lloyd’s Director, Worldwide Markets, Julian James added: “China’s domestic insurance and reinsurance market is thriving. The significant demand for infrastructure, as well as growing property ownership and an increasing awareness of legal and property rights, are combining to underpin increasing demand for specialist insurance products.
“Lloyd’s has been supporting Chinese insurers with specialist reinsurance capacity and expertise for over three decades in areas such as Marine, Aviation, Energy and Nuclear Power risks, but in a limited, off-shore capacity. This license will now enable Lloyd’s underwriters to develop a closer relationship with local insurers and provide them with the capacity to support the rapid growth of the domestic market.”
Lloyd’s has maintained a “Representative Office” in Beijing since 2000 “in order to promote a better understanding of Lloyd’s with the local insurance market and for Lloyd’s to understand the requirements of the local market.”
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