China Re to Underwrite at Lloyd’s, Syndicate to Be Managed by Catlin

November 21, 2014

China Reinsurance (Group) Corporation has received approval from Lloyd’s to transform its existing special purpose syndicate into a stand-alone syndicate that will underwrite a diversified book of business, initially focusing on reinsurance, incepting from January 1, 2015.

The China Re Syndicate (Syndicate 2088) will be managed by Catlin Underwriting Agencies Limited, a subsidiary of Catlin Group Limited.

The formation of the China Re syndicate, which is projected to underwrite premiums of approximately £120 million in 2015, marks the first time that a Chinese-owned company has established a Lloyd’s syndicate writing open market business, according to a statement issued by Catlin.

The new syndicate provides China Re with a platform to access additional business to complement its existing portfolio of Chinese-based risks and to provide a London market presence to provide better service to existing international clients. In addition, the new syndicate will provide substantial benefits to the Lloyd’s market, including the potential for an increased flow of Chinese business and a greater understanding of Chinese risks.

Syndicate 2088 continues the strategic partnership that China Re and Catlin established in November 2011. As part of that partnership, China Re established a special purpose syndicate at Lloyd’s which has written whole-account quota share reinsurance for Syndicate 2003.

Syndicate 2003 is the largest syndicate at Lloyd’s and is owned and managed by the Catlin Group, the largest syndicate manager at Lloyd’s for the past five years, based on gross premiums written. In addition, each partner over the past three years has helped the other learn more about their respective markets, and each company has seconded employees to the other.

China Re is the largest reinsurance company in China and is ranked by A.M Best as the world’s eighth-largest reinsurance group based on total 2013 gross reinsurance premiums written of US$7.9 billion.

Catlin, through its Asia-Pacific underwriting hub, established underwriting offices in Hong Kong in 2006 and Shanghai in 2007, as well as a representative office in Beijing in 2012. It is currently the largest participant in Lloyd’s China, which was also established in 2007, according to the statement from Catlin.

Dr Li Peiyu, Chairman of China Re, said:

“The new stand-alone China Re syndicate will further raise awareness of the China Re brand in the Lloyd’s market. Our long-term strategy is to increase our activities in the international markets, and we look forward to working with international clients and their brokers placing business in the Lloyd’s market. China Re and Catlin formed a strategic partnership three years ago that has been mutually beneficial, and the establishment of the China Re syndicate at Lloyd’s takes that partnership to a new level. In the future, China Re plans to establish its own Lloyd’s managing agent company, so as to fully integrate ourselves into the Lloyd’s market.”

Stephen Catlin, chief executive of Catlin Group Limited, said:

“I am delighted that China Re has received permission to establish a Lloyd’s syndicate that will write open market business and that China Re has chosen Catlin to manage the syndicate from its outset. The syndicate further underscores Lloyd’s position as a leading market for international insurance and reinsurance business. We at Catlin look forward to continuing to work with China Re in the coming years to help build Syndicate 2088’s business portfolio.”

Syndicate 2088 will write a diversified portfolio, both by class of business and by geographic region. A significant proportion will represent new business to the Lloyd’s market. Initially, the open market segment of the portfolio will focus on property, marine and specialty treaty reinsurance business, some of which is currently written by China Re and which includes Chinese risks. The syndicate will also continue to write whole-account reinsurance of various Catlin entities.

Over time, China Re will assume responsibility for all of the functions required by the syndicate, Catlin Group said in its statement. It is proposed that China Re Underwriting Agency Limited, which initially will act as the service company of Syndicate 2088, will in the future apply to the Prudential Regulatory Authority, the Financial Conduct Authority and Lloyd’s to become a Lloyd’s managing agency responsible for the management of the syndicate.

Matthew Sage will be the active underwriter of Syndicate 2088. He most recently was chief underwriting officer of Catlin Bermuda, a post he assumed in 2008. He joined Catlin in London in 1991, concentrating on the underwriting of non-marine reinsurance accounts.

The syndicate’s deputy active underwriter will be Yin Hang, currently deputy general manager of the international business department at China Re in Beijing. Matthew Sage and Yin Hang will soon be joined by an underwriting team composed of both Chinese and London market professionals, Catlin Group said in its statement.

The syndicate’s non-underwriting functions will be led by Timothy Peters as syndicate manager, and Liu Gangjian, as deputy syndicate manager. Timothy Peters is currently the group head of reinsurance asset management for Catlin Group Limited and has served as finance director of Catlin Underwriting Agencies Limited. Liu Gangjian is currently the chief representative of China Re’s London representative office.

Matthew Sage said:

“I am excited to have been selected to lead Syndicate 2088, and I look forward to working with both long-time colleagues in the Lloyd’s marketplace as well as with professionals from China Re to build Syndicate 2088 into an established, vibrant participant in the market. “Syndicate 2088 will begin operating on Monday from its box on Gallery 3 at Lloyd’s and from its offices at 3 Minster Court.”

Source: Catlin Group

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