Chinese insurer Sinosure, China Export and Credit Insurance Corporation, will finance $556 million, or one-third of a $2.56 billion contract with Iran, to fund the electrification of a nearly 1,000 km railroad from Tehran to Mashhad, said the Financial Tribune.
The remaining two-thirds of the loan will be financed by the Chinese government at a low-interest rate, granted by Exim Bank of China and guaranteed by Iran’s Bank of Industry and Mines.
The China National Machinery Import and Export Corporation will carry out the electrification project, following on from a 2014 project of building the Ankara-Istanbul high-speed railroad, together with China Railway Construction Corporation Limited and Turkish firms, the Financial Tribune reported.
Chinese re/insurers have shown increasing interest in taking on an active role across international markets, after seeing accelerated growth in the Chinese reinsurance market.
To facilitate this expansion, Hong Kong recently laid out plans for becoming an interface for Mainland Chinese enterprises to “go global.”
According to Chinese insurance regulator the CIRC, insurers in China during 2016 made 3.1 trillion yuan ($448.6 billion) in premium income, up nearly 30% on the previous year, with the pace of growth being significantly faster than in 2015 when it grew by 20% year-on-year.
Global reinsurers are confronting a new reality in how and where they compete as mature markets see increasingly stagnant growth levels, while China and other emerging markets witness vast growth as economies develop.
The Chinese re/insurance industry has seen a phenomenal boom setting up these firms as among the fastest growing of recent years across a global playing field.
Coming years will likely see increasing numbers of Chinese re/insurers negotiating deals such as the Iranian infrastructure project, not only in emerging markets, but gradually spreading into a share of more mature markets as well.
