Shanghai’s intentions to build itself into a global reinsurance centre have been further bolstered by the news that an international reinsurance trading market, or reinsurance international board, will be launched in the near future, according to a report from China Daily.
Zhang Zhongning, deputy director of the general office of the National Administration of Financial Regulation, broke the news at a conference earlier this week.
“The trading system and related rules, such as registration management regulations for international reinsurance inflow business, clearing and settlement methods for on-site cross-border transaction facilitation, and operational guidelines for solvency reinsurance credit risk, will all be finalised,” Zhang said.
Furthermore, an international reinsurance function zone will be set up in the Lingang Special Area — part of the China (Shanghai) Pilot Free Trade Zone included in August 2019.
Zhang suggested that by setting up reinsurance operation facilities in Lingang, or opening accounts via the international reinsurance business platform in the area, insurers from home and abroad will be able to launch reinsurance business in the area while enjoying favourable tax and cross-border capital policies, as well as differentiated supervision measures.
China Daily’s report notes that in the guideline released in July 2021 to develop Shanghai’s Pudong New Area into a pioneer of socialist modernisation, the central authorities expressed their support to build an international reinsurance centre in Shanghai.
Thus, a guideline with 13 detailed measures was released in late October 2021 to help achieve this. The construction plan for the reinsurance international board was released during the 4th Lujiazui International Reinsurance Conference held in late November, with preparatory work already underway.
“By the time the conference was held, over 500 overseas reinsurance policyholders had participated in China’s reinsurance market, reflecting the appeal of the Chinese insurance market,” said Liang Tao, vice-chairman of the then China Banking and Insurance Regulatory Commission.
Liang added, “Reinsurance plays an important role in promoting the industry’s risk protection capabilities and enhancing risk management levels.”
Meanwhile, experts from the China Re Group said that the international board will facilitate China’s high-level two-way opening up.
“China’s reinsurance industry will thus be able to deeply participate in global risk management and create room for deeper cooperation,” they said.
State-owned China Re Group is a large reinsurance player in China and Asia, with its 2022 consolidated gross written premiums up 4.3% year-on-year to over 169.7 billion yuan ($23.9 billion).
