Move aims to stimulate reinsuranceChina's insurance watchdog is pondering approving several new reinsurance companies this year to encourage the development of the reinsurance market in China, said senior regulatory officials on Sunday.Currently China has only one specialized reinsurer, the China Reinsurance Company, and the situation is hampering the further growth of the sector, said Feng Xiaozeng, vice-chairman with the China Insurance Regulatory Commission (CIRC), at the National Reinsurance Conference, which was held in South China's Jiangxi Province on Sunday. "The priority task for spurring on the healthy development of the reinsurance sector is to regulate present institutions and add more operational entities to the marketplace," he said. A number of reinsurance centres will be set up gradually this year, he added. Industry sources said it was likely that some foreign reinsurers would be allowed into China's market. Several overseas reinsurers, who possess advanced technology and management know-how, have already applied for operating licences in China. Feng also urged domestic insurance companies to concentrate on their reinsurance business. China's Insurance Law demands that all insurance companies in China must reinsure 20 per cent of their businesses with the China Reinsurance Company, but many insurers have managed to evade the regulation. There are also a number of other problems holding back the industry, Feng said. For example, the insurance and reinsurance market can not satisfy the demand for underwriting against natural disasters, and the China Reinsurance Company does not have enough capital funds. Despite this, China Reinsurance Company General Manager Dai Fengju said at the conference that his company developed rapidly in 2000. It reaped in a premium income of 14 billion yuan (US$1.7 billion) last year, up 21 per cent from the previous year. Total indemnity paid stood at 7 billion yuan (US$843 million) last year. The company's total assets had reached 15.1 billion yuan (US$1.8 billion) by the end of last year, he said. His positive words were backed up by Feng who said despite negative factors, China's reinsurance market is still forging ahead with more reinsurers abiding by the compulsory reinsurance regulation and commercial reinsurance developing steadily. |
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