Chartis China Appoints Director to Pursue Expansion

American International Group Inc.'s global property/casualty business Chartis Inc. is clear to appoint Paolo S. Grassi as the new director of its China operations, according to the China Insurance Regulatory Commission.

Prior to the new appointment, Grassi has been supervisor of Chartis China since August 2007, as well as senior vice president and chief legal adviser for Chartis International. Chartis China noted Grassi also held several legal positions in Switzerland and New York, including assistant legal adviser at AIG, and senior vice president and chief legal adviser with American International Underwriters.

Shanghai-based Chartis China also received the CIRC's permission to set up a Jiangsu branch in the city of Nanjing, in eastern China next June. Chartis said the Jiangsu branch approval is important for its expansion in China and is of "strategic importance" for Chartis to remain as a leading foreign property/casualty insurer in the country.

"Chartis considers China as economic growth leader within the Asia-Pacific region. Jiangsu was our strategic choice for geographic expansion within China because of its economic development and great potential for property and casualty insurance," said John Carey, Chartis China's president and chief executive, in a statement.

Jiangsu province is on China's east coast adjacent to Shanghai and is one of the largest Chinese provinces in terms of gross domestic product, population, exports and foreign direct investment. With nearly 80 million people and around 10% of the national GDP, Jiangsu province is also one of the biggest provincial property/casualty insurance markets in China, according to Chartis China.

Chartis China was the first foreign insurer to be allowed to operate property/casualty insurance in Shanghai in 1992. It then set up a branch in Guangzhou and sub-branches in Foshan and <location idsrc="xmltag.org" value="LU/cn..shnzhn">Shenzhen in southern China's Guangdong province. In July 2007, the CIRC approved Chartis China to reconstruct its local branches as a China-registered wholly owned property/casualty subsidiary of Chartis.

The company operates businesses covering property/casualty, liability, credit insurance, short-term health insurance and accidental injury insurance; as well as reinsurance business in those lines, in Beijing, Shanghai, Guangdong province and Jiangsu province.

In the first 10 months of 2011, Chartis China reported total cumulative original premium income of 896.67 million yuan (US$141.2 million), up 8.3% from a year earlier, said the CIRC. In 2010, it had registered capital of more than 601 million yuan.

Chartis's third-quarter operating income fell to US$442 million in 2011, from US$1.1 billion in the same period a year earlier. The 2011 result included US$574 million of catastrophe losses, which represented 0.8% of the company's after-tax shareholders' equity during the period. Its combined ratio for the quarter was 106.4, compared to 99.3 in the same period last year.

(By Rebecca Ng, Hong Kong news editor: [email protected])