China Re Eyes Group Structural Reform in 2012

China Reinsurance (Group) Corp. said it will deepen its group structural reforms in 2012 by focusing on "marketization, professionalism and internationalization" to enhance its operations and investment returns to shareholders.

Chairman Peiyu Li said in a statement that in 2011, the reinsurance group improved its management system infrastructure, internal control and risk management capability, enhancing the technology of its reinsurance business.

China Re started a special-purpose Lloyd's syndicate this year by forming a strategic partnership with U.K.-based Catlin Group Ltd. to write reinsurance cover for an existing Catlin syndicate. The Chinese state-owned reinsurer said last year that it and Catlin would provide capital for Syndicate 2088, which will have a stamp capacity of around 50 million pounds (US$78.7 million).

"As the biggest reinsurance company in China, China Re's strategy is to grow both in the home market and abroad, and to have a greater involvement in international markets," said Li in an earlier statement (Best's News Service, Feb. 7, 2012).

Three of China Re's subsidiaries — China Property & Casualty Reinsurance Co., China Life Reinsurance Co. and China Continent Property & Casualty Insurance Co. — also realized business scales and synergy developments during the year, Li added.

The reinsurance group reported consolidated revenue in 2011 totaling 54.75 billion yuan (US$8.68 billion). Of that, premium income accounted for 54.59 billion yuan. China Re's profit before tax was more than 1.95 billion yuan. Shareholders' equity totaled 40.52 billion yuan and total assets were 123.71 billion yuan, according to the reinsurer.

China Re was jointly founded by the Ministry of Finance of China and Central Huijin Investment Corp., an investment arm of the Chinese government. Those entities respectively hold 15.09% and 84.91% stakes in the reinsurer.

China Reinsurance (Group) Corp. currently has a Best's Financial Strength Rating of A (Excellent).

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