Lloyd’s China Gets Regulatory Clearance for Direct Insurance Business

Lloyd's China will be permitted to write direct insurance in addition to its existing reinsurance business after it was granted a license by the China Insurance Regulatory Commission.

"This is very significant development for both Lloyd's and the Chinese insurance market," said Lloyd's Chairman Peter Levene in a statement. "This will be a further important building block in the development of Shanghai as a major international financial and maritime center."

A London-based spokesman for Lloyd's declined to comment further about their business plan in China, but said Lloyd's is beginning to look at available opportunities and strategies.

Lloyd's earlier said it aims to build up local knowledge and experience as opposed to immediate growth in China. It is involved in reinsurance for the Civil Aviation Administration of China and a famous Chinese athlete.

"I see the re-emergence of the Asian economies as an opportunity. I foresee the Lloyd's insurance market working ever more closely and in partnership with more Asian companies in helping them manage their risks," said Levene.

Including Lloyd's Reinsurance Company (China), there are six foreign reinsurers in China: Swiss Re, Munich Re, General Re, Hannover Re and Scor Re.

In April, the CIRC granted Scor SE, the parent of Scor Re, a composite license that will enable the group to extend its existing nonlife businesses to life and health insurance in China. Scor was also permitted to raise the capital of its Beijing branch to 31 million euros (US$38 million) from 20 million euros in January.

Lloyd's opened its Shanghai-based operation in China in April 2007. Eric Gao, a Chinese national with more than 30 years in the industry, was appointed chief executive officer for Lloyd’s Reinsurance Company (China) Ltd. in September 2008.

Lloyd's appointed Bin Yang as a chief representative for its Beijing representative office in February 2009, when it had 15 managing agents participating in China, five with underwriters in Shanghai, and 10 writing business from London.

Japan is Lloyd's eighth-largest market, where it writes traditional classes of business, as well as a range of specialist covers.

Apart from China and Japan, Lloyd's has offices in several Asian and Middle East countries and cities, including Australia, Hong Kong, Israel, New Zealand and Singapore.

Lloyd's opened an office in India's Mumbai several years ago, but it scaled it down after due to the limiting regulatory system of the country. It has an India liaison office managed by London-based Jose Ribeiro, Lloyd's director of international markets.

Lloyd's Reinsurance Company (China) Ltd. currently has a Best's Financial Strength Rating of A (Excellent).

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