Starr Insurance and Reinsurance Acquires Stake in Chinese Insurer

Starr Insurance and Reinsurance Ltd. is tapping the China market as a strategic investor in Shanghai-based nonlife insurer Dazhong Insurance Co. Ltd., with the acquisition of a 20% stake.

The China Insurance Regulatory Commission has approved Dazhong Insurance to issue an additional 286.5 million ordinary shares to Starr Insurance and Reinsurance. Following this, Starr Insurance and Reinsurance will hold a 20% stake in Dazhong Insurance and become the latter's foreign strategic investor, said the regulator in a statement.

Dazhong Insurance and Starr Insurance and Reinsurance did not disclose the financial details.

In the first quarter of 2011, Dazhong Insurance reported total original premium income of 463 million yuan (US$71.3 million), noted the CIRC.

Dazhong Insurance was established in 1995 by 26 companies, with registered capital of 1.15 billion yuan. It writes property insurance and reinsurance in Shanghai and in the provinces of Jiangsu, Zhejiang, Anhui, Fujian and Shandong.

Bermuda-based Starr Insurance and Reinsurance, also known as Starr International Insurance, underwrites submissions from a group of specialty insurance agencies -- Starr Underwriting Agencies - owned by C.V. Starr & Co. Inc. since 2007.

The company said it targets industrial, commercial, retail and government entity risks globally and accesses business produced by Starr Underwriting Agencies in Europe and Asia.

In the first quarter this year, the Shanghai insurance market generated total original premium income of more than 24.82 billion yuan. Of that, property insurance accounted for 6.79 billion yuan; life insurance 16.29 billion yuan; accident insurance 517 million yuan; and health insurance 1.23 billion yuan, according to the CIRC.

Starr Insurance and Reinsurance Ltd. and Hong Kong-based Starr International Insurance (Asia) Ltd. currently have a Best's Financial Strength Rating of A (Excellent).

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