[Daily Telegraph (UK) Website]Lloyd's of London grants China its first insurance syndicate
Insurance group has been trying to attract more customers from emerging markets
The Lloyd’s of London insurance market has granted a Chinese firm the right to own an underwriting syndicate for the first time in the market’s 326-year history.
China Re has been working with Catlin since 2011 when they agreed to run a special purpose syndicate together. This vehicle will now be converted to a full syndicate to allow China Re to write its own insurance from January 1.
The new syndicate is expected to underwrite £120m of coverage next year, chiefly in reinsurance and managed by a subsidiary of Catlin, the market’s biggest underwriter.
“[T]he new syndicate will provide substantial benefits to the Lloyd’s market, including the potential for an increased flow of Chinese business and a greater understanding of Chinese risks,” said the firms in a statement.
China Re is owned by the Chinese state’s ministry of finance and Central Huijin, the sovereign fund that holds stakes in the country’s biggest banks. The company is China's biggest reinsurance firm and the eighth largest in the world, with $7.9bn (£5bn) in gross written premiums last year.
Syndicate 2088, which China Re will own from January, wrote £48.8m in premiums last year and posted a loss of £100,000.
“Our long-term strategy is to increase our activities in the international markets, and we look forward to working with international clients and their brokers placing business in the Lloyd’s market,” said Li Peiyu, the chairman of China Re.
Lloyd’s of London, which can trace its roots to a coffee house in 1688, has been chasing deals from emerging markets for several years and now has business in over 200 countries. The organisation opened an underwriting office in Beijing in September, 14 years after it first opened a representative office in the city.
The market is made up of 94 syndicates, or members that join together to cover a particular risk, from insuring against shipwrecks and earthquakes to covering a footballer’s legs.
The distinctive Lloyd's building on Lime Street was sold to Chinese insurer Ping An for £260m last year.