Lloyd’s of London chairman Lord Levene will file a submission soon seeking approval to establish an on-shore reinsurance branch in China. Having an on-shore presence would allow Lloyd’s to reinsure local currency business, providing Chinese insurers with full access to the Lloyd’s market.
“An on-shore presence will allow Lloyd’s to play a broader role in China, helping to transfer major risks from the balance sheets of local insurers and providing full access, in local currency, to the capacity, knowledge and technical expertise of the Lloyd’s market,” said Lord Levene.
Lord Levene is in China as part of a high-powered business delegation led by Mike O’Brien, British Minister of State for International Trade and Investment, taking place in conjunction with a visit by British Prime Minister, Tony Blair. During his three-day visit Lord Levene will meet with Chinese Premier Wen Jiabao and other senior government officials and will travel to Beijing and Shanghai with the Prime Minister and the Minister of State.
“China represents an important strategic opportunity for Lloyd’s. We are working to develop a closer relationship with Chinese insurers and provide them with the capacity to support the rapid growth of its domestic market.”
Currently Lloyd’s is only able to provide off-shore capacity in foreign currency. Chinese legislation only allows for foreign reinsurance companies to establish reinsurance branches in China and does not recognize Lloyd’s unique market structure.
Lloyd’s has been supporting Chinese insurers with specialist reinsurance capacity and expertise since the 1970s in areas such as marine, aviation, energy and nuclear power risks. Lloyd’s established a representative office in Beijing in 2000 to promote a better understanding of Lloyd’s with the local insurance market and regulatory authorities.
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