Lloyd's announced it has received approval to establish an on-shore reinsurance operation in China.
The insurance market said the on-shore license will give it a strategic foothold in one of the world's fastest developing insurance territories. It would enable Lloyd's to reinsure local insurance business, which currently comprises nearly 90 percent of the total Chinese market. It would also provide Chinese insurers with full access to the Lloyd's market.
The announcement was made by Chinese President Hu Jintao during a state visit to the U.K.
"Today marks a very important day in the history of Lloyd's," said Lord Peter Levene, Lloyd's chairman. "China is forecast to become the world's second biggest economy and will develop into one of the world's largest and most important insurance markets."
Lord Levene thanked China's president and Britain's Prime Minister Tony Blair for his support.
"The granting of this license represents a vote of confidence in the strength and expertise of the Lloyd's market," Lord Levene continued. "Our focus now will be to develop and implement an operating structure within the next year."
"China's domestic insurance and reinsurance market is thriving," said Julian James, Lloyd's director, worldwide markets. "The significant demand for infrastructure, as well as growing property ownership and an increasing awareness of legal and property rights, are combining to underpin increasing demand for specialist insurance products.
"Lloyd's has been supporting Chinese insurers with specialist reinsurance capacity and expertise for over three decades in areas such as marine, aviation, energy and nuclear power risks, but in a limited, off-shore capacity. This license will now enable Lloyd's underwriters to develop a closer relationship with local insurers and provide them with the capacity to support the rapid growth of the domestic market."
Lloyd's said it established a representative office in Beijing in 2000.
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