China:Shanghai eyes transforming metropolis as an international reinsurance centre

Shanghai's goal to become an international reinsurance centre would lend many unique advantages, Mr Wu Qing, Shanghai deputy mayor has said.

He was speaking at the 1st Lujiazui International Reinsurance Conference (LIRC) which opened yesterday in Shanghai as a part of supporting activities of the 2nd China International Import Expo. The inaugural LIRC has for its theme, "Creating A Global Community of Risk Management: Cooperation and Win-Win”.

Mr Wu said, "The establishment of an international financial centre in Shanghai is an international strategy. With the guidance and support of relevant ministries, we are on a sprint towards the goal of basically building up our international economic strength equivalent to the renminbi’s international status."

He cited plus factors for Shanghai as:

• First, with China's rapid economic development, the country's insurance industry has become the world's second largest insurance market, but the insurance density and insurance depth are currently only 58% and 75% of average global levels; hence, the development potential is very huge. At the same time, the insurance markets of several nearby countries also have great potential, and there is a high demand for reinsurance. All of these have laid a solid foundation for Shanghai to build an international reinsurance centre and provide new opportunities.
• Second, Shanghai has gathered a large number of domestic and foreign financial institutions and insurance institutions. Shanghai Insurance Exchange (SHIE) can build an international reinsurance platform that can rely on the Shanghai Free Trade Zone free trade account system to open a cross-border capital-light settlement channel.
• Third, the state has set aside a new area in the Shanghai Free Trade Zone to build an international financial centre and a science and technology centre, improve the capital market, and escalate the integration of the Yangtze River Deltat as a national strategy, which will promote economic reform and further opening up, and create new room for Shanghai as an international reinsurance centre.

According to the government's goals for Shanghai International Financial Centre, the International Insurance Centre is listed as one of the six major centres for key construction, and the reinsurance centre would provide important support for the construction of the international insurance centre.

Source: Asia Insurance Review