BEIJING, July 9 (Xinhua) -- National Administration of Financial Regulation (NAFR), the Chinese financial regulator, gave in early July its nod to opening of the Beijing branch company of Mapfre Re, a leading reinsurer in Spain, reported Securities Daily on Monday.
With approved operating capital of 500 million yuan, the Beijing branch company is required to commence business within six months since its obtaining related business license, said NAFR in an announcement.
Upon the permission, the number of foreign-funded reinsurance companies in China will grow to nine and there will be 15 reinsurers in aggregate in the country in the future.
As the world's second largest economy and insurance market, China offers tremendous market space for foreign-funded reinsurance companies especially when overall premiums keep growing rapidly, said Li Wenzhong, deputy head of the rural insurance research institute of Capital University of Economics and Business.
Faster opening up paces also prompt foreign reinsurers to expand their business in China given the optimized policy environment and based inherently on an international market, reinsurance business can help foreign-funded reinsurers better spread risks and further globalize their operations, according to Li.
Generally, reinsurance industry has a relatively high technological threshold and foreign-funded reinsurers boast rich experience in products, actuarial science and risk control, noted Zhou Jin, a PwC China financial services consulting partner.
Foreign-funded reinsurers mostly attach great importance to the Chinese market as they are in apparent need of global expansion and risk diversification, added Zhou.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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