The reinsurance sector has a key role to play both as a safety valve for the insurance industry and in regulating the insurance market, and must speed up its development, said Wu Dingfu, chairman of the China Insurance Regulatory committee (CIRC).
China should boost the growth of the reinsurance sector with Chinese characteristics, develop a regional competitive edge, and make efforts to strengthen its foothold in the world reinsurance sector, Wu said at a conference on Financial Reform and Development of Reinsurance held on Monday.
The reinsurance sector is a poor cousin in the Chinese insurance industry. China Re's 21.5 billion yuan of premium income (US$2.68 billion) is only 4.3 percent of the country's insurance premium income, far below the average 20 percent ratio in developed countries.
A reinsurance company is paid by an insurance company to assume the risks of its policies. The only local reinsurance company in China now is China Reinsurance Group.
Wu said innovative development implied balanced growth between reinsurers and insurers, and a healthier relationship between the domestic reinsurance sector and the international reinsurance market.
(Xinhua News Agency July 26, 2006)
