Industry Analysis Case Study

Reinsurance Industry in China: Opportunities and Threats for Foreign Reinsurers

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Abstract:
In 1998, nine foreign reinsurers together did business of RMB 52 billion in China, which was mainly from the placement of the business in the international market by the Chinese insurers. By 2005, these nine foreign reinsurers were doing business to the tune of RMB 300 billion. China’s accession to the World Trade Organisation (WTO), and the subsequent liberalisation of the insurance and reinsurance sectors, had ushered in vast business opportunities for foreign reinsurers in a market where China Re was the only major domestic player. But the business potential does not discount the threats and challenges for reinsurers.

Pedagogical Objectives:

• To understand the concept of reinsurance and its importance
• To understand the dynamics of the reinsurance industry in China
• To discuss the business opportunities for foreign players in the reinsurance market in China
• To understand the various reinsurance products developed for the Chinese market
• To discuss the challenges and threats in operating in the Chinese reinsurance industry
• To discuss what foreign reinsurers are doing to mitigate these threats.

Keywords : Reinsurance; China’s Reinsurance Market; Business Environment; Market Entry Strategies; Market Development; Risk Management; Reinsurance Products; Property and Casualty (P&C) Reinsurance; Life and Health (L&H) Reinsurance; Industry Analysis Case Study; China Re; Swiss Re; Munich Re; Cologne Re