China Reinsurance announced that it had received government approval for its plan to split itself into three units, specialising in asset reinsurance, life reinsurance and direct asset insurance. The plan is intended to help the company compete with foreign firms, now that it has lost its monopoly on reinsurance in China. Foreign rivals Munich Re and Swiss Re last year obtained licences to open branch offices in China and, although neither has yet started operating in the country, China Re is believed to be feeling pressured by their presence.
The new units would be open to foreign investment and China Re said it was in talks with firms from the US, Japan, Hong Kong and Singapore, though not Munich Re or Swiss Re. Although the company has no immediate plans for a listing, it might consider selling shares to the public when restructuring is completed before the end of this year. China Re had premium income of Yn19.2bn in 2002, 17.5 per cent up on 2001, and recorded an estimated profit of Yn680m.