National licence for Munich Re

Munich Re, the world's largest reinsuranee company, has become the first foreign firm to win a nationwide
licence for yuan-denominated reinsurance business. The move is part of a liberalisation of
the insurance market following China's accession to the World Trade
Organisation.
Munich Re's total premiums from insur-ance and reinsurance in
China last year were US$37bn, an increase of 44 per cent on the previous
year.
Reinsuranee is relatively little used in China and the sector is dominated by
the state-owned China Reinsurance. Foreign companies such as Munich Re and Swiss
Re are not expected to win significant business in the near future.
Lloyd's of London has applied to establish an onshore reinsurance branch in China that would
enable it to reinsure local curren-cy business and provide Chinese insurers with full
access to the Lloyd's market. Cur-rently, Lloyd's is only able to offer offshore capacity in
foreign currency.
China only allows individual foreign insurance companies to set
up branches, and does not recognise Lloyd's unique structure.