Capital injection for China Re from state funds

Asia

The Chinese government, through the state owned Central Huijin Investment Company, is looking to put around Yuan10bn (US$125mn) into the state owned China Reinsurance Group to enable the company to compete with foreign reinsurers such as Munich Re and Swiss Re in the Chinese market. According to Chinese media reports, the plan is currently being scrutinised by the industry regulatory authority, the Chinese Insurance Regulatory Commission (CIRC). This is widely seen as a formality as CIRC is believed to be in favour of the move. The capital injection is two and a half times the company’s current registered capital of Yuan4bn. According to Dow Jones Newswires, Central Huijin Investment was set up by the Chinese government to restructure and recapitalise China’s failing state banks prior to listing them on the stock market. China Re increased its gross premium income by nearly 8% in 2005.