Shanghai opens an international reinsurance trading market for the world, China | System | Global
On June 8, 2023, the Reinsurance International Board was officially launched at the 14th Lujiazui Forum. The Shanghai Banking and Insurance Regulatory Bureau and the Shanghai Local Financial Supervision Bureau jointly issued the Implementation Rules on Accelerating the Construction of the Shanghai International Reinsurance Center, opening a global reinsurance entry business trading market in Shanghai, marking another important step in the construction of the Shanghai International Reinsurance Center.
The Implementation Rules have formulated a total of 22 policy measures around improving the infrastructure and institutional system of the reinsurance market, deepening the supply and innovation capabilities of reinsurance products, promoting high-level institutional opening up of reinsurance to the outside world, and enhancing the construction of mechanisms for attracting and cultivating reinsurance talents.
In terms of improving the infrastructure and institutional system of the reinsurance market, we will focus on building a new type of reinsurance trading system that is oriented towards the future through digitization, leveraging the financial infrastructure functions of the reinsurance registration and settlement platform, improving market transparency and operational efficiency, and building a new type of reinsurance trading market that integrates transaction clearing and settlement, providing Chinese solutions under the traditional global reinsurance trading system. In addition, by supporting various types of insurance and reinsurance institutions to establish reinsurance operation centers in Shanghai, we guide the concentration of national reinsurance resources in the Shanghai Lingang International Reinsurance Functional Zone, gather Chinese forces to support global risk redistribution, and contribute Chinese forces to global risk protection and financial resource allocation.
In terms of deepening the supply and innovation capabilities of reinsurance products, establish a data exchange mechanism and resource integration mechanism for national key areas and projects, and improve the underwriting capacity and service level of reinsurance; Continuously improving the innovation level of reinsurance products to better serve the development of the real economy; Actively explore pilot projects for the issuance and trading of new risk transfer products, and improve the mechanism for diversifying capital for catastrophic and special risks.
In promoting the high-level institutional opening up of reinsurance to the outside world, we will build an international reinsurance board, rely on highly transparent over-the-counter trading facilities and rules, and create a unified international entry market that connects with global risk diversification; Building an international reinsurance functional area based on the domestic market and radiating globally in the Lingang New Area of Shanghai, to support the implementation of a domestically leading and internationally benchmark reinsurance business environment within the area; Realize the facilitation of cross-border income and expenditure settlement for domestic reinsurance, reduce cross-border transaction costs and shorten settlement cycles; Building the Shanghai International Reinsurance Exhibition Brand.
In terms of enhancing the attraction and training mechanism for reinsurance talents, we will provide support policies for talent introduction, entry and exit of overseas talents, and suspension of residency, and encourage the government, universities, and enterprises to work together to strengthen the construction of Shanghai's reinsurance talent team.
The Implementation Rules have clarified the construction path of the Shanghai International Reinsurance Center, forming a joint force of policy support from all parties. In 2022, the scale of premiums ceded from China to overseas is about 112 billion yuan, while the scale of premiums ceded from overseas is about 28.3 billion yuan. The reinsurance deficit is nearly four times, and further deepening and two-way integration with the global reinsurance market still needs to be strengthened. Guided by the regulatory policies of the State Administration for Financial Supervision and Administration and supported by the business policies of the Shanghai Municipal Government, the Shanghai Banking and Insurance Regulatory Bureau, together with the Shanghai Local Financial Regulatory Bureau, will seize the opportunity of the global underwriting capacity "re layout" window period, rely on the digital and technological international reinsurance business platform, focus on building a transparent, convenient, and efficient international reinsurance trading market, and promote the high-level institutional opening up and high-quality development of China's reinsurance market to the outside world.
