Bermuda insurance giant ACE has moved into the China property and casualty market with a strategic partnership with one of China's largest insurers, the Huatai Insurance Company of China.

Huatai said the move was the first time that a foreign insurer has taken such a significant shareholders' stake in a Chinese insurance company.

The companies said the move to join forces will see them assume a leadership role in China's rapidly growing property/casualty market.

Huatai is China's first nationally licensed joint stock property/casualty insurer and the fourth largest provider of property/casualty products and services in China.

Under the terms of the agreement, ACE will acquire 22 percent of Huatai's outstanding shares for total consideration of approximately $150 million.

ACE CEO Brian Duperreault said: "We are very pleased to be entering into a partnership with Huatai, a unique company operating in an exciting marketplace.

"Our business partnership with Huatai will allow us to offer our global clients a local partner allied with the ACE Group of Insurance and Reinsurance Companies. It will also provide ACE with nation-wide access to China and enable us to provide our products and services to the largest and fastest growing market in the world. We are confident that together we have a compelling business proposition for our clients."

The partnership will also allow both companies to develop jointly new products and services for delivery nationally in China, and establish a framework for expansion into other key financial services areas.

Under Chinese regulations, the ACE Group's investment will be made by three subsidiary companies: ACE INA, ACE Tempest Re and ACE US Holdings.

In addition, three ACE executives have been elected to Huatai's board of directors, including Mr. Duperreault, ACE INA chairman Dominic Frederico, and ACE INA executive vice-president Peter O'Connor.

Mr. O'Connor will also serve as a full-time senior advisor to Huatai based in Beijing. Mr. O'Connor has 39 years of international insurance experience and will report to ACE Limited Vice Chairman Evan Greenberg, who is head of ACE's international operations.

ACE also will provide Huatai additional Chinese-speaking personnel to directly assist with senior level actuarial, financial, underwriting, and information technology development.

Huatai chairman Wang Zi Mu, who has been at the helm of the insurance company since its inception, said: "Huatai is happy to have entered into a strategic partnership with ACE. This is the first example in the history of China's property insurance industry that a foreign insurer has taken such a large shareholding in a Chinese insurance company. I believe that Huatai will become a stronger and more diversified company because of our strategic cooperation with ACE, and we look forward to a fruitful and successful relationship."

Huatai was formed in 1996 by 63 sponsoring shareholders, representing some of China's premier companies, and operates in a diversified product line including commercial and personal property, automobile, liability, oil and gas, marine hull and cargo, and aviation.

The company currently has branches in Beijing, Tianjin, Shanghai, Nanjing, Shenzhen, Qingdao, Dalian, and Guangzhou, and has been approved by the China Insurance Regulatory Commission to open another 18 branches and 22 sub-branches.

At December 31, 2001, Huatai had total assets of approximately $600 million. For the year ended December 31, 2001, Huatai had total premium income of $77 million, a 34 percent increase over the previous year.