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China’s interest in reinsurance sector grows

Costly damage: Smoke billows from the site of explosions that reduced a parking lot filled with new cars to charred remains at a warehouse in northeastern China’s Tianjin municipality, on August 13. Insured losses from the event are estimated at up to $3.3 billion

In the wake of the Tianjin explosions, which caused insured losses of up to $3.3 billion last month, China is showing growing interest in the Bermuda reinsurance market.

That’s the view of Chris Garrod, director in the insurance practice of Conyers Dill & Pearman.

“China is a market where there is great potential and it will be interesting to see if the recent Tianjin explosion could be a market-changing event,” he said.

“It is estimated there are approximately $3 billion of losses at least in the Chinese P&C market as a result of that event, and that could very well lead to more Bermuda interest.”

He noted that recent China interest in Bermuda has included the proposed purchase of Sirius Group by CM International Holding, a subsidiary of China Minsheng Investment Corporation, and Panda Re’s $50 million cat bond deal, to be used by sponsor China Re.

Additionally, earlier this year China’s Fosun International agreed to acquire Bermuda-based Ironshore Re in a $1.84 billion deal.

Commenting on the increase in mergers and acquisitions impacting the insurance and reinsurance sector, Mr Garrod said: “I strongly believe there is great potential for the Island to strengthen and become an even more competitive jurisdiction as a result of those transactions being carried out.”