Risk managers looking for significant property insurance capacity have more options as insurers based in China make a concerted push to write U.S. business.

The insurers, which include Beijing-based People's Insurance Co. of China and Shanghai-based China Pacific Property Insurance Co. Ltd., are taking up to 10% lines on property placements up to $1 billion.

Risk managers at several major U.S. companies say they have accessed or are considering accessing the Chinese capacity.

“It's been just over the last six to nine months that we have seen more aggressive positions taken by these companies,” said Duncan Ellis, U.S. property practice leader at Marsh Inc. in New York. Marsh has secured capacity for about a dozen large international clients through Asian insurers, he said.

Mr. Ellis said the new entrants have strong balance sheets and are looking for ways to diversify risks in their books of business.

“This is definitely a trend which is here to stay. In fact, I would probably argue that it is only a matter of time before one of these companies buys a shell company in the U.S. and resurrects it to start issuing paper,” Mr. Ellis said.

Chris Baudouin, Chicago-based CEO of Aon P.L.C.'s global client network, said Chinese insurers are targeting property risks.

“Their appetite right now is only for property. They don't understand the liability and workers compensation market in the U.S.,” he said.

The insurers tend to favor industries such as construction and manufacturing. “I don't think they will be overly aggressive on pricing,” Mr. Baudouin added.

Daniel M. Ames, associate director of corporate insurance at Dearborn, Mich.-based Ford Motor Co., said Ford has worked with China-based insurers for three to four years, but the capacity they have offered has been fairly low.

However, a recent trip to China convinced him that the China-based insurers are taking a greater interest in providing significant positions on global program placements.

“This year, we were able to have some very successful meetings and got a better understanding of CPIC and PICC,” Mr. Ames said. “They are solid companies.”

Alan G. Gier, director of global risk management and insurance corporate risk management for the treasurer's office. at Detroit-based General Motors Co., said the automaker is familiar with China-based insurers through its joint ventures in China and is investigating their capacity.

“The emergence of new capacity from the Chinese insurers intrigues us, but we will likely move slowly,” Mr. Gier said. “The new capacity is very competitive from a price, terms and conditions perspective.”

Brian Eichenlaub, director of risk management and insurance for Troy, Mich.-based Delphi Automotive L.L.P., said Chinese insurance capacity appeared on his radar screen as he went through property renewals this year.

“We've been watching it for the last few years, but now they have really made a big push into the property side by trying to get on our program,” Mr. Eichenlaub said. “They took a more aggressive stance and we took serious consideration.”

Challenges

The Chinese insurers face regulatory challenges, however. Lacking admitted status or U.S. subsidiaries, the insurers have structured their deals as reinsurance or through captive insurance.

Stephan Upshaw, vice president of risk management at Equity Residential, a Chicago-based apartment complex owner and operator with more than 400 properties, said such concerns have led him to pass on using Chinese capacity for now.

“Up to now, I have chosen not to include them in our programs.”

Mr. Upshaw also said he has concerns about procedural issues in paying claims.

“I am concerned what would happen if there were a big, complicated claim,” Mr. Upshaw said.

Initially, Mr. Gier said he also had concerns about claims procedures and the Chinese insurers' lack of familiarity with highly manuscripted insurance programs, but said doing business with the Chinese insurers makes strategic sense for companies looking to grow in Asia.

“We currently access capacity all over the globe, so adding some Asian capacity or increasing it would be a natural move for us as we look to diversify our panel of insurers,” Mr. Gier said.