Asian insurers offering significant capacity for global property risks

Asian insurers, including several based in China, are offering significant capacity for international property risks, according to brokerage executives at Marsh Inc.

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

The Chinese insurers are not writing most casualty lines, but they will consider directors and officers liability risks.

Duncan Ellis, U.S. property practice leader at Marsh in New York, said his team secured capacity for about a dozen large international clients through Asian insurers.

“It's been just over the last six to nine months that we have seen more aggressive positions taken by these companies,” Mr. Ellis said, adding that the new entrants are providing “competitive tension” to the rates paid by U.S.-based multinationals for their insurance programs. “A new global player is always welcome,” Mr. Ellis said.

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

“I think what's happening here is not so much that the Chinese are coming here to follow their companies as much as they are looking at these risks on a global scope,” he said.

Moreover, just as U.S.-based insurers are viewing Asia as a target for growth, China-based insurers are looking to the U.S. market, Mr. Ellis said.

“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.