Lujiazui Financial City [Photo/sipaphoto]

Lujiazui Financial City, located in the China (Shanghai) Pilot Free Trade Zone, recently received a branch of Korean Reinsurance Co, a South Korean reinsurance company.

Yoon Sung-Muk, general manager of the Shanghai branch of the reinsurance company, said that the company will step up investment in businesses involved in property, health, and life insurance.

Korean Reinsurance Co, founded in 1963, ranks No 10 in the world among reinsurance companies. In 2019, the amount of insurance premiums received by the company reached 48.5 billion yuan ($6.87 billion), and its net revenue hit 1.13 billion yuan. 

The working capital of the Shanghai branch of the South Korea-based company is valued at 500 million yuan. The branch will offer both life and non-life reinsurances for China and other countries.

Yoon said that the Shanghai branch expected to receive 651 million yuan in reinsurance premiums in 2021 and 659 million yuan in 2022, respectively.

Lujiazui Financial City, which is developing into an international hub for reinsurance, was already home to six professional reinsurance institutes and companies, and the presence of Korean Reinsurance is expected to help attract more reinsurance companies.

Sheng Chun, deputy general manager of the Shanghai branch, said that foreign institutes must consider the convenience of contacting clients and the local business climate before choosing a new location for their business ventures.

He went on to say that Lujiazui, as an international city, has managed to gather a number of well-known financial institutes from China and other countries.

"The Shanghai Insurance Exchange is also located in Lujiazui. The city is moving closer to its goal of becoming an international hub for reinsurance as more reinsurance entities choose to operate in the city," Sheng said.

Yoon said that the reinsurance business may be impacted by the epidemic in the short term, but in the long term, the insurance industry will gain momentum as the epidemic subsides and more people seek to insure their daily lives.

According to Yoon, there are still a large number of Chinese insurance companies making inquiries to Korean Reinsurance Co amid the epidemic.

He said that this indicated that some Chinese insurance companies are still running smoothly during the COVID-19 outbreak, with some types of insurance even seeing robust growth.

"As China’s economy continues to grow steadily, and the per capita income of Chinese people increases, the reinsurance market in China is looking at a promising future," Yoon said.

"Compared with developed countries, China's insurance market lags behind. The depth and density of insurance is far below the Asian average. Therefore, China's insurance and reinsurance industries still have a lot of room for growth," he added.

"As a reinsurance company, having a branch in China is better than trying to operate from outside the country," Yoon said, "because we can't fully understand market needs if we lack localized operation.”