Giant insurer Chubb Limited has entered into a 10-year strategic cooperation agreement with PICC Property & Casualty Company of China that will provide PICC’s customers and other Chinese-affiliated companies around the world access to Chubb’s global capabilities.
As part of the agreement, Chubb will set up dedicated underwriting and service centers – “China Desks” – for Chinese-affiliated enterprises in Chubb’s offices throughout the world.
PICC P&C is China’s largest property/casualty insurance company, with total assets of approximately $72.2 billion and gross written premiums of approximately $47.3 billion in 2016. PICC’s commercial customers include some of China’s largest enterprises, many of which have complex operations in multiple foreign jurisdictions.
Chubb is the world’s largest property/casualty insurance company by market capitalization and the largest commercial insurer in the United States. Chubb has more than $160 billion in assets, $35 billion of gross written premiums in 2016 and operations in 54 countries.
Chubb said the initiative is in line with the Chinese government’s drive to promote the country’s “Going Out” and “One Belt One Road” initiatives that call for China to be heavily involved in foreign infrastructure development even as Chinese authorities look to limit new overseas investments in other sectors such as real estate and hospitality industries.
China’s President Xi Jinping’s has announced plans to direct as much as 840 billion yuan ($122 billion) to build roads, railways, ports and pipelines across Asia and beyond, securing China’s central role in world trade, according to Reuters. The plan has the country’s state-owned enterprises considering investments in 65 participant nations.
Also, more than 40 Chinese insurance companies and asset managers have started an investment firm, raising 40 billion yuan ($6 billion) to finance energy and infrastructure projects overseas.
“For Chubb, this strategic cooperation agreement is a substantial opportunity to bring the full breadth of our capabilities and global network to bear in meeting the complex insurance needs of China’s largest and most successful companies,” said Evan G. Greenberg, chairman and CEO of Chubb.
According to Chubb, the 10-year strategic cooperation agreement includes these provisions:
Chubb and PICC will establish dedicated underwriting and service centers – “China Desks” – for Chinese-affiliated enterprises in Chubb’s offices throughout the world. Chubb and PICC will work together to insure and service China-affiliated companies overseas, as well as jointly explore other business opportunities. Chubb will also provide educational and training opportunities to PICC personnel assigned to the China Desks.
Chubb will make its global insurance capabilities available to PICC and its customers. Chinese companies with multinational insurance programs will be able to have their overseas insurance needs serviced through Chubb’s operations in 54 countries and partners in nearly 150 other countries. PICC will gain access to one of the world’s largest insurance networks, while Chubb will be able to jointly develop insurance business with some of China’s largest enterprises.
Chubb is not alone in seeing opportunity working with China companies. In July, Ironshore’s Pembroke Managing Agency Ltd. launched a Project Cargo Consortium to serve the Lloyd’s China platform, offering capacity limits of up to US$178 million. Pembroke Lloyd’s Syndicate 4000 is offering dedicated coverage for risk exposure and consequential loss related to project cargo transportation and delay in start-up for large scale project risks triggered by China’s “Belt and Road Initiative.”
China is currently drafting new rules to allow overseas firms to take majority stakes in local securities ventures, fund managers and insurers.