China Reinsurance (Group) Corporation: history, ownership, mission, how it works & makes money

A Brief History of China Reinsurance (Group) Corporation

China Reinsurance (Group) Corporation, established in 1996, is China's largest reinsurance company. As a state-owned enterprise, it operates under the supervision of the China Insurance Regulatory Commission. In 2005, the company went public, listing on the Hong Kong Stock Exchange under the ticker "1508.HK".

In 2010, China Re achieved a significant milestone by acquiring the reinsurance operations of the People's Insurance Company of China (PICC). This acquisition bolstered its market share and enhanced its operational capabilities. By the end of 2019, China Re's gross written premiums reached approximately **CNY 142.6 billion**, marking a robust growth trajectory over the decade.

In 2018, China Re's solvency ratio was reported at **213%**, indicating a strong capital position, which is critical for its reinsurance operations. The company has maintained a diversified portfolio across various segments, including property, casualty, and life reinsurance.

As of June 2023, China Re's total assets exceeded **CNY 580 billion**, demonstrating consistent growth. The net profit for the first half of 2023 was recorded at **CNY 3.2 billion**, showcasing an upward trend compared to previous periods.

The company has also expanded its international presence, establishing subsidiaries and branches in key markets including Hong Kong, Singapore, and London. This strategic expansion aligns with its objective to tap into global reinsurance markets.

In recent years, China Re has increasingly focused on leveraging technology and data analytics to enhance underwriting processes and risk assessment capabilities. This initiative has been pivotal in adapting to the challenges posed by the evolving insurance landscape.

A Who Owns China Reinsurance (Group) Corporation

China Reinsurance (Group) Corporation, commonly known as China Re, is a leading reinsurance and insurance service provider in China. The ownership structure reflects a combination of state-owned and institutional shareholders, showcasing significant involvement from government entities.

The major shareholders of China Re are primarily institutional investors and state-owned entities. The largest shareholder is the China Insurance Group, which holds approximately 36.65% of the total shares. This significant stake emphasizes the state-controlled nature of the reinsurance sector in China.

Below is a detailed breakdown of the ownership structure as of the latest financial reports:

As of December 2022, China Re reported total assets of approximately RMB 585 billion (around USD 84 billion), which showcases the company’s significant size in the reinsurance market. The firm generated a total revenue of RMB 135.6 billion (approximately USD 20 billion) in the same period, reflecting its strong operational capabilities.

Furthermore, as part of its strategic growth, China Re has been actively pursuing international expansion and strengthening its presence in the global reinsurance market. This move includes partnerships and collaborations with foreign reinsurers, reinforcing its status as a major player in the global insurance landscape.

China Re's accreditations and strong credit ratings indicate its robustness in the reinsurance sector. The firm maintains a A (Stable) rating from major credit rating agencies, which reflects its sound financial health and operational profitability.

China Reinsurance (Group) Corporation Mission Statement

China Reinsurance (Group) Corporation, established in 1996, operates as the largest reinsurance group in China. The company's mission statement focuses on providing comprehensive reinsurance and risk management solutions while actively contributing to the development of the insurance industry in China and beyond. As of 2022, the group holds a total asset value of approximately RMB 703.5 billion (approximately USD 106 billion).

The mission emphasizes integrity, professionalism, and innovation, aiming to establish itself as a leading global reinsurance provider. The company’s operations encompass life and non-life reinsurance, with a dedication to enhancing service quality and professional capabilities.

In 2022, China Re recorded a gross written premium of RMB 148.7 billion (around USD 22.3 billion), reflecting a growth of 7.4% year-on-year. This growth is indicative of its ability to leverage its core competencies and market position effectively.

China Re's strategic goals align with environmental sustainability and corporate social responsibility. The company aims to achieve global standards in risk assessment and sustainability practices. Its focus on innovation has led to increased investments in technology, with an expenditure of RMB 2.1 billion (around USD 317 million) in tech-driven projects in 2022.

China Re's commitment to enhancing its risk management capabilities is evident through its diversified product offerings. In 2022, life reinsurance accounted for approximately 68% of total premiums, while non-life reinsurance represented 32%. This balanced portfolio assists in mitigating risks across different sectors.

In alignment with its mission, the company continues to invest in human capital, training over 4,200 employees to adapt to the evolving market demands and regulatory environment. Furthermore, China Re has established partnerships with over 100 international reinsurers, enhancing its global outreach and service capabilities.

As part of its strategic vision, China Re is poised to leverage its position as a state-owned entity to further penetrate emerging markets, anticipating an increase in demand for reinsurance services globally. The mission statement underpins the group's operational ethos, driving growth through adaptation, innovation, and sustainability.

How China Reinsurance (Group) Corporation Works

China Reinsurance (Group) Corporation, founded in 1996, is the largest reinsurance company in China. It operates primarily in the reinsurance sector, offering a wide range of products and services including property, casualty, life, and health reinsurance. The company plays a vital role in managing risk for insurance companies within China and internationally.

In 2022, China Re reported total revenues of approximately RMB 106.4 billion (around US$15.4 billion), up from RMB 95.8 billion in 2021. The growth reflects an expanding insurance market and an increasing need for risk management solutions.

China Re is structured into various segments, primarily comprising:

• Property & Casualty Reinsurance
• Life & Health Reinsurance
• Investment Operations

The company's property and casualty reinsurance segment accounted for about 60% of total revenue in 2022. This sector includes underwriting policies that protect against significant losses from natural disasters, accidents, and liabilities.

The following table summarizes China Re’s key financial performance metrics over recent years:

China Re has also focused on international markets, particularly in Asia, Europe, and the Americas. As of 2022, approximately 23% of its total premiums came from overseas clients, showcasing its commitment to expanding globally.

Investment operations contribute significantly to the company's profitability, with investment income reaching RMB 14.2 billion in 2022, a jump from RMB 12.1 billion in 2021. The investment portfolio mainly consists of fixed income securities, equities, and real estate, carefully managed to yield stable returns.

China Re is also known for its strategic partnerships and joint ventures. Notably, its collaboration with global reinsurance players enhances its risk-sharing capabilities and diversifies its product offerings.

In terms of market positioning, China Re holds a considerable share in the Chinese reinsurance market, estimated at around 40% in 2022, which underscores its dominance and critical role in the industry.

The company has maintained a robust financial strength rating, with ratings from international agencies reflecting its solid balance sheet and ability to meet policyholder obligations. A recent assessment by A.M. Best granted China Re a rating of A (Excellent).

Overall, China Reinsurance (Group) Corporation operates through a diversified model, leveraging its extensive market knowledge and innovative solutions to cater to the evolving needs of the insurance industry, both domestically and internationally.

How China Reinsurance (Group) Corporation Makes Money

China Reinsurance (Group) Corporation, commonly known as China Re, is a leading player in the reinsurance sector, generating revenue through various channels including reinsurance premiums, investment income, and asset management. As of the end of 2022, the company reported total revenues of approximately RMB 143 billion, showcasing its robust market position.

Reinsurance Premiums

The primary source of revenue for China Re is through the collection of reinsurance premiums. In 2022, the company wrote RMB 122 billion in gross reinsurance premiums, illustrating a year-on-year increase of 9.3%. This growth was driven by increasing demand in the Asia-Pacific region, particularly in property and casualty reinsurance.

Investment Income

Another significant contributor to China Re's profitability is its investment income. The company’s investment portfolio valued at around RMB 300 billion as of December 2022, yielded an investment income of RMB 20 billion in 2022, representing a return on investment (ROI) of 6.7%. This income primarily originates from fixed-income securities, equities, and real estate investments.

Asset Management

China Re also engages in asset management, offering services related to investment management and financial products to institutional and individual clients. In 2022, asset management revenues contributed RMB 3 billion to the overall earnings, reflecting a growth of 8.4% compared to the previous year.

Cost Management and Profitability

The company manages to maintain a healthy combined ratio of 95%, indicating effective cost management in relation to underwriting profits. This ratio has improved over the years, suggesting that the firm is adept at managing claims and expenses in line with its premium income.

China Re's net income for 2022 was reported at RMB 8 billion, with a net profit margin of approximately 5.6%. This demonstrates the corporation's ability to sustain profitability despite market fluctuations and increasing competition.

Market Position and Outlook

As of Q1 2023, China Re continues to maintain its position as the largest reinsurer in China, managing a market share of approximately 40%. Future growth is anticipated in sectors like cyber insurance and climate-related products, which are projected to gain significant traction.

The company has laid out strategies to expand its international presence, aiming for a more diverse geographical footprint that should contribute positively to its revenue streams in the coming years.