R&SA, MITSUI SUMITOMO, GAIN INCORPORATION LICENCES IN CHINA

UK-based Royal & SunAlliance (R&SA) and Japan-based Mitsui Sumitomo Insurance have been granted permission by the Chinese Insurance Regulatory Commission to launch wholly-owned non-life insurance subsidiaries in China. Both the insurers will turn their Shanghai branches into  wholly owned subsidiaries. R&SA said that the capital of the operation would be raised to 240m yuan ($31.7m) from the current 100m yuan. Following the incorporation, branches would be opened in Beijing and in Guangzhou. R&SA said that it would appoint Mike Jakeman as CEO of R&SA Greater China, and that the conversion process should be completed before December. R&SA established representative offices in Beijing, in 1992, in Dalian in 1994 and in Shanghai in 1995. Since 1999 the Shanghai branch has focused on foreign and joint venture commercial insurance segments. It employs about 90 staff and in 2006 had net written premiums of about $12m. Mitsui, which formed its Shanghai branch in 2001 and which has representative offices in nine Chinese mainland locations, said that the branch would be renamed Mitsui Sumitomo Marine & Fire Insurance (China) Co Ltd. Following the incorporation of the Shanghai branch, the representative offices would be converted into branches, the company said. The move by the CIRC follows approvals issued last week to Liberty Mutual and AIU to establish similar local incorporations. Mitsui said that one advantage of local incoporation was that it reduced the required level of capital allocation. Standalone branches require a deposit of 200m yuan each time, while branches of locally incorporated subsidiaries only require a deposit of 20m yuan, the insurer said.