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July 22, 2016

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Chinese firms need overseas insurance

CHINESE companies will increasingly require insurance as they expand overseas and deal with a challenging Internet business model, insurance experts said yesterday.

The companies will face political and legal challenges abroad in mergers and acquisitions activities, which are set to break record this year, said Clare Wu, CEO of joint venture insurance brokerage Aon-COFCO.

Chinese companies sealed 176.45 billion yuan (US$26.4 billion) worth of mergers and acquisitions overseas in the first half of this year, close to the annual value of 193.7 billion yuan for the whole of last year, data from Zero2IPO showed.

“China’s state-owned companies and private ones are increasingly expanding overseas, and they have moved from developing countries to developed ones such as the US and those in Europe,” Wu said. “Such expansion exposes companies to risks that can be mitigated by insurance.”

Lu Qin, CEO of Aon Benfield China, said insurance companies “are lagging market demand in offering coverage” on new businesses resulting from the use of the Internet.


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