State-controlled Chinese insurance company People’s Insurance Company of China (PICC) is on the brink of accessing Lloyd’s via its own syndicate, it has emerged.

A delegation from the non-life giant’s senior management is due to travel to London in March to formalise the agreement which will see PICC set up a new syndicate, although it is believed they are also in talks to potentially acquire an existing operation, a well-placed source told Insurance Times.

The move comes after Lloyd’s management discussed the potential for the establishment of the syndicate with the insurer during a recent trip to China.

PICC is ranked by Forbes as one of the world’s 20 biggest insurance groups, and its commercial customers include some of China’s largest enterprises, many of which have complex operations in multiple foreign jurisdictions.

The underwriter, which has an office in London already, has links with Lloyd’s. In 2015, Lloyd’s China, Tokio Marine Kiln (TMK) and PICC signed a Memorandum of Understanding to provide intellectual property (IP) infringement liability insurance in China, marking the first ‘white labelling’ product development agreement in the region.

International expansion

It has long sought efforts to expand internationally. In November 2017 it entered into a 10-year strategic cooperation agreement with the Chubb Insurance group designed to provide PICC’s customers and other Chinese-affiliated companies around the world access to Chubb’s global capabilities.

A market source told Insurance Times: “The potential for PICC to enter Lloyd’s in its own right has been under discussion for some time. The prospect moved forward considerably when a senior delegation from Lloyd’s travelled to China recently. PICC expressed its interest and now the insurer’s senior leadership will be in London in March to formalise the move.”

Whether the syndicate will be a new entity has yet to be confirmed as it is believed there are syndicates which would be available for acquisition, and it remains an option at present. Although there are no details as to whether PICC is in talk with any managing agents, and if so how advanced those talks are.

“It makes sense for both PICC and Lloyd’s,” said the source. “PICC is looking for further international expansion and a Lloyd’s syndicate provides access to new markets. For Lloyd’s it creates the potential for further access into the Chinese market and PICC have the scale and an appetite which will aid the market in attracting new risks.”

Lloyd’s did not respond to Insurance Times’ request for comment at the time of publication.