Shanghai eyes shipping insurance

The Yangshan port area in the Shanghai free trade zone. A shipping insurance association is being organized there as the city seeks to become a global shipping and logistics center. Pei Xin / Xinhua

Insurance companies aim to form a shipping insurance association by year-end in Shanghai, part of the city's master plan for becoming a global financial and logistics center, an official said.

"It's very difficult to develop international trade without insurance. You have to insure the ship before it hits the water and navigates, and international cargo should be insured, too, before leaving," Pei Guang, head of the Shanghai bureau of the China Insurance Regulatory Commission, told a forum on Sunday.

Pei said that although China's international trade has grown rapidly in recent years, its insurance sector has lagged and doesn't meet the needs of the world's second-largest economy.

By contrast, the revenue of Japan's trade-related insurance sector accounts for 10 percent of the world's total, although the nation generates only 5 percent of global trade. Japan has been able to attract other countries to sign shipping insurance agreements there via its complete insurance services.

"We're pushing the development of shipping insurance by inviting more companies to set up centers in Shanghai. We are also pursuing the formation of a shipping insurance association," Pei said. The goal is for the nation's shipping insurance to be accepted globally.

"Our efforts will eventually pay off, as the shipping insurance association will officially launch by the end of the year," Pei added.

Building on the initiatives of the shipping insurance operation centers of the People's Insurance Co (Group) of China, China Pacific Insurance (Group) Co Ltd and Ping An Insurance (Group) Co, the CIRC's Shanghai bureau started preparatory work for the association in January.