On December 24, 2013, CNPC Captive Insurance Co., Ltd. officially received the approval of the CIRC to commence operations. The company's legal representative is Yu Yibo. The company will mainly engage in property damage insurance, liability insurance, credit insurance, surety insurance, short-term health insurance and accident insurance within the CNPC group,reinsurance of the above business, and the use of insurance funds as permitted by laws and regulations.
It is reported that CNPC Captive Insurance is positioned as CNPC's risk management platform and insurance arrangement tool. It will effectively integrate CNPC's insurance industry and related resources, establish long-term strategic cooperative relations with external insurance institutions, and mitigate the group's risks at lower cost and with less outlay. Going forward, the captive insurer will focus on supporting the development of CNPC's core business, providing CNPC with comprehensive and effective risk management decision support, risk management consulting and insurance arrangement services.
To date, the captive insurer has developed 29 insurance products across eight categories, including enterprise property insurance, engineering insurance and energy insurance, and has participated in CNPC's 2014 master insurance programme covering liability insurance, enterprise property insurance, special oil risks insurance, and engineering insurance for large oil and gas construction projects. The functions of the risk management platform have begun to emerge. In less than 3 months, the captive insurer has underwritten 85 policies, generating premium income of RMB 120 million.
At present, all of China's "three oil majors" have captive insurers: those of CNOOC and Sinopec are registered in Hong Kong, while only CNPC's captive is registered in mainland China. So far, these three companies are also the only Chinese multinational enterprises to have established captive insurers. The establishment of captives by the "three oil majors" will open the curtain on the development of professional captive insurers in China. It is inevitable that large multinational corporations will establish captive insurers, and more and more companies will adopt this model to mitigate risks in the future.