Following the December 2016, approval by the Chinese Insurance Regulatory Commission, China Cosco Shipping Corporation’s captive insurance unit China Cosco Shipping Captive Insurance Company began business operations last Friday.
As the first such shipping captive insurer in China, the new unit has been set up to provide a range of insurance services for China Cosco’s affiliate businesses.
CCSCIC is another manifestation of China Cosco’s 6+1 industrial cluster strategy, which includes shipping, logistics, finance, equipment manufacturing, real estate and Internet Plus innovative business.
Meanwhile, one result of the merger of Cosco and China Shipping last year was a new shipping entity that had ships entered in no less than 10 international P&I Clubs.
As a result of the new arrangement there will be some major winners and losers among the Clubs at the just completed P&I renewal. China Cosco operates 1,114 vessels with a capacity of 85.3m dwt. Its containership fleet amounts to 1.58m teu, making it the fourth largest in the world, with more than 500,000 teu due to be added from the orderbook.
The group’s dry bulk fleet is curently 365 vessels or 33.5m dwt. The tanker fleet is 120 vessels or 17.85m dwt.
Rationalisation was clearly a priority. According to the market another important consideration was the desire to work far more with China Shipowners Mutual Assurance Association (China P&I). The result has been a culling of international P&I Clubs providing cover for the merged unit from 10 to five, the condition being that the surviving Clubs offered reinsurance or coinsurance terms to the Chinese mutual.
Despite years of lobbying for membership of the International Group, China P&I remains a domestic provider of P&I cover to members of the Chinese fleet.