Lloyd’s has been given permission to establish a reinsurance operation in China. The market says the onshore licence will give it an important strategic foothold in the world’s fastest-developing insurance market.

The licence has been a long time coming, with the market establishing a representative office in Beijing five years ago. Lloyd’s Chairman Lord Levene thanked UK Prime Minister Tony Blair “for his strong personal support on this issue over a long period”.

The announcement granting the licence was made last week by Chinese President Hu Jintao during his state visit to Britain.

Worldwide Markets Director Julian James says China’s demand for infrastructure “as well as growing property ownership and an increasing awareness of legal and property rights” are combining to underpin increasing demand for specialist insurance products.

“Lloyd’s has been supporting Chinese insurers with specialist reinsurance capacity and expertise for over 30 years in areas such as marine, aviation, energy and nuclear power risks, but in a limited, offshore capacity,” he said.