JLT poised for talks with Beijing over office closure
Jardine Lloyd Thompson (JLT), Britain's largest quoted insurance broker, is to meet with the China Insurance Regulatory Commission (CIRC) next week in a bid to learn more details of the surprise closing of its Beijing representative office in September.
JLT chief executive Ken Carter said he was still unsure why the office - which trades under the name Jardine Insurance Brokers (JIB) - was closed. He said the group's representative office in Guangzhou remained open.
The CIRC reportedly banned JIB's chief representative Wang Jiacong from broking operations, and said the action was part of an industry-wide effort to purge the non-life insurance sector of alleged widespread unlicensed broking activities.
British-based insurance broker Sedgwick has also faced the wrath of the CIRC, although it has now been allowed to resume operations.
New World Infrastructure also reportedly was compelled to stop broking activities on the mainland.
Mainland authorities have not licensed any foreign companies to undertake insurance broking, although Sedgwick was granted a licence allowing it to act in a consultative role.
Xinhua reported JIB had illegally lowered its underwriting requirements, enlarged insurance obligations and engaged in improper re-insurance activities. It said these actions had added to management risks at insurance firms and severely disturbed the insurance market.
Mr Carter said the JIB offices on the mainland were representative offices, and so the Beijing closure did not represent any loss of brokerage income to the JLT group.
JLT, which is 34 per cent owned by Jardine Matheson, yesterday reported a 3 per cent rise in pretax profits to GBP63.3 million (about HK$790.31 million), on turnover up 8 per cent to GBP250 million.
In Asia-Pacific, turnover rose marginally to GBP47.8 million last year, but pretax profits were down to GBP6.6 million from GBP8.6 million in 1998.