Shanghai's role key as supplier of institutional innovation

City's international reinsurance exchange, which became operational in December, is latest success story

An aerial view shows skyscraper clusters in Lujiazui, a cutting-edge financial center and bustling commercial district in Shanghai, on Aug 23. LI JUNQIN/FOR CHINA DAILY

As Chinese companies expand their reach amid the advancement of strategies like the Belt and Road Initiative, demand for new financial services has risen, including reinsurance, or, insurance provided to insurers.

According to Chang Ming, assistant to the general manager of the Shanghai International Reinsurance Exchange, reinsurance is the risk buffer for companies' overseas operations. When enterprises face higher risks such as natural disasters and legal risks in overseas markets, the policy limits are often large, making it difficult for a single insurer to bear all the risks alone. In that case, reinsurance is important to diversify risk, he said.