The Shanghai International Group (SIG), a large State-owned financial holding group, is leading the four-year run-up to the launch of the Shanghai Insurance Exchange (SIE) into a substantive stage.

SIG has transferred its stakes in two insurance companies to avoid direct investment in insurance equities, convincing the public that it is qualified to take the helm in such preparation work.

According to plans, SIE will allow the transfer of reinsurance and life insurance policies. Property and casualty policies, liability insurance, group life insurance, and major reinsurance programs between insurance companies as well as between insurers and reinsurers can be listed and traded on the trading platform.

Term life insurance policy holders who want to withdraw from the insurance program, but are unwilling to surrender their insurance policies to the insurance company, have the option to transfer them on the trading platform.

A mature insurance exchange will also facilitate trading of insurance derivatives such as risk securitization products and catastrophe options and bonds.