Opinion | The very curious case of the disappearing reinsurance deal
Shareholders deserve an explanation for why details of a prominent agreement between AIG and PICC P&C have evaporated from view
How can a continuing business worth billions of dollars a year disappear from the public record of a listed company overnight?
From 2003 onwards, PICC Property and Causality (PICC P&C) has been reinsuring a significant portion of its premium with American Insurance Group (AIG). That is the result of an accord in return for AIG's investment in the former's initial public offering in 2003.
Once boosted as a vote of confidence, the deal has not been included in any PICC P&C's public documents since 2007. Neither is there much trace of it in the prospectus of its parent PICC Group this week.
What's the big deal, some may wonder. Given the size of the mainland insurer, the deal probably accounts for only a few per cent of its total business. But if this can disappear overnight, what else can?
To see the significance, one needs to know the details. Between 2004 and 2006, the co-operation with AIG had high-profile disclosure in the company's annual reports.
The detail and size of the reinsurance business with AIG were disclosed under three headings: related party transactions; material contracts and business with the five largest reinsurers.
