PICC Property and Casualty Company Limited (PICC P&C) has finalised new reinsurance framework agreements with its affiliates PICC Reinsurance and PICC HK.

The agreements will run from 1 January 2026 to 31 December 2026.

PICC Reinsurance and PICC HK are PICC P&C’s sister entities under ultimate parent PICC Group.

Under the arrangements, the three companies will engage in mutual cession and assumption of treaty and facultative business, with terms determined in line with prevailing market conditions.

Cession and assumption ratios will range from 0.1% to 80–100%. Commission rates will be capped at 45% for ceded business and 40% for assumed business.

PICC P&C said the terms were reached through arm’s-length negotiations and comply with all relevant regulatory requirements.

As the deals constitute continuing connected transactions under the Hong Kong Listing Rules, they will be subject to periodic reporting, annual review and any necessary public announcements. Independent shareholder approval is not required.

To safeguard fairness, PICC P&C has put in place internal monitoring mechanisms to ensure that the terms remain comparable to those offered by independent third parties.

The company has set annual caps for premiums ceded to PICC Reinsurance at 6.5 billion yuan ($929m), and commission payments at 2.9 billion yuan ($414m). These limits were set with reference to projected premium growth and historical transaction data.

PICC P&C said one rationale for entering into the agreements with PICC Reinsurance is to diversify its risk exposure and support more stable operations.

After reviewing the arrangements, the board, including independent directors, concluded that the transactions will be conducted on normal commercial terms in the ordinary and usual course of business.

The board also considers the terms and annual caps to be fair and reasonable, and believes the agreements are in the best interests of the company and its shareholders as a whole.