China Banking and Insurance Regulatory Commission (CBIRC) has approved a new state-backed agricultural reinsurance firm, according to a report by the state-owned Xinhua News Agency.

The new reinsurance company reportedly has a registration capital of CNY16.1bn ($2.34bn).

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It is said to be co-established by nine shareholders including the Ministry of Finance, China Reinsurance Group, and Ping AnProperty & Casualty Insurance.

The firm will look to expand the insurance coverage of catastrophe losses and to increase the protection for agricultural production in the country.

The move is said to follow the government’s efforts to bolster financial services to strengthen rural vitalisation, which involves measures to improve the agricultural reinsurance system.

Meanwhile, China is said to be the first country globally to post positive economic growth during the Covid-19 pandemic.

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The country is expected to be increasingly favoured by foreign insurers this year with forecasts indicating that it is set for continued expansion of life and non-life insurance.

In July, it was reported that China is moving towards decentralising the supervision of its $3.1trn insurance industry in a bid to boost efficiency.

As part of the move, CBIRC issued new guidelines that will provide local regulators with more power to oversee parts of the insurance sector.

Recently, American electric vehicle and clean energy company Tesla set up an insurance broking firm in China to offer insurance to Tesla owners in the country.