Fosun Group, the Chinese private conglomerate, has unveiled a reinsurance subsidiary to tap into Asia's "underdeveloped" market.

The new reinsurer, Peak Reinsurance Co Ltd, is Fosun's fourth investment in the insurance sector, and is part of the Shanghai-based company's ambition to build itself into a global business empire that combines industry, investment and insurance.

The establishment of Peak Re marks the introduction of China's second reinsurer.

Fosun has launched the new venture in partnership with International Financial Corp, a member of the World Bank Group, which invested $81.95 million for a 14.9 percent stake. Fosun has invested $468.05 million to hold 85.1 percent of the stock.

The new company will function as an insurer for insurance companies, providing non-life reinsurance policies for insurers to reduce their risk exposure.

Peak Re's only competitor in the nation is the State-owned enterprise China Reinsurance (Group) Corp.

"We want Peak Re to be the industry leader in the Asia-Pacific region, where the insurance and reinsurance sectors are underdeveloped," said Wang Qunbin, Fosun Group's president, who will serve as the new company's chairman.

Asia remains generally underinsured in terms of non-life insurance.

Less than 22 percent of the total economic loss caused by natural disasters in Asia was insured in 2011, while comparable figures in the US stood at around 63 percent and Europe at 50 percent, according to Peak Re.

In China, it is estimated that just $1 billion of the $50 billion losses caused by the once-in-a-decade floods of 2011 were covered by insurance.

Industry veteran Franz Hahn will be in charge of Peak Re's daily operations, serving as chief executive officer, while Eckart Roth, formerly global risk officer for White Mountains Re, has been named chief underwriting officer.

The new company got off to a quick start, after officially starting operations on Dec 28, amassing more than 20 clients and striking a deal with China Pacific Insurance Group, one of China's biggest insurers.

Most of those clients are from the Chinese mainland, but the company plans to expand into other Asian emerging markets, particularly India and Indonesia, over the next five years, officials said.

Wang added that premiums collected by the new company will fund Fosun's investment activities.

Fosun has been actively investing overseas in recent years, as part of its plan to be a global investor.

The Financial Times recently suggested the company had $1 billion to fund its international ambitions.

Fosun paid 44 million euros ($57.4 million) in 2010 for a 9.72 percent stake in Club Med. The French resorts operator, in which Fosun is the largest shareholder, returned to the black last year.

In May 2011, Fosun also bought a 13.4 percent stake in the Greek luxury retailer Folli Follie Group SA for 106 million euros.

Hahn said easier regulatory controls on insurers' investment portfolios are part of the reason Fosun chose Hong Kong over the Chinese mainland as the location for the new company's headquarters.

gaochangxin@chinadaily.com.cn