Shanghai's position as the major financial center in China enticed Lloyd's to pick it as the location of the new operation, he added. Lloyd's will also keep its Beijing representative office which it set up in November 2000 to maintain the strong ties it has developed in the market there.

China allowed Lloyd's to establish onshore reinsurance operations in the world's fastest-growing major economy in November 2005.

Before the green light, Lloyd's was allowed to provide foreign currency in an off-shore capacity for Chinese insurers.

The firm has been supporting Chinese insurers in areas such as marine, aviation, energy and nuclear power risks since the 1970s.

Lloyd's, based in London, is the world's leading specialist insurance market, home to 46 managing agents and 66 syndicates.

Lloyd's is not an insurance firm but a society of members, both corporate and individual, which underwrites in syndicates and on their behalf professional underwriters accept risks.

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