The Significance of Zijin Mining's Captive Insurer in Singapore and Its Implications for China's Manufacturing Industry

Contents

Background: Zijin Mining's Globalization and Risk-Management Needs

Basic Profile of Zijin Mining Insurance (Singapore)

Background and Drivers of the Establishment

Management Model and Operating Architecture

Risk Retention and Underwriting Structure

Strategic Significance for Zijin Mining Group

Implications for China's Manufacturing Industry

Policy Recommendations and Rollout Path

Core argument: In 2023 Zijin Mining established a wholly owned captive insurer in Singapore (ZIJIN MINING INSURANCE (SINGAPORE) PTE. LTD.), marking a shift by the global mining group from passively purchasing commercial insurance to actively building its own risk-transfer platform. The move provides tailored cover for Zijin's mining projects across 17 countries and offers a replicable model for Chinese manufacturers going global: where commercial insurance is scarce or expensive, building a corporate captive through mature captive centres such as Hong Kong and Singapore is a practical route to greater risk resilience and lower total cost.

01  Background: Zijin Mining's Globalization and Risk-Management Needs

Understanding the rationale for the captive first requires an appreciation of the scale and nature of the risk exposure faced by Zijin Mining as a global mining group.

1.1 Overview of the global footprint

Zijin Mining Group Co., Ltd. (601899.SH / 2899.HK) is a large multinational mining group focused on mineral resource exploration and development, ultimately controlled by the Shanghang County Finance Bureau of Fujian Province. Through three strategic upgrades—development of the low-grade Zijinshan gold-copper mine, national expansion, and globalization—the company has become one of the world's top five gold producers and top ten copper producers.

1.2 Scale of overseas risk exposure

At the end of 2025, Zijin Mining's overseas assets totalled approximately RMB 220 billion, about 43% of group total assets; overseas revenue reached RMB 241.2 billion, 69.1% of total revenue; and overseas operations contributed close to 60% of group profit. Overseas business has become the core growth engine, but it also represents a large cross-border risk exposure.

1.3 Core risk categories in mining

The commercial insurance protection gap

According to Marsh, mining companies recover only 45%–55% of losses through commercial insurance, well below the 75% typical of the renewable-energy sector. Tailings-dam liability, business interruption and other mining-specific risks are unattractive to commercial insurers or very expensive, resulting in a clear market failure.

02  Basic Profile of Zijin Mining Insurance (Singapore)

Clarifying the captive's legal identity, regulatory framework and business scope provides the basis for the analysis that follows.

2.1 Company profile

2.2 Relationship with the domestic “Zijin Insurance”

No connection between the two “Zijin” insurers

Zijin Property & Casualty Insurance Co., Ltd. (Zking Insurance) is a Jiangsu provincial state-owned financial institution controlled by the Jiangsu Provincial People's Government. It sells property insurance to the public and has no overseas insurance entity. Zijin Mining Insurance (Singapore) is a wholly owned captive of Zijin Mining Group and covers only intra-group risks. Apart from sharing the name “Zijin”, the two companies have no equity, business or management relationship.

2.3 Business boundary

Under MAS rules, a captive insurer may only underwrite the risks of its parent and affiliated companies. Zijin Mining Insurance (Singapore) therefore cannot sell insurance to the public or to third parties; it functions as an intra-group risk-financing and risk-management vehicle.

03  Background and Drivers of the Establishment

The decision to establish the captive in Singapore in 2023 resulted from the convergence of industry, corporate and policy factors.

3.1 Industry driver: market failure in mining risk cover

Mining is a high-risk, capital-intensive and long-cycle industry. Commercial insurance displays systemic gaps: limited cover (only 45%–55% of losses), high premiums for specialist lines such as environmental liability, and an almost complete absence of products for tailings dams and geological hazards. In hard market cycles premiums spike while cover shrinks. The world's major miners—BHP, Rio Tinto, Glencore and others—all operate captive insurers; a captive is a standard component of a global mining group's risk architecture.

3.2 Corporate driver: upgrading risk management during rapid globalization

Around 2023 Zijin Mining was in an accelerated phase of global expansion: overseas assets exceeded 40% of the total, overseas operations contributed more than 60% of profit, and projects spanned more than 15 countries. Insurance was still purchased project by project from commercial insurers, with no unified platform for risk transfer or management—an inadequate structure for cross-border, multi-currency and multi-jurisdictional risks.

3.3 Policy driver: a mature Singapore captive ecosystem

Advantages of the Singapore captive centre

Asia's largest captive insurance centre, with about 90 licensed captives

A clear and well-enforced regulatory regime administered by MAS

A 10% concessionary tax rate on qualifying offshore insurance business

A global reinsurance hub with deep reinsurance capacity

No time difference with China, English-speaking environment, free movement of capital

Parallel development of the Hong Kong captive centre

Nine licensed captives as at July 2026

CGN, SAIC, SF Express and CNNC among recent entrants

50% profits-tax concession

Together with Singapore, forming an Asia-Pacific dual-hub structure

Zijin Mining had already established Zijin (Singapore) International Capital Co., Ltd. as its overseas financing platform, providing an on-the-ground operating base and banking relationships (credit facilities with CCB Singapore, Bank of China Singapore and OCBC, among others).

04  Management Model and Operating Architecture

The Singapore captive uses the typical “wholly owned captive plus professional third-party management” model, with Aon providing the full operational service.

4.1 Governance architecture

Zijin Mining Group is the sole shareholder and sets strategy, capital and risk appetite. The board of the captive—composed of Zijin-appointed directors and independent directors—approves underwriting decisions and reinsurance arrangements. Aon Insurance Managers (Singapore) runs day-to-day operations under a management agreement.

4.2 Services provided by Aon

4.3 Layered decision-making

Strategic level (group / board): risk-appetite setting, capital injections, retention adjustments and approval of major reinsurance programmes

Operating level (Aon team plus Zijin risk and finance functions): routine underwriting, claims handling and treaty renewals

Execution level (Aon Singapore team): policy issuance, claim payments and regulatory filing

Note: The “wholly owned captive plus professional third-party manager” structure is the dominant operating model among Singapore's roughly 90 captives. It preserves the parent's control over risk strategy while drawing on the manager's operational capability, reducing the cost of building an in-house team.

05  Risk Retention and Underwriting Structure

Because individual captive financials are not publicly disclosed in Singapore, the following analysis is derived from standard market structures, Aon's captive-management framework and mining-industry benchmarks.

5.1 Layered risk-bearing structure

A captive's core design is the layered assumption of risk, not the assumption of all risk. Following common global mining captive structures and the PetroChina model of roughly 60% captive and 40% commercial, the retention architecture is broadly as follows:

5.2 Key parameter estimates

5.3 Underwriting mix by line

5.4 Premium and profitability estimates

Data limitation: all figures above are estimates based on industry benchmarks. MAS exempts captive insurers from public financial disclosure, so the actual premiums, profits and balance sheet of Zijin Mining Insurance (Singapore) are not publicly available. Precise figures can be obtained by purchasing its annual financial statements from ACRA Bizfile (UEN 202335175N).

06  Strategic Significance for Zijin Mining Group

The captive is not a simple substitute for buying insurance but core infrastructure for the group's global risk-management system.

6.1 Six sources of value

6.2 Estimated value creation

Benchmark: PetroChina's dedicated P&C insurer

PetroChina Specialised Property & Casualty Insurance, established in 2013, writes about 60% of the group's insurance programme. It has been profitable every year and has saved the group more than RMB 10 billion in premiums, earning it the nickname “cash cow”. Zijin's captive is much smaller, but the logic of value creation is the same.

6.3 Strategic positioning

The captive plays four roles: a risk-protection platform filling commercial gaps and providing tailored cover for global mines; a cost-optimization platform capturing premium savings, tax benefits and investment returns; a risk-management platform building data, analytics and professional capability; and a global-coordination platform linking Singapore's reinsurance market to the group's mining assets.

07  Implications for China's Manufacturing Industry

Zijin's experience offers a replicable risk-management paradigm for the many Chinese manufacturers now investing overseas.

7.1 The risk predicament of “going global” manufacturers

China's outward direct investment reached USD 181.2 billion in 2024, with manufacturing accounting for a rising share. Yet many manufacturers face the same difficulties Zijin faced before establishing its captive:

Limited availability of cover: political, security and environmental risks in host countries are beyond the overseas underwriting capacity of domestic insurers, while international insurers often misjudge Chinese corporates

High cost: international markets price Chinese corporates 30%–50% higher than peers on some lines

Fragmented risk management: each overseas subsidiary buys cover separately, weakening bargaining power and preventing loss-data accumulation

Slow claims service: long cross-border claims processes, language barriers and legal differences delay recovery

7.2 Four transferable lessons

7.3 Which manufacturers are suited to a captive

7.4 Benchmark cases

Among these, the captives of Shanghai Electric and SAIC are the most directly relevant to other manufacturers, while SF Express—the first captive established in Hong Kong by a mainland private enterprise—provides a template for private manufacturers.

08  Policy Recommendations and Rollout Path

Recommendations at enterprise, regulatory and policy levels to promote the captive model in support of manufacturing companies going global.

8.1 Recommendations for manufacturers

Assess the risk exposure: systematically map the group's global risk types, scale and geography, and assess whether premium spending reaches the economic threshold for a captive (generally above RMB 100 million a year).

Start in Hong Kong: Hong Kong offers a mature ecosystem, proximity to the mainland and a 50% profits-tax concession, making it the natural first testing ground.

Adopt a phased approach: bring selected lines such as property and liability into the captive first, then expand as experience and loss data accumulate.

Use a professional captive manager: appoint Aon, Marsh or WTW initially, and consider an in-house team only when scale justifies it.

Build a group risk-data platform: standardize the collection and analysis of loss data across business units to provide an actuarial basis for pricing.

8.2 Recommendations for regulators

Improve the domestic captive framework: only four captives currently operate onshore and the rules need refinement; clarify business scope, capital requirements and reinsurance rules for captives.

Support the Hong Kong captive centre: facilitate cross-border capital flows, tax credits and reinsurance settlement for mainland enterprises establishing captives in Hong Kong.

Develop local captive-management capability: encourage large domestic brokers to offer captive-management services and reduce reliance on foreign managers.

Promote industry data sharing: establish an industry loss database to improve the actuarial soundness of captive pricing.

8.3 Rollout path

The rollout should proceed in waves: large resource and energy groups (mining, oil and gas, power) where the model is already proven; large equipment manufacturers such as Shanghai Electric and SAIC, which are now moving ahead; large construction and chemical groups, where engineering and environmental liability needs are greatest; automotive, electronics and other manufacturers with product-liability and supply-chain exposures; and finally group captives for SMEs organized by industry associations.

8.4 Conclusion

Zijin Mining's Singapore captive represents a capability upgrade and strategic fill for a global mining group—from passively buying insurance to actively managing risk, and from fragmented purchasing to centralized coordination. For Chinese manufacturers accelerating their global expansion, the model has broad relevance: where commercial insurance is scarce and costly, building a corporate captive through mature centres such as Hong Kong and Singapore is a practical path to stronger global risk resilience, lower total cost and greater international competitiveness. As the policy environment improves and practice accumulates, captive insurance is likely to become a standard tool in the globalization of China's manufacturing industry.

 注：由于新加坡自保保险公司个体财务数据不对外公开，以上分析基于行业标准模式、怡安自保管理框架及矿业行业基准进行系统性推演，并非来源公司实际经营数据。