BEIJING -- China Reinsurance (Group) Corp (China Re) said Thursday it had successfully issued a catastrophe bond on the international market, becoming the first Chinese company to do so.

The bond was issued Wednesday through Panda Re, a special purpose vehicle set up in Bermuda, [Offshore Company Incorporation]to raise $50 million to cover risks incurred from earthquakes in China, China Re announced.

The sponsor of the bond is China Property & Casualty Reinsurance Co., Ltd. (China Re P&C), a wholly-owned subsidiary of China Re, the country's only state-owned reinsurer.

"China made the first step toward linking domestic insurance risks to the international capital market," said Li Peiyu, chairman of China Re.

Part of the earthquake insurance underwritten by China Re and its subsidiary was ceded to Panda Re, which then sought financing for the coverage on the bond market.

The issuance marked the country's "breakthrough" in securing insurance risks, paving the way for a diversified risk-sharing mechanism for catastrophe insurance by making use of the capital market, China Re said in a statement.

China is speeding up efforts to establish a catastrophe insurance system to protect life and property against natural disasters such as earthquakes, floods and hurricanes. [Company Registration in USA]Due to the large sum of indemnities the insurers have to pay in case of a disaster, risk-sharing is key to such a system.