China’s First Online Insurer Wins Approval
The China Insurance Regulatory Commission (CIRC) has given its approval for China’s first online insurer, Zhong An Online Property Insurance, to begin operations.
Zhong An is a venture formed by the country’s second-largest insurance group, Ping An; electronic commerce (e-commerce) group Alibaba; and social network firm Tencent. With registered capital of around US$163m, Zhong An provides online nonlife products including commercial and personal property, cargo, liability and credit insurance, according to the CIRC.
A statement issued by Zhong An noted that the internet has become a popular distribution and business platform for financial services including banking, insurance and mutual funds in China. The insurer aims to attract consumers with active engagement on social networks, e-commerce and online shopping via online platforms. However, online is still a fledgling vehicle for insurance distribution, with agents still the major channel in China.
Domestic insurers seek to either develop their own electronic and mobile commerce or form partnerships with other online trading companies to enlarge their market coverage. Ping An and PICC Property and Casualty, which is China’s largest nonlife insurer, have employed diverse approaches to broaden their businesses.
Alibaba, China’s largest internet company, is the largest shareholder of Zhong An and got the go-ahead in February to set up the new insurance venture. Ping An will be able to target China’s growing community of internet and mobile users in while Alibaba provides its large client base with value-added insurance services backed by Ping An’s experience in product design, pricing, service and claims, the companies said.