Titans launch online insurance company

By Chen Tian Source:Global Times Published: 2013-11-6 23:13:01

Ma Huateng, CEO of Tencent

Ma Huateng, CEO of Tencent

 Jack Ma Yun, founder of Alibaba

Jack Ma Yun, founder of Alibaba

Ma Mingzhe, chairman of Ping An Insurance

Ma Mingzhe, chairman of Ping An Insurance

Photos: CFP

Source: Compiled by GT
Graphics: GT

Source: Compiled by GT Graphics: GT

China's Internet service and insurance titans co-launched the country's first online insurance company Wednesday, indicating that the booming Internet-based financial service market is further expanding, analysts said.

Zhong An Online Property Insurance Co was co-established by China's e-commerce giant Alibaba Group, Internet service titan Tencent Holdings and the world's second-largest insurer by market value, Ping An Insurance (Group) Co of China.

Zhong An, with a registered capital of 1 billion yuan ($164 million), has received intense media attention since it was approved by the China Insurance Regulatory Commission in late September. The company is the first online insurer that has obtained a license to operate in China.

"Zhong An needs to take advantage of both the online and brick-and-mortar business environment," Ma Huateng, CEO of Tencent Holdings, said at a press conference at Shanghai's Fudan University Wednesday.

"Although Zhong An works online, we would not be able to get the license and start our businesses so quickly without Ping An's cooperation offline," he said.

Alibaba Group, headed by Jack Ma Yun and which operates China's largest online payment platform Alipay, owns a 19.9 percent stake in Zhong An. Tencent Holdings, which runs popular instant messaging services QQ and WeChat, has a 15 percent stake and Ping An, led by Ma Mingzhe, has another 15 percent.

Jack Ma Yun, Ma Huateng and Ma Mingzhe, dubbed the "three Mas," are considered moguls in their respective fields, making Zhong An a highly anticipated joint venture.

The first line of products, which will be credit and liability insurance covering e-commerce and mobile payment methods, are to be launched in early December, Yin Hai, Zhong An's CEO, was quoted by China Business News as saying on Wednesday.

Yin said the first line will be "innovative products" with low premiums, and the sales channel "might involve e-commerce platforms other than the company's shareholders."

According to records published by the Shanghai Administration for Industry and Commerce, Zhong An, which will be headquartered in the city's Huangpu district, plans to offer "enterprise/family property insurance, cargo insurance, liability insurance and credibility insurance."

None of the company's leaders specified details of Zhong An's products, leaving many established insurers worried that their businesses might be challenged.

However, Zhang Meng, an analyst from Analysis International, told the Global Times Wednesday that Zhong An will not steal business from traditional insurers because it will offer a distinct set of products.

"Instead of selling traditional life and health insurance, Zhong An will offer insurance which protects its clients' virtual assets, such as Tencent's Q coins, or ensures that couriers safely deliver products sold in online stories," Zhang said.

The company's website said it will "not only provide exiting insurance products, but also offer entrepreneurs and other participants of the e-commerce market a comprehensive solution to reduce risks in the digital economy environment."

Wang Weidong, a third-party payment analyst with iResearch, told the Global Times Wednesday that Zhong An and offline insurers will "cooperate to establish a more complete insurance market."

Alibaba is a veteran online payment service provider, while Tencent has a huge customer base containing millions of social network users, Wang said.

Ping An has rich experience in insurance products management, he said. "It is a strong alliance that will likely produce good results."

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