JD eyes move into on­line in­sur­ance

China Daily - - BUSINESS - By FAN FEIFEI fan­feifei@chi­

Com­pe­ti­tion in China’s fast­grow­ing on­line in­sur­ance in­dus­try is in­ten­si­fy­ing as the na­tion’s in­ter­net gi­ants are in­vest­ing heav­ily in the lu­cra­tive sec­tor.

JD will in­vest 536.6 mil­lion yuan ($85.4 mil­lion) for a 33.3 per­cent stake in the China unit of global in­sur­ance giant Al­lianz SE, fur­ther­ing its push into the fi­nan­cial sec­tor.

The in­vest­ment will make JD the sec­ond largest share­holder in Al­lianz China Gen­eral In­sur­ance Com­pany Ltd, the in­sur­ance com­pany said in a fil­ing for reg­u­la­tory ap­proval on Mon­day.

“Al­lianz and JD have en­tered into a long-term part­ner­ship to de­velop a dig­i­tal in­sur­ance joint ven­ture in China. We ex­pect this type of in­sur­ance to give con­sumers even greater con­fi­dence when buy­ing on­line,” JD said in a state­ment.

The in­vest­ment in the Al­lianz unit comes as Chi­nese tech com­pa­nies are po­si­tion­ing them­selves in the on­line in­sur­ance mar­ket, in­clud­ing in­ter­net gi­ants Alibaba Group Hold­ing Ltd, Ten­cent Hold­ings Ltd and Baidu Inc.

JD’s in­vest­ment is sub­ject to ap­proval from the China Bank­ing and In­sur­ance Reg­u­la­tory Com­mis­sion, Al­lianz said.

“JD has ramped up its ef­forts in the in­ter­net fi­nan­cial sec­tor, such as pro­vid­ing credit prod­ucts and wealth man­age­ment ser­vices, and ac­cu­mu­lated abun­dant en­ter­prise cus­tomers. It plans to move into the on­line in­sur­ance sec­tor to boost in­sur­ance sales,” said Lu Zhen­wang, CEO of Shang­hai-based Wan­qing Con­sul­tancy.

Liu Qiang­dong, founder and CEO of JD, has re­vealed the com­pany was set to launch an in­ter­net in­sur­ance ser­vice and

... the in­ter­net heavy­weights pos­sess some ad­van­tages to rush into the bur­geon­ing in­dus­try ...”

Li Chao, a se­nior an­a­lyst at iRe­search

move into the on­line bro­ker­age busi­ness and in­ter­net bank­ing.

“The de­vel­op­ment po­ten­tial of China’s in­sur­ance sec­tor is huge, and the in­ter­net heavy­weights pos­sess some ad­van­tages to rush into the bur­geon­ing in­dus­try as they have mas­tered cus­tomer re­sources and could launch cus­tom­ized in­sur­ance ser­vices by uti­liz­ing big data an­a­lyt­ics and pre­cise al­go­rithms,” said Li Chao, a se­nior an­a­lyst at mar­ket re­search firm iRe­search.

Li said the move will en­cour­age tra­di­tional in­sur­ance com­pa­nies to ex­pand their on­line sales chan­nels, and co­op­er­ate with in­ter­net gi­ants, such as es­tab­lish­ing joint ven­tures.

In 2013, Alibaba, Ten­cent and Chi­nese in­sur­ance giant Ping An In­sur­ance (Group) Co of China Ltd es­tab­lished the coun­try’s first on­line in­surer Zhong An On­line P&C In­sur­ance.

Ant Fi­nan­cial Ser­vices Group, the fi­nan­cial arm of Alibaba, ac­quired a con­trol­ling 51 per­cent stake in Cathay Cen­tury In­sur­ance Co Ltd in 2016.

In ad­di­tion, Ten­cent holds a 20 per­cent stake of the Hong Kong unit of UK-based in­sur­ance group Aviva, and a 15 per­cent stake in China’s He­tai Life In­sur­ance Co. Both in­sur­ers have an eye on ex­pand­ing their pres­ence in dig­i­tal in­sur­ance.

Chi­nese search giant Baidu teamed up with Al­lianz and Hill­house Cap­i­tal to launch an on­line in­surer in 2015, but the ini­tia­tive has yet to re­ceive reg­u­la­tory ap­proval.


Pedes­tri­ans walk past Al­lianz flags in Mu­nich, Ger­many.

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