Chinese online news platform Toutiao is reportedly looking to acquire a local insurance brokerage in order to enter the financial services industry and bypass the requirement of having to apply for an insurance licence.
According to reports in mainland Chinese media, Toutiao has asked the China Insurance Regulatory Commission (
CIRC) about obtaining an insurance license. However, it takes almost one year for the
CIRC to grant a licence, so Toutiao will instead acquire a company that already has a licence, according to
China Money Network.
Toutiao was established five years ago and is worth around US$20 billion, making it the fifth-highest-valued private company on
CMN’s Unicorn Ranking. It claims to have 150 million active users per month, and with its broad customer base and targeted advertising capabilities, selling insurance could be a strong source of revenue for the company. Toutiao’s advertising revenue for 2016 was estimated at around RMB6 billion (US$904 million).
With the Chinese online insurance market expected to grow significantly in the next five years, many tech companies are eager to invest in the sector. Global management consulting firm Oliver Wyman estimated that the value of insurance products sold online or via mobile in China was over US$45 billion in 2016, and is expected to reach US$145 billion by 2021.
The so-called “Big Three” of China’s technology industry – Alibaba, Baidu, and Tencent – have all entered the insurance arena in recent years. Meanwhile, Zhong An Online Property & Casualty Insurance, an online-only insurer backed by Alibaba, Tencent, and
Ping An Insurance, raised US$1.5 billion in its Hong Kong initial public offering in September.
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