ZhongAn mulls foray into life insurance market

Firm has “strong capital base” to do more business

ZhongAn mulls foray into life insurance market

Insurance News

By Paolo Taruc

China’s first internet-only insurer is reportedly planning to enter the life insurance market after launching its Hong Kong IPO. ZhongAn Online has applied for a license to sell life insurance, but has not given a timeline for approval, according to its chief financial officer Francis Tang.

“We are at a fast-pace growth stage, so we want to make sure that we have the sufficient capital because as an insurance company we have to have a strong capital base to do more business,” said Tang, as reported by Reuters. “So when we see more business coming in, we want to make sure this won’t become a bottleneck.”

“We’re looking more at the pain points when you conduct your daily activities on the internet ... what kind of protections do people need? We want to address those,” he said.

ZhongAn started taking orders for the Hong Kong IPO on Monday. It could raise as much as US$1.5bn.

The Shanghai-based company is offering 199.3 million new shares at HK$53.70 (about US$6.87) to HK$59.70 (about US$7.64) a piece, according to terms for the deal obtained by Bloomberg. Japan’s SoftBank Group agreed to purchase 71.9 million shares, worth as much as US$550m, as the sole cornerstone investor in the offering, the terms show.

ZhongAn was founded in 2013 by mainland Chinese heavyweights Alibaba Group, Tencent Holdings, and Ping An Insurance. According to its IPO prospectus, the online insurer recorded net profits of RMB37m (US$5.66m), RMB44m (US$6.73m), and RMB9m (US$1.38m) from 2014 to 2016.

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