Independent Chinese financial services provider, Fanhua Inc., has announced the execution of a term sheet to acquire majority interests in Zhongrong Smart Finance Information Technology.
The proposed transaction will involve the issuance of up to 62 million new ordinary shares of Fanhua, representing 5.44% of its enlarged share capital, in exchange for 57.73% of the equity interests of Zhongrong.
Hu Yinan, Chairman and CEO of Fanhua, commented on the proposed transaction, stating, “As a leading managing general agency in China, Zhongrong has unique advantages in compliance and quality management.
“The acquisition of Zhongrong is expected to greatly enhance the compliance and quality management capabilities of Fanhua’s platform and rapidly increase our market influence. It also marks an important step forward in accelerating the expansion of our platform’s foothold, contributing to the sustainable, high-quality growth of the life insurance agency channel in China.”
Meanwhile, the firm has also announced the official launch of its open platform, which is set to provide various market participants with access to a standardised compliance framework, a full spectrum of products and services on the market, leading technology and digital operation capabilities, professional training and services, and capital support.
Yinan added, “We believe what will happen next in the individual life insurance agency business in China is that while sales organisations are becoming increasingly fragmented, the market of supporting platforms will become increasingly concentrated.
“Fanhua has been adhering to the ‘professional back office platform + individual entrepreneurship’ operation model since its inception. After 24 years of development, we have forged a strong open platform with a comprehensive infrastructure.
“The open platform has been empowering our agents in their professional development and career progression, demonstrated by significant improvement in the number and productivity of our elite agents. We, therefore, believe it is high time to make the platform open to the whole industry.”
