Reinsurance News

Focus on emerging ecosystems supports growth at ZhongAn Online in H1

29th August 2018 - Author: Luke Gallin

China’s largest online-only insurance company, ZhongAn Online P&C Insurance Co., Ltd., has recorded solid growth during the first-half of 2018, driven by its increased focus on “emerging ecosystems” and growing demand among the younger generation.

Zhongan InsuranceThe internet-based InsurTech firm recorded total premiums of RMB 5,148.2 million (US$756.4 million) during the first six months of the year, which represents year-on-year growth of 106.6%, and which moves the firm up five places to 13th in China’s P&C insurance market, when compared with H1 2017.

The company’s combined ratio improved by 9.1% in the period to 124%, while its loss ratio decreased by 5.3% to 54.2%, and its combined expense ratio decreased by 3.8% to 69.8%, when compared with the full-year 2017.

ZhongAn Online’s Chief Financial Officer (CFO), Francis Tang, said: “The improvement in combined ratio is supported by four key factors – Firstly, the Company’s increasing focus on emerging ecosystems: healthcare, consumer finance and automobile has continuously helped optimize our client acquisition, products and risk control, etc.

“Secondly, the narrowed loss ratio was achieved through accumulating of user data at partnering ecosystem platforms. Thirdly, we have continued to optimize our product mix by decreasing the proportion of less profitable products.

“Lastly, the application of cloud computing, big data and artificial intelligence technologies has continued to boost the efficiency in underwriting and claims procedure. With total premiums expanding, economies of scale in our business are gradually materializing.”

The online insurer reports that the combined premium growth in emerging ecosystems, being healthcare, consumer finance, and automobile, reached 402% in the period, while it maintained stable development in the other two core ecosystems – lifestyle consumption and travel.

By line of business, the healthcare ecosystem recorded gross written premiums of RMB 1,557.2 million (US$228.8 million) in the period, which is growth of 255.9%, year-on-year.

In consumer finance, premium income contributed by the ecosystem was RMB 1,484 million (US$218 million), which represents year-on-year growth of 478.8%.

While the automobile ecosystem continues to expand rapidly from the final quarter of last year, recording gross written premiums of RMB 462.9 million (US$68 million), which represents a month-on-month growth of 25% during H1 2018.

Jeffrey Chen, Chief Executive Officer (CEO) of ZhongAn, said: “The Internet has brought about the new economy with new risks and a new need for risk protection. In particular, there is an increasing demand among younger generation users for quality and ecosystem-oriented user experience. These have created enormous opportunities for our innovation and technology-driven Internet-based insurance business and our partners.

Furthermore, as the first Internet-based insurer in China, ZhongAn is committed to promote the development of financial services industry with technology. We are proactively exploring partnership and investment opportunities in China and internationally to develop and market our technology solutions businesses through ZhongAn Technology and ZhongAn International.”

The insurer recently announced that it’s entered into a Shareholder Agreement with Japanese technology & telecoms investor, SoftBank Vision Fund, to help expand its InsurTech solutions businesses in overseas markets.

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