Chinese insurtech giant ZhongAn kicks off international development

The world’s largest technology investment fund, the Japanese Softbank Vision Fund, has entered into an agreement with the startup and is ready to invest $100 million. The target? Bring the ZhongAn technology and model abroad, starting with Asian markets

09 Nov 2018

China is no longer enough for ZhongAn, a Chinese insurtech company founded in 2013, which has quickly managed to achieve several records. 

Launched in October 2013 by Alibaba Group, Ping An Insurance Company and Tencent as the first Chinese online-only company, with a portfolio of more than 200 products, it has succeeded in achieving a new customer segment, consisting of Millennials and small dealers. It’s a company more technological than insurance, enough to think that 52% of its 1,700 employees are in the technology area and only 5% are in the sales area. Thanks to this feature, which allowed it to get to know its customers very well by leveraging on big data, it has managed to rethink the insurance product, focusing in particular on micro-policies. Some of these cut out specific risks from standard policies, such as health insurance against cancer or diabetes; others are related to risks associated with e-commerce (product returns, damage, etc.); others are almost insane compared to a traditional insurance vision, for example, during the 2014 Football World Cup, Zhong An offered fans a “hooligan insurance” at a price of $ 0.45 to cover medical expenses from skirmishes with supporters of opposing teams.

Recently ZhongAn also launched a SaaS platform for other insurance companies in China, announced its blockchain projects, and presented the results of the first half of 2018, which showed the company advancing by 5 positions compared to 2017 in the Chinese insurance industry and achieving 13th place in the market. An extraordinary result considering it is a startup with a 5 years life span.

Another key for the success of this insurtech can be found in its distribution model based on a network of partners: ZhongAn is not a consumer brand, its sales have been generated by a network of about 200 “ecosystem partners”, including Alibaba and Tencent, who are also shareholders.

In just a few years it has reached a valuation of over 11 billion dollars, also determined by its listing on the Stock Exchange (that of Hong Kong) in September 2017, with an IPO raising 1.5 billion dollars. This has made it the sixth most valuable fintech company worldwide (after PayPal, Square and Stripe), although its path has not been completely steady and the first approaches to international markets have not been satisfactory, according to Techcrunch.  

However, with more than one hundred million dollars of new resources, the new investment of the Softbank Vision Fund (the world’s largest venture capital fund), is expected to give a great boost to ZhongAn International, the subsidiary of ZhongAn created to manage the international growth of the Chinese startup.

Through this transaction, SoftBank plans to use ZhongAn technology and network to extend into “several markets” in Asia, although it has not been announced yet in which countries or when potential launches will take place.

“We are pleased to present this partnership that will allow us to explore new and innovative ways to serve more companies and customers beyond China. SoftBank is an important business partner and we are confident this cooperation will significantly strengthen our activities in the field of technology solutions”, ha said Jeffrey Chen, CEO of ZhongAn Online.

In particular, according to Reuters, SoftBank will own 51% of the new entity that aims to sell the Chinese company technology to financial and healthcare companies in the Asia-Pacific area. ZhongAn will have the remaining 49% stake, starting with an initial capital of 200 million U.S. dollars.

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