Allianz, Baidu, Hillhouse form Chinese insurance JV
Chinese search giant Baidu, German insurer Allianz and China-based Hillhouse Capital have formed an internet insurance company to distribute insurance products in China.
The joint venture (JV) will apply for a license to sell insurance online throughout the country, targeting both individual customers and small and medium-sized businesses. The three partners will design innovative approaches in travel, e-commerce, internet finance, short-term health, lifestyle and potentially also the motor insurance.
Allianz said that market research expects digital insurance premiums in China to grow from EUR25 billion ($27 billion) in 2015 to EUR107 billion in 2020, offering up significant opportunity.
"The digital revolution in financial services is happening rapidly in Asia and particularly in China, where the financial services sector is being reinvented. With the speed of innovation that is taking place, we will see the quick disruption of traditional models," said George Sartorel, CEO of Allianz Asia Pacific, in a statement.
Lei Zhang, CEO of Hillhouse, added that creating an internet-based insurance company allowed the three parties to "anticipate customer needs in a more effective way."
Baidu's foray into insurance followed its strategic cooperation with CITIC Bank to launch an online bank, called Baixin Bank, to provide loan products online. Its rivals - Tencent and Alibaba - have already expanded into the online finance space.
Earlier this year, Tencent launched an online bank called WeBank, named after its instant-messaging app WeChat. Alibaba's online financial affiliate Ant Financial also established its own online bank MyBank.
In November last year, Alibaba and Tencent joined force with Ping An Insurance to set up Zhong An Online Property Insurance. The online platform raised RMB5.78 billion ($931 million) from a group of investors in June, including China International Capital Corp. (CICC), Morgan Stanley, CDH Investments, Keywise Capital Management and SAIF Partners.
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