DCP leads $235m round for China's Datong Insurance

The private equity firm was joined by China Merchants Venture Capital, ZWC Partners, and Huagai Capital, according to a Datong statement. Together, they took out a 32.98% stake held by Anxin Trust, an embattled Shanghai-listed trust company that has been divesting assets after agreeing to a government bailout and restructuring earlier this year.

Founded in 2008, Datong offers thousands of insurance products from over 100 property and casualty and life insurance providers. It employs more than 40,000 agents across 200 cities in China. Last year, the company was the only Asian entrant in a ranking of the top 20 insurance brokerages globally published by Insuramore, a UK-based insurance consultancy.

DCP said in a separate statement that it would help Datong “create a new insurance ecosystem driven by product customization, demand matching, and a comprehensive service matrix to provide professional insurance services to Chinese consumers.”

It expects China’s insurance industry to follow a similar path to developed markets, with a separation of underwriting and sales, leading to a more prominent role for brokerage firms. At present, China’s life insurance premium per capita is 19% that of the US and 13.5% that of Japan. Penetration of third-party insurance brokerages is 2.3%, compared to 47% in the US and 17.8% in Japan.

The industry is projected to see compound annual growth of more than 20% over the next five years, spurred by the medical and healthcare services of an aging and increasingly wealthy population as well as by rising demand for insurance planning, product comparison, and claims services.

Digitalization is a key trend and Datong has created a service platform for online and offline collaboration. Several wholly or primarily online players in the space have received private equity funding, including Yuanbao and Waterdrop. The latter raised $360 million through a US IPO in March.

“Datong has an outstanding professional management team, best-in-class insurance agents, deep industry insights and a forward-looking vision for the sector. With rising demand for professional insurance services, China's insurance services industry is experiencing a pivotal transformational moment and can look ahead to exciting growth opportunities,” said David Liu, executive chairman of DCP.

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• Topics
• Greater China
• Expansion
• Financials
• China
• insurance
• DCP Capital Partners
• ZWC Partners
• Huagai Capital
• Growth capital
• Financial Services