A couple of weeks ago we published a podcast with the CEO of ZhongAn Insurance, Jeffrey Chen. I want to highlight some of the key takeaways today because I think they are a truly amazing company and some of these highlights might have been lost in translation.
Back in June, IFR, a Thomson Reuters publication, broke the news that ZhongAn had filed an IPO application to the Hong Kong stock exchange targeting a listing as early as the end of 2017, raising up to US$1.5 billion. If the deal goes through, ZhongAn will be the first insurtech company to be listed in Hong Kong. It will also likely become one of the most valuable fintech companies on the planet.
With that background here are the five key takeaways from my interview with Jeffrey Chen.
1. ZhongAn is Backed By Some of China’s Largest Companies
Ping An Insurance is ranked by Forbes as the #1 insurance company in the world. They are an early backer of ZhongAn. The other early backers were Alibaba and Tencent, the two most valuable companies in China as measured by market cap. This would be like a fintech startup in the US receiving initial funding from Apple, Amazon and Berkshire Hathaway. Truly impressive.
2. Their First Product Was a Simple Insurance Offering for Alibaba Merchants
ZhongAn’s first product was called Zhong Le Bao, a type of e-commerce returns insurance. It was launched on Alibaba’s Taobao platform and was aimed at covering merchant shipping losses when consumers were dissatisfied with product purchases. It also allowed merchants to bypass Alibaba’s deposit requirements.
3. ZhongAn is the Largest Insurance Company in the World With 492 Million Customers
When I first heard this number I could not believe it: ZhongAn has 492 million insurance customers. Together these customers have purchased over 7.2 billion insurance policies. I am quite confident there is not another insurance company on earth that can come close to those numbers. And that is as of December 31, 2016, no doubt they have grown significantly in the last 8 months. It goes without saying that ZhongAn is the largest online insurance company in China with GWP (Gross Written Premiums) of RMB 3,408 million (US$510 million) in 2016. Clearly, they issue many, many small dollar policies.
4. ZhongAn Has More Than 180 Partnerships With Leading Internet Companies
We already know about their relationship with Alibaba but ZhongAn also has deep integrations with most of the leading internet companies in China. Ctrip is the leading online travel firm in China, Didi Chuxing is the leading ride-sharing company in China (they acquired Uber’s Chinese business last year) and Xiaomi is the world’s fifth largest smartphone maker. These are all companies where ZhongAn provides an insurance option that is inexpensive and simple, so there is significant uptake.
5. Their Risk Management and Data Analysis is Very Sophisticated
As I said in the interview when I visited the ZhongAn offices last year and sat down with their Chief Operating Officer I came away most impressed by their use of data. They are not just using artificial intelligence in new ways they think about data holistically. What I mean by that is they look at all sources of data – they want to find out as many data sources as possible and get connected to that data from the very beginning.
ZhongAn was the first Internet company to obtain an insurance permit in China and they have clearly taken advantage of this leadership position. While Mr. Chen specifically had no comment when I asked about their IPO plans much has been written about this already. Many people, myself included, will be watching this IPO closely and I expect ZhongAn will soon become one of the most valuable publicly traded fintech companies in the world.
Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.