CNinsure Forms Strategic Partnership With China’s Sunshine P&C Insurance

CNinsure Inc., an independent insurance intermediary operating in China, formed a strategic partnership with Beijing-based Sunshine Property and Casualty Insurance Co. for nonlife product distribution and claims adjusting services.

Yinan Hu, chairman and chief executive officer of CNinsure, told BestWire that both companies will "mainly distribute auto insurance" and other non-auto property/casualty insurance products, such as personal accident, homeowners and enterprise property/casualty insurance.

This is the fourth agreement the insurance intermediary has signed with a nonlife insurer at the group level, which according to Hu will enable CNinsure to negotiate with Sunshine as a group for "relatively better terms that is backed by the combined sales volume of all of its subsidiaries, instead of its individual subsidiaries dealing with Sunshine's branches in each individual provinces."

He said the arrangement is a "multidimensional" cooperation, which is not limited to insurance distribution. It also covers the use of CNinsure's independent claims adjusters to "combat fraud claims" and the development of customized products.

With exclusive distribution through CNinsure, Hu said the company will be able to better address clients' needs, ultimately leading to higher profitability.

Through the cooperation, CNinsure is compensated by commissions and service fees for the distribution. It will also be awarded a performance-based bonus that combines sales volume and profitability, said Hu.

Established in July 2005, Sunshine P&C Insurance is a subsidiary of Sunshine Insurance Group, one of the seven leading insurance groups in China. It has a nationwide service network.

In 2009, the nonlife insurer generated insurance premiums of 6.6 billion yuan (US$965 million), ranking it ninth among all property/casualty insurers in China, according to the China Insurance Regulatory Commission.

In 2009, CNinsurer earlier signed agreements with Ping An Property and Casualty Insurance Company of China [088777], China United Property Insurance and China Pacific Property Insurance [090336].

(By Rebecca Ng, Hong Kong news editor: [email protected])