CNinsure Forms Strategic Partnership With China’s Taiping General

Chinese insurance intermediary CNinsure has formed strategic partnership with Taiping General, a subsidiary of China Taiping Insurance Group, for product development and distribution, as well as data sharing and outsourcing of claims adjusting services.

Both companies had a long-term business relationship for years, and this strategic agreement indicates a consensus among senior executives of both companies that "a comprehensive and in-depth cooperation between insurance companies and intermediaries has become an irrevocable trend in the industry," said Yinan Hu, CNinsure's chairman and chief executive, in a statement.

"A deeper cooperation between CNinsure and Taiping General will create a win-win situation for both parties by strengthening our competitiveness and profitability," added Hu.

This is the second partnership of CNinsure with a domestic nonlife insurer within two weeks. The company entered another with one with the largest Chinese nonlife insurers, PICC Property and Casualty, which Chunling Wang, vice president and head of CNinsure's property/casualty business unit, said will increase predictability for resource allocation, improve revenue and earnings stability of CNinsure (BestWire, May 17, 2010).

Shenzhen-based Taiping General operates insurance businesses covering property, accident and health insurance and reinsurance. At the end of March, Taiping General reported cumulative premium income of 1.31 billion yuan (US$192 million), according to the China Insurance Regulatory Commission.

For the first quarter of this year, CNinsure's net income was 67.3 million yuan, up 47.9% from the corresponding period of 2009. Its total net revenue reached 282 million yuan, up 30.6%; while its income from operations was 72.7 million yuan, up 58.3%.

CNinsure said it expects its net income to "grow by approximately 35% for the second quarter of 2010" compared with the corresponding period of 2009.

"We remain optimistic about our prospects. We expect the next three to five years to be the golden period for the development of China's insurance and financial services industries," said Hu.

He noted the positive factors are coming from China's widening economic recovery, the rapid accumulation of personal wealth by its people and the government's stimulus incentives on domestic consumption.

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