CNinsure seeks partners
Updated: 2007-12-13 16:43
CNinsure Inc, a NASDAQ-listed insurance agency and brokerage company operating in China, plans to pour 1 billion yuan ($135.69 million) into mergers and acquisitions within three years, its top management said yesterday.
"Taking over smaller firms and joining hands with international insurance brokerage companies will be our focus to penetrate the market," David Tang, vice-president of CNinsure, said.
The company signed an agreement earlier this month to acquire a 60 percent stake in Guangdong Fangzhong Insurance Surveyors & Loss Adjusters Co Ltd, an insurance adjusting company based in Guangzhou.
This is the first acquisition agreement entered into by CNinsure since its listing on the NASDAQ on October 31. The transaction is expected to close in January 2008.
"Meanwhile, we are also in touch with major international insurance brokerage companies about setting up joint ventures," Tang told China Daily.
"When looking for potential partners, their business focus, geographic coverage and top management will be our major concerns."
Besides M&A strategy, CNinsure is also quickening its own geographic expansion. The company yesterday announced its entrance into Tianjin, a city with a per capita gross domestic product that hit 35,800 yuan last year, next to Shanghai and Beijing.
"And we are also planning to go into Zhejiang, Jiangsu, Henan and Liaoning provinces," Hu Yinan, chief executive of CNinsure, said.
If successful, the company will cover the country's top 10 provinces in terms of premium income for 2006, or a 65 percent share of the whole insurance market.
"Our target within three to five years is to set up a strong network covering 23 provinces, 100 independent insurance intermediary companies and 200,000 insurance agents," Hu added.
CNinsure will also spend 300 million yuan strengthening its IT, training and after-sales system.
Fueled by the rapid growth of China's insurance market in recent years, insurance intermediaries have been the major channel for selling policies.
The China Insurance Regulatory Commission's latest statistics show that about 429 billion yuan in premiums was earned through intermediary companies during the January-September period this year, accounting for 80.49 percent of the overall premiums. That proportion is 2.73 percentage points higher than the same period last year.
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