Chinese online insurer seeks $2b in HK IPO

HONG KONG • China's ZhongAn Online Property and Casualty Insurance, the nation's first Internet-only insurer, said it plans to add life insurance and other healthcare products to its range of policies after going public in Hong Kong.

ZhongAn - founded by Alibaba executive chairman Jack Ma, Tencent chairman Pony Ma and Ping An Insurance Group chairman Ma Mingzhe - also plans to offer its technology to insurers inside and outside of China, it said on Sunday.

The company is offering 199.3 million new shares in an indicative range of HK$53.70 to HK$59.70 each, putting its initial public offering (IPO) at up to HK$11.9 billion (S$2.06 billion).

At the top end of the range, ZhongAn would have a market value of around US$11 billion (S$14.8 billion), it said in its prospectus.

Final pricing will be decided tomorrow, with its debut on the Hong Kong stock exchange slated for Sept 28, the company said.

Japan's SoftBank Group agreed to buy a stake of just below 5 per cent in ZhongAn as a cornerstone investor in the IPO, investing about US$550 million.

"This is a good marriage for the company in the sense that this is a very strategic, visionary investor and they've done a lot of study into the company. SoftBank is definitely a very strong stamp of approval," ZhongAn's chief financial officer Francis Tang said.

SoftBank could make the investment through SoftBank Vision Fund, the world's largest private equity fund, or other affiliates, ZhongAn said.

ZhongAn plans to use the new funds to bolster its capital base and cope with a 70 per cent surge in gross written premiums in the three months that ended in March, compared with the same period last year.

"We are at a fast-pace growth stage, so we want to make sure that we have the sufficient capital, because as an insurance company, we have to have a strong capital base to do more business," Mr Tang said.

"So when we see more business coming in, we want to make sure this won't become a bottleneck."

The company has sold more than 8.2 billion policies to some 543 million people since its inception in 2013 in five areas: travel, health, consumer finance, cars and lifestyle consumption, where it started by insuring shipping returns at e-commerce giant Alibaba's online marketplace.

ZhongAn is applying for a licence to offer life insurance products, Mr Tang said, without giving an expected timeline.

It already offers 262 types of insurance products and wants to add more within the five core areas.

ZhongAn also plans to earn more from the sale of its technology to other insurers and partners within China and abroad.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 19, 2017, with the headline 'Chinese online insurer seeks $2b in HK IPO'. Print Edition | Subscribe