The Alibaba-backed Ant Financial Services Group and China United Insurance have received approval from the insurance regulator to set up an agriculture insurance joint venture.
The venture Nonglian Zhongxin Technology Co will be the first agriculture technology company co-established by an insurer, reported Chinamoneynetwork.
Nonglian will be 60% owned by China United Insurance and 40% owned by Shanghai Yunxin Venture Capital Management, a wholly owned subsidiary of Ant Financial.
The joint venture between one of China’s financial technology leaders and China United Insurance, an insurer founded in western Xinjiang province and now based in Beijing, will aim to meet increasing demand for insurance products driven by modernisation of the agricultural sector.
Agriculture insurance is booming in China. Agricultural insurance premiums expanded seven times to CNY41.72 billion (US$6.4 billion) in 2016 from CNY5.18 in 2007, according to statistics from the CIRC.
Leveraging Ant Financial and Alibaba’s vast resources in e-commerce, digital payment, logistics and offline presence, the joint venture will provide insurance and other financial services to agriculture firms.