China's four standalone online insurance companies have shown mixed performances.
The four are Zhong An, Taikang, Yi An and An Xin. All offer non-life insurance products. Zhong An is the oldest, as it started operations in November 2013. The other three had their online insurance licences approved last June. Taikang Online started operations late last year while the other two commenced business early this year.
CIRC data shows that for the first four months of this year, the gross premiums of the four online insurers totalled: CNY848.6 million (US$129 million) for Zhong An; CNY35.3 million for Taikang; CNY756,300 for Yi An and CNY303,300 for An Xin. In contrast, total gross premiums for the Chinese non-life market stood at CNY311.6 billion for January to April this year.
Taikang Online has been able to take off more quickly than the other two new competitors because it was spun out of the online unit of the established Taikang Insurance group.
There are questions over the role which these online insurers will play: disruptive or merely complementary to existing distribution channels. To the online insurers, however, their main objective is to enter the market so as not to lag behind competitors, reported Investors' News.
Industry players say that the online insurers are relying mainly on incidental insurance, that is insurance tied to another business, such as travel insurance with the purchase of air tickets or goods-return insurance tied to online purchases of goods. However, it is said that such insurance products do not attract the desired level of profits.
All four online insurers are looking at auto insurance as a class of business, but to date, only Zhong An has received CIRC approval to carry out auto insurance business.
The four online insurers will be facing tough competition. Apart from the online marketing channels of traditional insurers, other standalone online insurers are emerging. Chinese web services giant Baidu is teaming up with Allianz to launch an online insurance service in China. Baidu has teamed up too with China Pacific Property Insurance to establish an online car insurance company.
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