Analysts bullish on China's insurance-tech sector

Tracy Li
The Shanghai-headquartered digital carrier ZhongAn Online P&C Insurance realized original insurance premium income growth of 20.6 percent in the first four months.
Tracy Li

Analysts are bullish on China’s insurance technology segment, which has become an important driving force for the whole industry during the pandemic period.

Mizuho, JPMorgan Chase and DBS, among a group of investment banks, have recently given ZhongAn Online P&C Insurance "buy" or "overweight" ratings and raised its target price.

The Shanghai-headquartered digital carrier realized an original insurance premium income of 4.2 billion yuan (US$592 million) from January to April, up 20.6 percent year on year, far higher than the industry’s growth rate of 4.3 percent.

The market believes the technology-based insurer will continue to build up its competition barriers, cement its position in the industry and find room for growth.

By the end of 2019, the firm saw its underwriting and claim settlement automation rates reach 99 percent and 95 percent respectively. And around 85 percent of online customer service was empowered by artificial intelligence technology.

Market confidence came on the basis of a broad-based recovery of China's insurance sector against the COVID-19 pandemic.

From January to April, the insurance industry realized 1.99 trillion yuan of original insurance premium income, up 4.3 percent year on year, data from the China Banking and Insurance Regulatory Commission showed.

Specifically, premium from property and casualty insurance underwriting reached 401.6 billion yuan, up 3.29 percent compared with a year ago.

Personal insurance premiums totaled 158.7 billion yuan, up 4.6 percent annually. Specifically, the health insurance segment notched a 20.5 percent year-on-year growth, the highest among all types of coverage.

Underpinned by insurance-tech, the growth does not come easily and the watchdog said the protection role of insurance will be given full play in the future and more medical and health insurance products and offerings will be developed.

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