Online-only ZhongAn advances among the league of insurers
ZhongAn Online P&C Insurance Co Ltd, China’s first online-only insurance company, announced that its gross written premium surged by 74.7 percent year on year to reach 5.95 billion yuan(US$ 940 million) as the end of 2017.
The company ranked 18th in the country’s property and casualty insurance market in terms of gross written premium, up seven places compared to the end of 2016.
In the past year, ZhongAn served 432 million customers, with the annual insurance policies per capita of around 12.6 and the annual premium contribution per capita of approximately 13.8 yuan.
In addition to its two existing major ecosystems, namely lifestyle consumption and travel, the HongKong-listed company developed new ecosystems such as health, consumer finance and auto in 2017.
The three product lines contributed to a combined 38.9 percent of its gross written premium growth, up from 16.4 percent in 2016, which also reduced the company to add another 948.1 million yuan provision for unearned premium reserves over that of 2016, according to its annual report.
Unearned premium reserves is one of the several mandatory reserves required under the law for insurance companies and it reflects the amount of premiums written but not yet earned.
The Internet insurance pioneer reported a net loss of 996.4 million yuan from January to December of 2017, which it said was primarily attributable to an increase in its administrative expenses as well as a rise in its unearned premium reserves due to the fast-expanding long-duration business like health insurance and consumer finance.
Chen Jin, the chief executive officer of ZhongAn Online, said that last year was an “important milestone” on the company’s development journey, as it redefines insurance by connecting ecosystems and applications of cutting-edge technology.
He said that although ZhongAn recorded a net loss due to “temporary factors” brought about by the rapid growth of the gross written premium, he is confident in their unique competitive edges in the fast growing InsureTech industry in China.
Chen added that with the strong scale effect of their business model, they will be able to realize an underwriting profit.
ZhongAn started operations in October 2013 and has developed ecosystem-oriented insurance products and solutions through scenario-based settings to serve its customers. Last September, it became the first financial technology company to be listed on the Hong Kong Stock Exchange.