BERLIN, Oct 28 (Reuters) - Ergo, the retail insurance unit of Munich Re, has struck a partnership with Great Wall Motor and will start selling insurances to car owners in China, both companies announced on Monday.
Ergo and Great Wall Motor, the sixth-biggest car seller in China, are building up a joint venture which will go into operation early next year, the companies said, adding that Ergo would own 49% of the unit, while Great Wall Motor would own 51%.
With the step, the German insurer intends to carve out a stake in a highly-regulated market largely controlled by Chinese vendors, Ergo’s head of mobility solutions, Karsten Crede, said.
Negotiations with Great Wall Motor took more than a year, he added.
Under the agreement, Ergo will earn a percentage on each insurance contract sold. In China, car buyers normally take out insurance immediately when buying their car at a dealership.
Ergo will also insure Great Wall Motor’s production plants and around 1,000 dealerships, the companies said. (Reporting by Alexander Huebner, writing by Tassilo Hummel, editing by Thomas Escritt)