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ZhongAn to offer life insurance after Hong Kong IPO worth up to $1.5 billion
September 18, 2017 / 7:22 AM / in a month

ZhongAn to offer life insurance after Hong Kong IPO worth up to $1.5 billion

HONG KONG (Reuters) - China’s ZhongAn Online Property and Casualty Insurance Co Ltd [IPO-ZAOL.HK], the nation’s first internet-only insurer, said it plans to add life insurance and other healthcare products to its range of policies after going public in Hong Kong.

ZhongAn, founded by Alibaba (BABA.N) Executive Chairman Jack Ma, Tencent (0700.HK) Chairman Pony Ma and Ping An Insurance Group (2318.HK) Chairman Ma Mingzhe also plans to offer its technology to insurers inside and outside of China, it said on Sunday.

The company is offering 199.3 million new shares in an indicative range of HK$53.70 to HK$59.70 each, putting its initial public offering at up to HK$11.9 billion ($1.5 billion).

At the top end of the range, ZhongAn would have a market value of around $11 billion, it said in its prospectus.

Final pricing will be decided on Thursday, with its debut on the Hong Kong stock exchange slated for Sept. 28, the company said.

Japan’s SoftBank Group Corp (9984.T) agreed to buy a stake of just below 5 percent in ZhongAn as a cornerstone investor in the IPO, investing about $550 million.

“This is a good marriage for the company in the sense that this is a very strategic, visionary investor and they’ve done a lot of study into the company. SoftBank is definitely a very strong stamp of approval,” ZhongAn’s Chief Financial Officer Francis Tang said at a news conference.

SoftBank could make the investment through SoftBank Vision Fund, the world’s largest private equity fund, or other affiliates, ZhongAn said.

The company plans to use the new funds to bolster its capital base and cope with a 70 percent surge in gross written premiums in the three months ended March 2017, compared with the same period last year.

“We are at a fast-pace growth stage, so we want to make sure that we have the sufficient capital because as an insurance company we have to have a strong capital base to do more business,” Tang said. “So when we see more business coming in, we want to make sure this won’t become a bottleneck.”

The company has sold more than 8.2 billion policies to some 543 million people since its inception in 2013 in five areas: travel, health, consumer finance, auto and lifestyle consumption, where it started by insuring shipping returns at e-commerce giant Alibaba’s online marketplace.

ZhongAn is applying for a license to offer life insurance products, Tang said, without giving an expected timeline for approval. It already offers 262 different types of insurance products and wants to add more within the five core areas.

“We can further develop the depth and breadth in each of them,” Tang said. “We’re looking more at the pain points when you conduct your daily activities on the Internet ... what kind of protections do people need? We want to address those.”

ZhongAn also plans to earn more in coming years from the sale of its technology to other insurers and partners within China and abroad.

“This is how we want to see our expansion, not just outside China, but also inside China,” Tang said.

($1 = 7.8170 Hong Kong dollars)

Reporting by Elzio Barreto; Editing by Louise Heavens and Edwina Gibbs

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