Despite stock price woes it’s full steam ahead for Alibaba’s finance arm, Zhejiang Ant Financial, who revealed plans to invest 1.2 billion yuan ($188 million USD) into the China insurance arm of Taiwan-based Cathay Financial Holdings on Monday.
It’s very much a strategical asset for Ant Financial, who will hold a 60% stake following the deal, according to a statement from the Taiwanese company. The partnership will allow Ant Financial to extend it’s online insurance services and avoid applying for extra licensing.
The internet insurance sector has grown in leaps and bounds, transforming the industry in China. Sales of online insurance neared $13 billion USD in the first six months of 2015, according to the Insurance Association of China, on par with the total amount for 2014.
Fast growing sectors include motor insurance, which accounts for over 56% of the total online insurance spend. Automotive insurance is interestingly one of the main focuses of Cathay Financial, Ant Financial’s new market partner.
The development of e-commerce platforms including Alibaba’s Taobao and JD.com also have driven online insurance numbers.
Ant Financial introduced a platform last month, called Ant Fortune, that lets users select from hundreds of fund products from over 80 local financial institutions.
The company teamed up with Tencent and Chinese insurance company Ping An in November 2013 to launch an online insurance company called Zhong An.