Internet-based insurer extends protection to online shoppers

China's first online insurance firm is coming out with products targeting e-commerce shoppers in a month, a company executive said on Wednesday.

The products designed by ZhongAn Online P&C Insurance Co Ltd will address issues related to the e-commerce, mobile payment and Internet finance fields, Yin Hai, the company's CEO, said at a launch ceremony in Shanghai.

The new products will insure shoppers against fake goods sold online and losses or damage during transportation, as well as guarantee insurance for small-cap virtual merchants that exempt them from registration premiums, Yin said.

With registered capital of 1 billion yuan ($164 million) and its headquarters in Shanghai, ZhongAn's shareholders include China's top e-commerce company Alibaba Group Holding Ltd and the country's largest Internet firm, Tencent Holdings Ltd, as well as the world's second-largest insurer, Ping An Insurance (Group) Co of China Ltd.

ZhongAn's portfolio ranges from enterprise/family property insurance to cargo transportation insurance and liability and guarantee insurance products.

"ZhongAn will bank on the insurance expertise from Ping An's big data and the cloud-computing projects from the two Internet titans," said Yin.

Alibaba, which has a 19.9 percent stake in the company, is its biggest shareholder, followed by Ping An and Tencent, each with a 15 percent stake.

There are also six smaller shareholders including online travel agency Ctrip.com, IT company Rising Technology Corp Ltd and several investment firms.

Yin said that ZhongAn is focusing on customized policies that are a good fit for Internet users and their online activities. Each product aims to solve specific issues that online buyers or sellers may face.

ZhongAn plans to establish its own customer base in the future and not be dependent on its three biggest shareholders. But for now, it will ask its partners to analyze the viability of the new products by using their client data.

Pony Ma, Tencent's CEO, said that the new products will transform the insurance industry, which is known for its conservative business models and high barriers of entry, into a modern and forward-thinking sector.

The overriding goal is to establish a national credit system boosted by big-data computing, said Jack Ma, Alibaba's chairman.

The financial industry will become a lot more "fair and transparent" if big-data projects are properly applied to identify a person's credit record, he said.

He added that the Internet has become an essential force to generate new ideas.

"When Taobao launched the so-called Full-Moon Insurance in August, millions of policies were sold out within minutes. It captured the attention of the young generation, which is destined to become the backbone of future consumption," Ma said at the launch ceremony.

Peter Ma, head of Ping An, estimated that 50 percent of individual property insurance policies can be moved online, given their easier standardization and lower risk.

The planned interest rate liberalization will deal a heavy blow to the traditional financial industry over the next two decades, which will witness a sharp reduction of over-the-counter services offered by small and medium-sized financial institutions, he said.

"It's safe to say that in 10 years, people will cancel at least 50 percent of the cash and credit cards that are being used today. The trend toward mobile payments reflects the mega trend of how the Internet is reshaping the industry and daily life," he added.

The new collaboration drew widespread attention partly because of the ongoing spat between Tencent and Alibaba. The two Internet giants are competing on a series of applications ranging from online payment products to mobile instant messaging services.