China’s banking and insurance watchdog is stepping up scrutiny of the nation’s insurance technology platforms, widening a regulatory dragnet that has roiled global investors.
The regulator has ordered companies and local agencies to curb improper marketing and pricing practices, and step up user privacy protection, according to a notice.
It encouraged companies to address these issues voluntarily and said those that failed to comply would face “severe punishment.”
Photo: Reuters
The sweeping order goes beyond the targeted action that has hit a few listed online platforms including Waterdrop Inc (水滴籌) and operations backed by Ping An Insurance Group Co (平安保險) in the months since China began a broad crackdown on its financial technology sector this year. It has also moved to rein in some of its biggest technology companies, as well as education technology, ride-hailing and short video platforms.
The latest move would stymie growth in an industry that had been expected to grow to 2.5 trillion yuan (US$386 billion) in a decade.
The China Banking and Insurance Regulatory Commission did not immediately respond to a request seeking comment.
“In recent years, online insurance has moved into a fast lane. At the same time, transgressions have been rampant,” according to the notice, which cited offenses including some Internet platforms illegally operating in insurance, mispricing risks or illicitly using client information. It called for “immediate rectification and regulation.”
Shares of US-listed insurance platform Huize Holding Ltd (慧擇保險) fell 5 percent, the most in two weeks, after the notice was reported. Insurance agency and platform Fanhua Inc (泛華金融) dropped nearly 6 percent. Ride-hailing service Didi Global Inc (滴滴), which operates a fledgling financial services business, declined 3.7 percent. Shares of ZhongAn Online P&C Insurance Co (眾安保險) slid 8.7 percent at 9:38am in Hong Kong.
Just a year ago, insurance seemed ripe for disruption as start-ups vowed to transform traditional practices with technology. Regulators have since moved to shutter some operations, including mutual aid healthcare platforms operated by Waterdrop and Ant Group Co (螞蟻集團). A draft circular in January might potentially bar companies from selling certain insurance products if enacted.
The overhang presents multiple challenges for Waterdrop, which was one of a few Chinese fintechs to have pulled off an initial public offering this year. The company has warned it “may not be able to achieve or maintain profitability or positive cash flow in the future” after incurring net losses and negative cash flow each year since its inception in 2016. It lost US$101 million last year after generating operating revenue of US$464 million.
Investors and companies have poured an estimated 45 billion yuan into insurance technology, according to estimates from online consultant iResearch.
By the end of last year, more than 140 insurance companies in China had started online insurance businesses, with total premiums of 298 billion yuan for the year, or 6 percent of the industry total, a commission official said in a speech in May.
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS