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.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained