China Banking and Insurance Regulatory Commission, the country's banking and insurance regulator, gave green light to China's e-commerce giant JD to invest 483 million yuan ($71.12 million) into Allianz China General Insurance Company Ltd for a 30 percent stake in the company on July 24.
The investment, though smaller than the previously announced 537 million yuan in April, will still make JD the second-largest shareholder in Allianz China General Insurance Company Ltd, furthering its push into the financial sector.
Three other Chinese companies, China Sinda, Shenzhen Huijing Tongda, and Shanghai Snow Light Capital will take 12.4 percent, 4.27 percent, and 3.33 percent stake respectively in Allianz China after the transaction.
Founded in 2003, the China unit of global insurance giant Allianz SE, with registered capital increasing from 805 million yuan to 1.61 billion yuan after the transaction, will become a Sino-Germany joint venture with the German part owning 50 percent of stake.
Competition in China's fast-growing online insurance industry is intensifying as the nation's internet giants are investing heavily in the sector.
Richard Liu Qiangdong, founder and CEO of JD, has said the company was set to launch an internet insurance service and move into the online brokerage business and internet banking years ago.
JD signed a cooperation agreement with the Sichuan Provincial Government in 2015 to set up a JD internet property insurance company with no further developments revealed. The company also invested 80 million yuan in the A-round financing of internet car insurance platform Ok Car Insurance two years ago.
Other internet giants Alibaba, Tencent, and Baidu are also positioning themselves in the lucrative online insurance market.
Alibaba, Tencent and Chinese insurance giant Ping An Insurance established the country's first online insurer Zhong An Online P&C Insurance in 2013, with Alibaba taking 19.9 percent stake and the other two taking 15 percent respectively.
Ant Financial, the financial arm of Alibaba, acquired a controlling 51 percent stake in Cathay Century Insurance in 2016.
In addition, Tencent holds a 20 percent stake of the Hong Kong unit of UK-based insurance group Aviva in 2017, and a 15 percent stake in China's Hetai Life Insurance in the same year.
Chinese search giant Baidu teamed up with Allianz and Hillhouse Capital to launch an online insurer in 2015, but the initiative has yet to receive regulatory approval.
E-commerce giant Suning's Insurance company was approved in 2014. China's largest on-demand services platform Meituan Group also entered the insurance sector in February this year, after its subsidiary, Chongqing Jincheng Huno Insurance Brokerage Co Ltd got regulatory approval.
According to the 2017 China Internet Finance Annual Report released by the National Internet Finance Association of China, the industry competition will be intensified and diversified in the future, as the integrating of insurance and internet sectors. Cross-shareholding and multi-stakeholder partnerships will become a new normal.
