Alibaba affiliate, Ant Financial, buys 60% stake of Cathay Insurance Co.
The financial associate of the Alibaba Group has tried to expand itself. Alibaba news revealed that Ant Financial would make a strategic investment worth 1,200,000,000 Yuan ($188,000,000) to govern the Chinese insurance unit of a Taiwanese holding company. The invested funds would allow the Hangzhou-based enterprise’s affiliate to own a 60% stake in Cathay Financial Holding Co.’s unit, Cathay Insurance Co. of Taiwan, as disclosed by the insurer.
Alibaba news today affirmed that the deal would let the company, which is known for operating a network that offers online insurance facilities, to extend its range of devices. An official of Ant financial, Eric Jing, has stated that it is interested in providing new insurance facilities over the internet to small enterprises and customers.
Ant Financial is also known for running Alipay, a famous electronic payment facility with more than 400,000,000 active users. Chinese Internet businesses, such as Alibaba, are trying to develop electronic financial facilities, ranging from consumer credit to payments, to attract more users to their networks.
The Taiwan-based business has stated that the financial holding organization is seeing rapidly expanding insurance market in the second largest economy and the strategic step would increase the speed of the company’s online finance development in the most populated country.
Alibaba breaking news informed that Cathay financial referred to the statistical data gathered by the China Insurance Regulatory Commission, as it stated that the total insurance premium income earned via Internet in China reached a figure of 85,900,000,000 Yuan previous year, which accounted for more than 4% of the entire Chinese insurance sector. The information showed that the 2014 online insurance premium was 26 times greater than the figure witnessed four years ago.
According to the Taipei-based organization, Ant financial is already offering a number of electronic financial facilities, such as credit reviews, management of wealth, third party payment, and micro financing. It believes that the collaboration with Alibaba’s affiliated organization would help Cathay financial to prepare a field for penetrating into the electronic financial market in China.
It is probable that the invested sums would not only enhance Alibaba’s image but also contribute to the growth of Taiwan economy. Industrial analysts have shared their perspective that the stake ownership would improve the motivation levels of its workforce and enthusiasts.
Alibaba’s officials should ensure that its associate’s funds are utilized in the best possible manner; otherwise, it might fail to meet the expectations of its shareholders. These direct investments would benefit both parties. Ant Financials would enjoy three of the five director seats and one supervisor seat out of two, in Cathay. Analysts are positive about the collaboration and excited to forecast the future of these corporate giants, whereas both parties are ambitious to work together in market.
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