CNinsure, Xinguangyuan to launch auto insurance agency

Guangzhou-based independent insurance agency and insurance broker CNinsure Inc. on April 29 entered into an agreement with Jinan- based automobile distributor Xinguangyuan Group, to jointly set up an auto insurance agency called Shangdong CNinsure Xinguangyuan Insurance Agency Co., Ltd.

Under the agreement, CNinsure is set to have 51% holdings in the coming company, which will focus on the automobile insurance business in the eastern Chinese province of Shandong (excluding Qingdao). The to-be-established insurance agency strives for an auto insurance business size of more than 500 million yuan within three years.

The cooperation is a win-win deal. On the one hand, CNinsure can provide a platform for selling insurance policies at a low cost. On the other hand, Xinguangyuan will offer sales networks and maintenance services support. Both sides will cooperate on the basis of resources sharing and core strengths sharing, said Mr. Wang Chunlin, vice president and head of the property and casualty insurance unit at CNinsure.

Industry insiders believed that the in-between cooperation would optimize and adjust the current structure of auto insurance policies sales. Also, the deal is to cut the cost of policies sales. Their experience in auto insurance selling and 4S (sale, service, spare part, and survey) stores' maintenance networks support are expected to offer all-round and professional services for customers.

Established in 1999 in Guangzhou, the capital city of the southern Chinese affluent province of Guangdong, CNinsure is engaged in the distribution of property and casualty and life insurance products underwritten by domestic and foreign insurance companies, and insurance-related services. The insurance intermediary realized its listing on the Nasdaq Global Market in 2007, under the symbol of CISG.

CNinsure now has 35 insurance agencies, insurance brokers and insurance surveyors and loss adjustors. Besides, it also has more than 10,400 registered sales agents and approximately 170 sales and service outlets across eight provinces all over the country. Its sales network covers the nation's four economically faster-growing regions including the Pearl River Delta, the Yangtze River Delta, the Baohai ring, and central and western China.

Xinguangyuan Group is a private enterprise whose businesses span auto sales, auto parts supply, auto maintenance, and auto club. With annual new auto sales of about 2 billion yuan, it is a leader in auto sales and services in Shandong Province. It now has 4S stores of 13 well-known branded autos both at home and abroad.

(US$1 = 6.98 yuan)