Online Insurers Enter Cost-Cutting Competition in Evolving Chinese Market

Waterdrop and ZhongAn boast stronger valuations than rival Fanhua after more successful cost-reduction efforts last year Key Takeways: •      Waterdrop reported a significantly narrower net loss in last year’s fourth quarter thanks to aggressive cost cutting •      ZhongAn made its first-ever annual profit from insurance underwriting last year and more than doubled its profit after reducing operating expenses as a proportion of revenue •      Fanhua lagged the other two in cost reductions and reported a modest gain in fourth-quarter operating profit By Warren Yang For companies operating in China’s ever-evolving…

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ZhongAn’s Big-Tech Ties in Focus as Alibaba-linked Ant Trims Stake

Online insurer’s shares tumbled after Ant Group disclosed plan to trim its longtime stake, but later rebounded after Ant affirmed its commitment to their strategic ties Key takeaways: •      Ant Group, one of the three founders of ZhongAn, disclosed last week it trimmed its stake in the digital insurer •      ZhongAn has close business ties to the three parents, especially Ant and its Alibaba affiliate under a platform cooperation agreement By Warren Yang ZhongAn Online P&C Insurance Co. Ltd.’s (6060.HK) ties to Alibaba (BABA.US; 9988.HK), one of its three big-name…

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Fanhua to Leave Wall Street. Next Stop, Hong Kong?

Fanhua has announced a plan to delist from New York, with founder Hu Yinan retaking the company’s helm Key takeaways: Online insurance broker announces plan to privatize as China gets set to roll out tough new regulations in January Company could go public again in Hong Kong, but analysis suggests such a listing would have difficulty achieving a high valuation By Jony Ho Of the three major U.S.-listed Chinese online insurance brokers, the oldest has just announced a plan to go private. That would leave the field with just two,…

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Waterdrop Goes Back to the Well, Cutting Losses by Lowering Costs

The online insurer slashed spending by 26.4% in the third quarter and will keep up its cost-trimming exercise Key takeaways: Waterdrop Inc. reported a net loss of 477 million yuan in the third quarter, narrowing 27.3% quarter-on-quarter Company’s stock has fallen around 90% since its IPO, but its valuation still isn’t low By Fai Pui Cherish “water resources” for a sustainable future. That maxim applies not only to ordinary folks in their everyday lives, but also to online insurer Waterdrop Inc. (WDH.US) in its daily operations, since, “water” is also…

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Waterdrop Stock Splashes to New Depths in Summer of Regulatory Cleanups

Company’s shares are down 22% since release of its latest results showed a swing back to an operating loss as marketing costs soared Key Takeaways: •      Waterdrop posted healthy gains in revenue and paying customers in the second quarter, but swung back to an operating loss as sales and marketing costs soared •      Company’s shares are down more than 75% since their April IPO due to a combination of widening losses and regulatory concerns By Thomas Zhang Nobody wants to see their investment evaporate more than 75% in just four…

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Online Insurance Broker Waterdrop Makes Splash, Then Crash, in New York IPO

Company raises $360 million after pricing shares at the top of their range, only to see stock tank nearly 20% in trading debut Key points: Waterdrop’s position as a middleman insurance broker should help protect it from regulatory risk in China’s sensitive financial services sector The company’s strong IPO pricing, followed by a sharp selloff in its trading debut, reflect investor indecision about its growth prospects  By Doug Young Middlemen are creatures of little or no respect, often seen as parasites that profit from a gap between businesses and the…

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