Suning gets regulator approval for insurance brokerage service

A Suning Commerce Group Co store in Changzhou, Jiangsu province.[Photo/China Daily]

NANJING - Chinese retailer Suning will wade into the insurance brokerage service after getting the go-ahead from China's top insurance regulator, the company said on Monday night.

In a circular posted on its website, the China Insurance Regulatory Commission said it has allowed Suning to establish an insurance sales company to market insurance products on the Chinese mainland.

The company, with registered capital of 120 million yuan ($19.8 million), will be jointly founded by Suning and its brick-and-mortar retail chain, Suning Appliance, each holding a stake of 75 and 25 percent respectively.

In addition to marketing insurance products, the newly founded insurance sales company will also be allowed to collect insurance premiums as well as validate and settle claims.

Before obtaining regulator approval for brokerage services, Suning had been selling a broad range of insurance products offered by major insurance firms on its online marketplace, Suning.com, since August 2012.

Suning is in the midst of transitioning from a traditional physical chain store selling home appliances and consumer electronics to a more Internet-oriented retailer seeking to stay relevant in China's increasingly competitive online retail scene.

The company said its new brokerage service will tap Suning's ongoing efforts at integrating its online retail platform and more than 1,600 physical stores to facilitate sales and enhance customer experience.

Suning is also among a group of firms that have obtained licenses from the Ministry of Industry and Information Technology to offer telecom services.

China's leading Internet firms have made inroads into financial services since last year, selling money market funds with higher returns than bank deposits, extending loans to fund start-ups and consumers, and marketing insurance products.

Chinese e-commerce giant Alibaba also launched two insurance products designed by two insurance firms earlier this month. The two products, bringing total sales of 880 million yuan at an expected annualized return of seven percent, were snapped up minutes after their launch by customers of the company's online payment service Alipay.

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