Ant Financial Buys Majority Stake in Cathay Insurance
DoNews, 7/26/16
Cathay Financial Holdings has announced that Ant Financial, the financial services affiliate of Chinese e-commerce conglomerate Alibaba Group (NYSE: BABA), will inject RMB 833 mln in the Taiwanese financial holding firm's insurance subsidiary Cathay Insurance for a majority stake.
The funds will be added to Cathay Insurance's registered capital and give Ant Financial a 51% stake in the company, while Cathay Financial Holdings will retain a 49% stake in the company through its wholly owned subsidiaries. Prior to this transaction, Ant Financial held a stake in the company, the size of which, however, was not divulged.
Following the move, Cathay Insurance will continue to provide insurance services for Taiwanese companies and citizens that operate in mainland China, but will also explore the role that the mobile internet, cloud computing, and big data could play in the insurance industry. Ant Financial launched its 'Internet Propulsion' initiative in September 2015, placing a renewed emphasis on collaborating with financial institutions in areas such as capital, technology and data. To this end, it hopes to use big data to help better price insurance products relative to their inherent risk and deploy artificial intelligence to assist with online claim settlement. Its aim is to help more than 1,000 traditional financial organizations reorient themselves towards internet finance within the next five years. 78 insurance companies have already joined the initiative, with Cathay Insurance soon to follow.
Editor's Note: For more information on this topic, please see "Ant Financial to Purchase Equity Stake in Cathay Insurance," MD 9/15/15 issue.
Keywords: M&A insurance Internet Alibaba Group BABA Cathay Insurance Cathay Financial Taiwan Ant Financial Group overseas
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