JD Capital’s Initiative to Found a Mutual Insurance Association Approved by CIRC

2016-06-23

On June 22, the China Insurance Regulatory Commission (CIRC) officially approved the establishment of three mutual insurance associations, marking the new exploration of mutual insurance (a commonly seen practice in the international insurance sector) and another step towards a multilevel insurance market.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Among the three approved mutual insurance associations, Zhonghui Property was initiated by JD Capital, Xinmei Life by Ant Financial and Huiyou Jiangong by ChangAn Liability Insurance. 175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Global mutual insurance market to maintain strong growth175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

According to CIRC’s Interim Regulations on Mutual Insurance Institutions, mutual insurance is an insurance activity where companies or individuals requiring protection from same-type risks all become a member through contract; a mutual fund would then be established with premiums paid by members; compensation should be provided to those suffering losses from accidents as agreed upon in the contract and insurance benefits to insurant being killed, injured, disabled and diseased or as required by the contract (qualified age and duration).175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Generally, mutual insurance serves as a mutual protection for members who share risks and income and compensate each other, when disaster incurs losses, with premiums paid equally and voluntarily by all members.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

In the history of global insurance industry, mutual insurance came into being before joint-stock insurance and provides many standards for today’s insurance industry. From the early 20th century onward, mutual insurance entered its golden age as countries around the world recognized its legitimacy. 175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Mutual insurance now remains one of the mainstay and mature insurance organization formed in the world. According to International Cooperative and Mutual Insurance Federation (ICMIF) statistics, global mutual insurance contributed US$1.3trn revenue by 2014, 27.1% of the world’s overall insurance market and covering 920mn people.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Zhonghui: To set a role model and support medium, small and micro-sized enterprises175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

In China, mutual insurance is still in its infancy. In 2009, the newly revised Insurance Law of the PRC for the first time clarified the diversified structure of China’s insurance companies: the co-existence of incorporated company, the limited liability company and the mutual insurance company. With the issuance of the New Ten Guidelines in 2014 and Interim Regulations on Mutual Insurance Institutions in early-2015, mutual insurance was first put into practice.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Following the introduction of New Ten Guidelines and Interim Regulations on Mutual Insurance Institutions, the State Council officially approved the pilot projects of mutual insurance after business registration. 175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

As planned, Zhonghui will focus on mutual assistance and target medium/small/micro-sized enterprise in the supply chain or enclosed organization as the entry point; based on value chain and big data and through the Internet, it mainly provides risk management service for micro/small/medium-sized enterprises or merchants throughout life cycle, so as to reduce financing cost and support start-ups and innovation. 175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The establishment of Zhonghui Property Mutual Insurance Association would also boost the Internet finance business as well as financial innovation.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

By leveraging the current industry landscape and existing resources, JD Capital will play its own part in supporting the construction of Zhonghui (up/down-stream client base, investment management and risk control), driving Zhonghui’s synergies with existing businesses and further promoting the strategy of new-type financial innovation.175九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

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