GUANGZHOU, China, July 29 /PRNewswire-Asia-FirstCall/ -- CNinsure
Inc. (Nasdaq: CISG), (the "Company" or "CNinsure"), a leading
independent insurance intermediary company operating in
China, today announced the
acquisition of majority equity interest in InsCom Holding
Limited("InsCom"), which beneficially owns 100% equity interest in
Shenzhen InsCom E-commerce Co., Ltd. ("Shenzhen InsCom"), a leading
independent online insurance service provider in China. The transaction is expected to close in
the fourth quarter of 2010, subject to certain consents,
authorizations and other customary closing conditions.
Headquartered in Shenzhen, a
special economic zone in south China, Shenzhen InsCom currently operates a
widely recognized independent e-commerce insurance website in
China that offers a variety of
insurance products online as well as the most up-to-date industry
and regulatory information.
Pursuant to the agreement with the selling shareholder, CNinsure
will acquire 65.1% equity interest in InsCom for RMB84 million. Meanwhile, as part of the
corporate restructuring of InsCom, CNinsure's equity interests in
six of its affiliated property & casualty insurance agencies
will be transferred to an affiliated subsidiary of InsCom in
exchange for preference shares newly issued by InsCom. With the
preference shares, CNinsure is entitled to all of the profits of
InsCom for a certain period and reserves the right to require
InsCom to redeem the preference shares.
Upon completion of the transaction, the operation of Shenzhen
InsCom will come under the leadership of Mr Chunlin Wang, head of CNinsure's property &
casualty insurance business unit, who will serve as Chairman and
CEO, and Mr Yuan Tian, the former Chairman and CEO of Shenzhen
InsCom, who will be the vice president.
Commenting on the acquisition, Mr. Yinan
Hu, Chairman and CEO of CNinsure, stated, "We are thrilled
to announce the strategic acquisition of InsCom. It is a milestone
that marks our step forward into the online insurance distribution
business which we expect will enjoy flourishing growth in the
coming years as consumers are inspired by the convenience of buying
daily commodities online and begin to place their interests in
shopping online for commodity-typed insurance products such as auto
insurance, accident insurance, homeowner insurance and travel
insurance etc."
"The change in consumption habits must come with changes in how
insurance is sold. We expect that the traditional way of insurance
distribution that primarily relies on on-the-ground distribution
will be replaced by a multi-channel distribution system, which will
create substantial room for the development of online-sales and
telemarketing. Bringing InsCom in-house is one of our proactive
strategies that respond to the emerging market trends."
Mr Hu continued, "Upon acquisition, we will allocate resources
to further strengthen InsCom's existing call center and e-commerce
platform. In the meantime, we understand how essential it is for
online and offline integration. Therefore, we intend to combine the
brand-new call center and the reinforced e-commerce platform of
InsCom with CNinsure's nation-wide distribution and service network
established during its over ten-year operating history to
supplement online sales with ground support. With proper
integration, and by sharing our customer base and technology
competencies, we expect the acquisition will generate compelling
synergies for both parties. We are also confident that CNinsure who
can always adapt itself to market changes in a proactive manner
will be able to further entrench its leading position in the long
run and maintain its stable and sustainable development."
About CNinsure Inc.
CNinsure is a leading independent insurance intermediary company
operating in China. CNinsure's
distribution network reaches many of China's most economically developed regions
and affluent cities. The Company distributes a wide variety of
property and casualty and life insurance products underwritten by
both domestic and foreign insurance companies operating in
China, and provides insurance
claims adjusting service as well as other insurance-related
services.
Forward-looking Statements
This press release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward-looking statements by
terminology such as "will," "expects," "believes," "anticipates,"
"intends," "estimates" and similar statements. Among other things,
the management's quotations and the Business Outlook section
contain forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about CNinsure and the industry. Potential risks and
uncertainties include, but are not limited to, those relating to
CNinsure's limited operating history, especially its limited
experience in selling life insurance products, its ability to
attract and retain productive agents, especially entrepreneurial
agents, its ability to maintain existing and develop new business
relationships with insurance companies, its ability to execute its
growth strategy, its ability to adapt to the evolving regulatory
environment in the Chinese insurance industry, its ability to
compete effectively against its competitors, quarterly variations
in its operating results caused by factors beyond its control and
macroeconomic conditions in China
and their potential impact on the sales of insurance products. All
information provided in this press release is as of July 29, 2010, and CNinsure undertakes no
obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or to changes in its
expectations, except as may be required by law. Although CNinsure
believes that the expectations expressed in these forward-looking
statements are reasonable, it cannot assure you that its
expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the
anticipated results. Further information regarding risks and
uncertainties faced by CNinsure is included in CNinsure's filings
with the U.S. Securities and Exchange Commission, including its
annual report on Form 20-F.
SOURCE CNinsure Inc.