CNinsure to Establish First of Its Kind Independent E-Commerce Insurance Platform in China
March 25 2011 - 4:15PM
CNinsure Inc. (Nasdaq:CISG) ("CNinsure" or the "Company"), a
leading independent insurance intermediary company operating in
China, today announced that it expects to invest a total of RMB500
million from 2011 to 2013 to build up its e-commerce insurance
platform for the sales of commodity-type insurance products, such
as auto insurance, accident insurance, travel insurance and
homeowner property insurance.
CNinsure anticipates to launch a price comparison website in the
fourth quarter of 2011, which will provide price quotes across
multiple insurance carriers, product comparison and recommendation,
online transaction processing, and nationwide customer services. It
will be the first independent e-commerce insurance platform that
offers those functions in China.
The estimated investment will be RMB100 million, RMB200 million
and RMB200 million, respectively, in 2011, 2012 and 2013.
Approximately 80% of the investment will be spent on marketing and
advertising, and approximately 20% on the construction of the IT
infrastructure and call center. CNinsure expects that its
e-commerce insurance business will become profitable in 2014.
Commenting on the strategic investment in the e-commerce
insurance platform, CNinsure's chairman and chief executive
officer, Mr. Yinan Hu, stated, "The recent upsurge of B2B and B2T
sales model has transformed people's consumption behavior pattern
in China. According to a report released by the China Internet
Network Information Center, among the 457 million netizens in China
in 2010, 161 million are online shoppers, representing a growth of
48.6% from the previous year. Online shopper ratio has increased to
35.1% from 28.1% a year ago. Statistics from iResearch also show
that online sales volume has increased 89.4% to RMB498 billion in
2010. The era of e-commerce insurance will soon arrive. In order to
grasp the opportunity and maintain our competitive edge in
insurance distribution, it has become a pressing task for us to
launch our own e-commerce insurance platform and establish strong
brand awareness at the earliest possible time through making
investment in an expedited manner."
He continued, "The massive investment will inevitably impose an
adverse impact on our financial performance in the near-to-medium
term. However, the launch of an e-commerce platform will once again
place us in an advantageous position in the insurance intermediary
market, making us the only and first insurance intermediary that
has established multiple distribution channels encompassing
on-the-ground sales network as well as telemarketing and online
sales operation. We believe that this strategic investment will
provide us with a great opportunity to benefit from the rise of
e-commerce in China and yield high returns in the long run."
About CNinsure Inc.
CNinsure is a leading independent 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 domestic and foreign
insurance companies operating in China, and provides insurance
claims adjusting 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 insurance products online, 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 March 26, 2011, and CNinsure undertakes no
obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or 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.
CONTACT: Oasis Qiu
Investor Relations Manager
Tel: +86 (20) 6122-2777 x 850
Email: qiusr@cninsure.net
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