Fanhua Announces Spin-off of its P&C Insurance Subsidiaries
October 27 2017 - 4:30PM
Fanhua Inc., (Nasdaq:FANH), (the "Company" or "Fanhua"), a leading
independent online-to-offline ("O2O") financial services provider
in China, today announced that, as part of its transition towards
the fee-based property and casualty ("P&C") insurance platform
model, it has entered into a share purchase agreement with Beijing
Cheche Technology Co., Ltd. ("Cheche"), which operates an online
auto insurance platform. Under this agreement, Fanhua agrees to
sell the equity interests in Fanhua Times Sales & Service Co.,
Ltd., and its P&C insurance subsidiaries (collectively, the
"P&C Insurance Division"), to Cheche for total consideration of
approximately RMB222 million, which represents RMB130 million above
the combined net asset value of the P&C Insurance Division.
Fanhua's plan to change its P&C insurance
business from a commission spread-based profit model to a fee-based
platform model was previously announced on August 22, 2017. Under
the new model, Fanhua will give all participants in the P&C
industry access to CNpad App, through which both P&C insurance
providers and purchasers can transact directly with each other.
The spin-off of its P&C Insurance Division
marks an important step forward towards Fanhua's transition to the
P&C insurance platform model. Starting from October 1, 2017,
Fanhua will no longer charge insurance companies commissions and
pay commissions to sales agents for the P&C insurance business.
Instead, it will charge P&C insurance providers platform
management and technology service fees based on the actual amount
of premiums transacted over CNpad App.
As the result of the transition, Fanhua expects
a substantial decline in both of its total revenues and commission
costs, while its gross margin is expected to improve significantly.
The impact on its operating profit and net profit should be
limited. From a long-term perspective, the Company expect this move
will help elevate its overall profitability.
Mr. Chunlin Wang, Chairman of the Board and
Chief Executive Officer of Fanhua, stated, "The transaction is a
win-win for both parties. It accelerates the transition to our
platform model and allows Cheche to gain quick access to
brick-and-mortar offline support and broader insurance business
resources. We look forward to establishing a strong long-term
business partnership with Cheche."
About Fanhua Inc.
Fanhua Inc., formerly known as CNinsure Inc., is
a leading independent online-to-offline financial services
provider. Through our online platforms and offline sales and
service network, we offer a wide variety of financial products and
services provided by over 90 insurance companies to individuals and
businesses, including property and casualty and life insurance
products. We also provide insurance claims adjusting services, such
as damage assessments, surveys, authentications and loss
estimations, as well as value-added services, such as emergency
vehicle roadside assistance.
Our online platforms include (1) Baoxian.com, a
consumer-oriented online entry portal for comparing and purchasing
hundreds of health, accident, travel and homeowner insurance
products provided by over 30 insurance companies; (2) CNpad App, a
mobile sales support application that helps insurance agents
provide real-time quotations and online transactions of a wide
spectrum of auto insurance, life insurance and wealth management
products to customers; and (3) eHuzhu (www.ehuzhu.com), a
non-profit online mutual aid platform in China.
Our offline insurance distribution and service
networks cover 29 provinces across China, including most
economically developed cities and regions in China.
Forward-looking Statements
This press release contains statements of a
forward-looking nature. These statements, including the statements
relating to the Company's future financial and operating results,
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, 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 Fanhua and the
industry. Potential risks and uncertainties include, but are not
limited to, Fanhua’s ability to attract and retain key personnel
and productive 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 the date hereof, and Fanhua
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
Fanhua 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 Fanhua is included in Fanhua's filings with
the U.S. Securities and Exchange Commission, including its annual
report on Form 20-F.
For more information about Fanhua Inc., please visit
http://ir.fanhuaholdings.com/.
Contact: Oasis QiuInvestor Relations ManagerTel: (8620)
83883191Email: qiusr@fanhuaholdings.com
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