Alibaba Group Holding Ltd's headquarters in Hangzhou, Zhejiang province. The company, with a 19.9 percent stake, is Zhong An Online Property Insurance Co's biggest shareholder. [Photo / Provided to China Daily]

Alibaba-backed online insurance company becomes nation's first

China's first online insurance firm, backed by the country's leading Internet companies and insurer, has completed its industrial and commercial registration in Shanghai, based on hopes that the existing customer bases and "big data" will fuel business for the virtual venture.

Co-founded by Alibaba Group Holding Ltd, Tencent Holdings Ltd and Ping An Insurance (Group) Co of China Ltd, Zhong An Online Property Insurance Co was all set to go by wrapping up its business registration on Oct 9, becoming the first completely online entrant in China's 1.55 trillion yuan ($253.5 billion) insurance sector.

With a registered capital of 1 billion yuan, the joint venture is headquartered in Shanghai's downtown Huangpu district and aims to focus on enterprise/family property insurance, cargo transportation insurance and liability and guarantee insurance, according to a notice published on the website of Shanghai Administration for Industry and Commerce.

Zhong An did not reveal the progress of the business setup, according to a spokeswoman who asked not to be named, saying that the company will publish its operational conditions "in due time".

Alibaba, with a 19.9 percent stake, is the new company's biggest shareholder. It also declined to comment on the issue.

Ping An Insurance and Tencent each hold a 5 percent stake. There are also six smaller shareholders including online travel agent services provider ctrip.com, IT company Rising Technology Corp Ltd and several investment firms.

Ping An's Chairman Peter Ma, who oversees the world's second-largest insurer by market value, told a news briefing in August that Ping An will leverage Alibaba's and Tencent's Internet strength to cooperate in the insurance industry.

The newly established insurer may sell traditional and innovative new types of policies to millions of users that may include creating policies against fake goods for buyers on Alibaba's Taobao and Tmall platforms. Online games insurance targeting users of Tencent may be viable.

Alibaba and Tencent, both Internet titans, are hoping to transform their huge user bases into diverse sources of income. According to Beijing IT consultancy Analysys International, more than three-quarters of China's online transactions are completed via Alibaba, while Tencent's instant messaging service QQ has recorded some 800 million users.

"The launch of the online insurance business will deal a blow to traditional sales channels such as banks because both firms are at the forefront in the e-commerce and social networking sectors," according to a research note by Zhang Meng, an analyst with Analysys International.