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April 12, 2011updated 13 Apr 2017 8:49am

Warburg Pincus snaps up Chinese life broker

In yet another change in the landscape of Chinas insurance market, Chinese life and general insurance broker CNinsure has sold its 55% stake in Beijing Fanhua Datong Investment Management Company one of its two life insurance distribution units to Winner Sight Global, an affiliate of US private equity firm Warburg Pincus

By LII editorial

In yet another change in the landscape of China’s insurance market, Chinese life and general insurance broker CNinsure has sold its 55% stake in Beijing Fanhua Datong Investment Management Company – one of its two life insurance distribution units – to Winner Sight Global, an affiliate of US private equity firm Warburg Pincus.

The deal was completed in late-March with CNinsure receiving $63.39m in cash and a cash dividend of CNY10m ($1.5m) as consideration.

CNinsure chairman and CEO Yinan Hu said CNinsure had established a life insurance distribution business unit in 2006 and that in 2008 it acquired the 55% stake in Fanhua Datong.

Commenting on the sale of Fanhua Datong, he said: “However, the difference in the two business units’ business philosophies and corporate cultures has been increasingly presenting challenges to us in resources allocation.”

CNinsure paid about $34m in the fourth quarter of 2008 for its stake in Fanhua Datong.

According to CNinsure, in 2010 Fanhua Datong generated net revenue of CNY251m and net income of CNY29.7m.

These results represented 16.9% of CNinsure’s total revenue and 7% of its net income.

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