BEIJING -- E-commerce giant JD has received the regulatory nod to buy a 30 percent stake in the Chinese unit of global insurance company Allianz SE, furthering its push into the country's financial services sector.
JD has gained approval to invest 483 million yuan (71.2 million U.S. dollars) for a stake in Allianz China General Insurance Co Ltd, the China Banking and Insurance Regulatory Commission said in an online notice released late on Tuesday.
Following the investment, JD will become the second-largest shareholder in the insurance firm. Allianz SE will retain a 50 percent share in the China unit, according to the notice.
Three other investors, China Sinda, Shenzhen Huijing Tongda and Snowlight Capital will take 12.4 percent, 4.27 percent and 3.33 percent stakes in the unit respectively after the transaction.
JD announced its initial plan to invest 537 million yuan to buy a 33.3 percent stake in Allianz China in April.
The partners said they have entered into a long-term partnership to develop a digital insurance joint venture in China.
Liu Qiangdong, founder and CEO of JD, had previously revealed the company planned to launch an internet insurance service, and move into the online brokerage business and internet banking.
In 2015, JD signed strategic cooperation agreements with the Sichuan provincial government to establish an internet property insurance company in the region.
"The development potential of China's insurance sector is vast, and internet heavyweights possess certain advantages moving into the burgeoning industry, as they have mastered huge customer bases, and could launch tailor-made insurance services by utilizing their big data analytics and precise algorithms," said Li Chao, a senior analyst at market research firm iResearch.
JD's move will also encourage traditional insurance companies to expand their online sales channels, and cooperate with more internet giants, such as establishing joint ventures, Li said.
Chinese tech companies are stepping up efforts to tap into the booming online insurance market, including Alibaba Group Holding Ltd and Tencent Holdings Ltd. In 2013, Alibaba, Tencent and Chinese insurance giant Ping An Insurance (Group) Co of China Ltd established the country's first online insurer Zhong An Online P&C Insurance.
Ant Financial Services Group, Alibaba's financial arm, acquired a controlling 51 percent stake in Cathay Century Insurance Co Ltd in 2016.
Tencent holds a 20 percent stake in the Hong Kong unit of the United Kingdom-based insurance group Aviva Plc, and a 15 percent stake in China's Hetai Life Insurance Co.
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