Ant Group, the world's largest fintech company, has lost the head of its insurance unit after five years in the job, amid a regulatory shake-out over offerings of financial services by technology companies.
Yin Ming, the acclaimed designer of the mutual aid insurance programme Xianghubao - which means "protect each other" in Chinese - has resigned as the general manager of Ant Group's insurance business, according to a company spokesperson. His replacement is Ant Group's vice-president Shao Wenlan, who has headed the fintech company's private credit scoring and loyalty programme Zhima Credit since June 2019.
"Yin Ming has been a great colleague of ours for the past five years. We strived hard and overcame challenges together, and we appreciate his contributions to the company. We wish him the best of luck in the future," according to the statement by the affiliate company of the South China Morning Post's owner, Alibaba Group Holding.
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Yin has spent most of his career in insurance, starting at China Life's property insurance arm in 2009 before being tapped to lead Ant Group's expansion in the fintech industry in September 2015. Yin could not be reached for comment.
Xianghubao is an online insurance platform introduced by Alipay in October 2018. Photo: Handout alt=Xianghubao is an online insurance platform introduced by Alipay in October 2018. Photo: Handout
Ant Group launched Xianghubao in 2018, a form of crowdsourced insurance product that capitalises on the large user base of China's dominant online payments service to lower the cost of insurance. With more than 100 million members, the platform allows customers to pay close to nothing to receive up to 300,000 yuan (US$46,300) each in medical insurance coverage for 100 types of serious illnesses, each medical bill shared by the entire membership.
The platform slashed the price of access to health insurance. In its first full year of operation, each Xianghubao member paid 29.17 yuan on average for coverage, less than the price of a Starbucks coffee in Shanghai. Ant Group set a maximum cost of 188 yuan per member last year, and expanded the service to provide premium-free coverage of up to 100,000 yuan for Covid-19 treatment.
Ant Group's mascot. Photo: AP alt=Ant Group's mascot. Photo: AP
Yin's departure comes amid a shake-out in China's fintech industry, as regulators are anxious to ring-fence how technology has accelerated and magnified financial services in the country, amid concerns of potential risks to the underlying banking system. It has been a time of reckoning for Hangzhou-based Ant Group, which has grown from a payment service for online shopping into the world's largest fintech company, with more than 1 billion active users and businesses in asset management, insurance and consumer credit.
Ant Group's insurance business reported 52 billion yuan in premium income in the year ended June, including income from Xianghubao and sales for other traditional insurance companies, according to its filing to the stock exchange of Hong Kong. Even though their businesses are not directly comparable, that would place Ant Group's insurance income just behind Ping An Insurance, China Life and Pacific Insurance.
Xianghubao, along with other mutual-aid insurance platforms which are not licensed in China, may face a slew of tighter regulations. The China Banking and Insurance Regulatory Commission (CBIRC) in December issued a consultation paper on tightened regulation about the sale of insurance products over the internet.
Ant Group headquarters in Hangzhou on October 29, 2020. Photo: Reuters alt=Ant Group headquarters in Hangzhou on October 29, 2020. Photo: Reuters
Ant Group, which has pledged to comply with all regulations, may have to close Xianghubao if it cannot meet regulators' requirements, according to the prospectus of its US$35 billion initial public offering, abandoned since November.
It would not be the first to do so. Baidu, the Chinese internet search engine, closed its mutual insurance platform Denghuo Huzhou last August after getting only 500,000 members to join over a full year of operation. Meituan, the food delivery giant, will shut its Meituan Huzhu mutual aid platform on February 1 after 18 months of operation.
In December, Ant Group voluntarily removed the online deposit products offered by banks on its platform to comply with regulatory requirements for online deposit services.
People's Bank of China deputy governor Pan Gongsheng in December instructed Ant Group to return to its origins in online payments and prohibit irregular competition, protect customers' privacy in operating its personal credit rating business, and establish a financial holding company to manage its businesses.
The country's central banker also said Ant must rectify any irregularities in its insurance, wealth management and credit businesses, and run its asset-backed securities business in accordance with regulations.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
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