It’s suddenly springtime for several of China’s most profit-challenged internet companies.
First it was food delivery and local services giant Meituan Dianping reporting its first quarterly net profit since going public a year ago. Now another internet-driven company has delivered similar good news.
This time it’s internet-only insurer ZhongAn Online P&C Insurance Co. Ltd. that has just reported its first-ever profit since its 2017 IPO. The company posted a net profit of about 94.5 million yuan ($13.2 million) in the first six months of the year, reversing a net loss of over 650 million yuan for the same period a year earlier, according to a new filing on Monday.
The company’s gross written premium (GWP) during the year’s first half was up 14.5% to 5.9 billion yuan. ZhongAn Online said the growth was mainly driven by “lifestyle consumption, auto and consumer finance ecosystem businesses.” The insurer said the growth slowed compared with that in 2018 due to strategy shifts, including a more quality-oriented portfolio building consideration given China’s economic growth concerns.
Serving nearly 350 million insured customers in the first half of the year, ZhongAn Online said almost 70% of its online customer services were performed by artificial intelligence. The company’s automation tools reduced the number of human online service staff by 61%, lowered operation costs, and decreased unnecessary losses such as those caused by human corruption, the filing said.
As Chinese struggle for affordable insurance coverage, ZhongAn is particular popular among young consumers for its cheap premiums and promises of high compensation.