CNinsure, a China-based insurance intermediary, said that it will invest a total of RMB500m from 2011 to 2013 to build up its e-commerce insurance platform for the sales of commodity-type insurance products.
Through the insurance platform, CNinsure will sell auto insurance, accident insurance, travel insurance and homeowner property insurance.
The insurer is expected to introduce a price comparison website in the fourth quarter of 2011, that will provide price quotes across multiple insurance carriers, product comparison and recommendation, online transaction processing, and nationwide customer services.
According to the insurer, the estimated investments for the the build up will be RMB100m, RMB200m and RMB200m, respectively, in 2011, 2012 and 2013.
Nearly 80% of the investment is likely to spend on marketing and advertising, while the 20% on the construction of the IT infrastructure and call center.
CNinsure expects that its e-commerce insurance business will become profitable in 2014.
CNinsure chairman and CEO Yinan Hu said in order to grasp the opportunity and maintain the competitive edge in insurance distribution, it has become a pressing task for us to launch the own e-commerce insurance platform and establish strong brand awareness at the earliest possible time through making investment in an expedited manner.
"We believe that this strategic investment will provide us with a great opportunity to benefit from the rise of e-commerce in China and yield high returns in the long run," Hu said.