Fanhua Inc. is a leading independent online-to-offline ("O2O") financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals and businesses including property and casualty and life insurance products, wealth management products, and consumer finance services. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency assistance
With 231,5921 sales agents and representatives, 1,304 claims adjustors and 907 sales and service outlets operating in 29 provinces as of December 31, 2016, our distribution and service network reaches some of China's most economically developed regions and some of the most affluent cities in China, such as Beijing, Shanghai, Guangzhou and Shenzhen.
In 1998, our founders, Mr. Yinan Hu, our current board chairman and Mr. Qiuping Lai, our current president, formed two PRC companies, Guangzhou Nanyun Car Rental Services Co., Ltd. and Guangdong Nanfeng Automobile Association Co., Ltd., initially to provide automobile-related services, such as car rental and emergency services. In 1999, we began distributing automobile insurance products on an ancillary basis. In 2001, our founders transferred their interests in the two PRC companies to China United Financial Services Holdings Ltd, or China United Financial Services, a British Virgin Islands company, as part of a series of transactions in which Cathay Capital Group, a private equity group, made an investment by subscribing for 40% of the equity interests in China United Financial Services.
As part of its corporate restructuring to facilitate international fundraising, China United Financial Services incorporated CISG Holdings Ltd., or CISG Holdings, a British Virgin Islands company, in June 2004 to be the holding company for its insurance agency and brokerage businesses and transferred to CISG holdings all of its rights and interests in several PRC insurance intermediary companies it then controlled. In September 2004, Cathay Capital Group subscribed for approximately 27.8% of the equity interests in CISG Holdings.
In December 2005, an entity affiliated with CDH, a private equity firm, subscribe for approximately 26.4% of the equity interests in CISG Holdings.
In anticipation of our initial public offering, we incorporated CNinsure Inc. in the Cayman Islands in April 2007. In July 2007, CNinsure Inc., on a 10,000-for-one basis, issued its ordinary shares to then the existing shareholders of CISG in exchange for all of the outstanding CISG shares. After this restructuring transaction, CNinsure became our ultimate holding company. In Dec. 6th, 2016, the Company changed its name from “CNinsure Inc.” to “Fanhua Inc.” and its ticker symbol from “ CISG” to “FANH” effective from the opening of market in Dec. 7th, 2016, US eastern time.
We provide agency services of P&C insurance products and life insurance products to individual clients, P&C and life insurance brokerage services to institutional clients, claims adjusting services as well as other non-insurance related services. Commissions and fees from our insurance agency business, insurance brokerage business and claims adjusting services each accounted for 79.7%, 13.1% and 7.2% of our total commission and fee revenue for the fiscal year of 2016.
Our main P&C insurance products are automobile insurance. In addition, we also offer other kind of P&C insurance products. The P&C insurance products we offer can be classified into the following categories:
Automobile insurance is the largest segment of property and casualty insurance in the PRC in terms of gross written premiums. We distribute both standard automobile insurance policies and supplemental policies, which we refer to as riders.
Individual Accident Insurance
The individual accident insurance products we distribute generally provide a guaranteed benefit in the event of death or disability of the insured as a result of an accident, or a reimbursement of medical expenses to the insured in connection with an accident, during the coverage period, which usually is one year or a shorter period.
Commercial Property Insurance
The commercial property insurance products we distribute include basic, comprehensive and all risk policies. Basic commercial property insurance policies generally cover damage to the insured property caused by fire, explosion and thunder and lightning. Comprehensive commercial property insurance policies generally cover damage to the insured property caused by fire, explosion and certain natural disasters.
The homeowner insurance products we distribute are primarily home mortgage-based insurance policies. Home mortgage-based policies cover damage to mortgaged property caused by a number of standard risks such as fire, flood and explosion.
The cargo insurance products we distribute cover damage to or loss of goods in transit by sea, land or air.
The hull insurance products we distribute cover vessels against losses, liabilities and expenses caused by natural calamities, negligence of crew members and marine accidents, as well as collision liability.
The liability insurance products we distribute are primarily product liability and employer's liability insurance products. These products generally cover losses to third parties due to the misconduct or negligence of the insured party but exclude losses due to fraud or the willful misconduct of the insured party.
The construction insurance products we distribute cover property damages and personal injury losses caused by natural disasters and accidents in connection with construction projects in China.
Due to constant product innovation by insurance companies, some of the insurance products we distribute combine features of one or more of the categories listed below.
Individual Whole Life Insurance
The individual whole life insurance products we distribute provide insurance for the insured person's entire life in exchange for the periodic payment of fixed premiums over a pre-determined period, generally ranging from five to 20 years, or until the insured reaches a certain age. The face amount of the policy or, for some policies, the face amount plus accumulated interests is paid upon the death of the insured.
Individual Term Life Insurance
The individual term life insurance products we distribute provide insurance for the insured for a specified time period or until the attainment of a certain age, in return for the periodic payment of fixed premiums over a pre-determined period, generally ranging from five to 20 years. Term life insurance policies generally expire without value if the insured survives the coverage period.
Individual Endowment Life Insurance
The individual endowment products we distribute generally provide maturity benefits if the insured reaches specified age, and provide to a beneficiary designated by the insured guaranteed benefits upon the death of the insured within the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period, generally ranging from five to 25 years.
Individual Education Annuity
The individual annuity products we distribute are primarily education related products. They provide annual benefit payments after the insured attains a certain age, e.g., 18, for a fixed time period, e.g., four years, and a lump payment at the end of the coverage period.
We distribute certain universal insurance products that provide not only insurance coverage but also a minimum guaranteed return on the amount the insured puts into an individual investment account. In return the insured makes periodic payment of premiums over a pre-determined period.
Individual Health Insurance
The individual health insurance products we distribute primarily consist of dread disease insurance products, which provide guaranteed benefits for specified dread diseases during the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.
Group Life Insurance
We distribute several group life insurance products, including group health insurance. These group products generally have a policy period of one year and require a single premium payment.
Fanhua began providing insurance claims adjusting services in 2008. For the fiscal year of 2016, commissions and fees from claims adjusting services accounted for 7.2% of our total commission and fee revenue. The insurance claims adjusting services that we offer include pre-underwriting survey, claims adjusting, disposal of residual value, loading and unloading supervision and consulting services.
We are headquartered in Guangzhou, China (27/F, Pearl River Tower, No.15 West Zhujiang Road, Guangzhou, Guangdong 510623, P.R. China)
We received commissions from insurance companies for the distribution of insurance products, which are generally calculated as a percentage of premiums paid by our customers to the insurance companies. We also collect services fees from insurance companies for the provision of claims adjusting services, which are calculated based on the types of insurance involved. For services provided in connection with property and casualty insurance (other than marine cargo insurance and automobile insurance), our fees are calculated as a percentage of the recovered amount from insurance companies plus travel expenses. For services provided in connection with marine cargo insurance, our fees are charged primarily on an hourly basis and, in some cases, as a percentage of the amount recovered from insurance companies. For automobile insurance, our fees are generally fixed and the amounts collected are based on the types of services provided.
We partner with over 70 insurance companies. For the fiscal year of 2016, our top five insurance company partners were PICC Property and Casualty Company Limited, Huaxia Life Insurance Co. Ltd., China Pacific Property Insurance Co., Ltd., Ping An Property & Casualty Insurance Company of China, Ltd., and Tian’an Life Insurance Co, Ltd.
Fanhua's fiscal year ends on December 31.
The Company went public on October 31st, 2007 under the ticker symbol of "CISG".
The Company’s ticker symbol was changed from “ CISG” to “FANH”, effective from the opening of market in Dec. 7th, 2016, US eastern time. It is currently traded on the Nasdaq Global Select Market.
One ADS represents 20 ordinary shares of Fanhua.
On May 21, 2009, our board of directors approved a cash dividend of US$0.011 per ordinary share, equivalent to US$0.22 per ADS, which amounted to a total payment of US$10,037,475. The cash dividend was distributed on or around July 15, 2009 to shareholders of record as of the close of business on June 26, 2009.
On April 23, 2010, our board of directors approved a cash dividend of US$0.013 per ordinary share, equivalent to US$0.26 per ADS, which amounted to a total payment of US$11,862,469.85. The cash dividend was paid on or around June 10, 2010 to shareholders of record as of the close of business on May 20, 2010.
We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Our board of directors has full discretion as to whether to distribute dividends. Even if our board of directors decides to pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
Deloitte Touche Tohmatsu, Hong Kong
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