Fanhua Inc. is a leading independent financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of life insurance and property and casualty products to individuals. 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.
In 1998, our founders, Mr. Yinan Hu, our current board director and Mr. Qiuping Lai, 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 strategically focus on providing regular life and health insurance products including individual whole life insurance, critical illness insurance, annuity, term life insurance, endowment life insurance and participating insurance. In addition, we also provide property and casualty insurance products such as accidental insurance, travel insurance, homeowner insurance and indemnity medical insurance. We also provide insurance claims adjusting services as well as referral of certain insurance trust, health care and senior care services as value-added services to our customers to cater to the needs of the aging population in China.
Commissions and fees from our life insurance agency business, P&C insurance agency business and claims adjusting services each accounted for 76.2%, 6.4% and 17.4% of our total commission and fee revenue in the third quarter of 2023.
Individual Accident Insurance. The individual accident insurance products we distribute generally provide a guaranteed benefit during the coverage period, which is usually one year or a shorter period, 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. These products typically require only a single premium payment for each coverage period. Because most of the individual accident insurance products we distribute are underwritten by property and casualty insurance companies, we classify individual accident insurance products as property and casualty insurance products.
Travel Insurance. The travel insurance products we distribute are short-term insurance providing guaranteed benefit in the event of death or disability and covering travel-related emergencies and losses, either within one's own country, or internationally. These products typically require only a single premium payment for each coverage period.
Homeowner Insurance. The homeowner insurance products we distribute primarily cover damages to the insured house, along with furniture and household electrical appliance in the house caused by a number of incidents such as fire, flood and explosion.
Indemnity medical insurance. The indemnity medical insurance products we facilitate typically have a one-year term and provide conditional reimbursement for medical and surgical expenses incurred for treating illnesses during the coverage period. These products typically require only a single premium payment for each coverage period. Because most of these medical insurance products we distribute are underwritten by property and casualty insurance companies, we classify indemnity medical products as property and casualty insurance products.
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 Health Insurance
The individual health insurance products we distribute primarily consist of critical illness insurance products, which provide guaranteed benefits for specified serious illnesses and medical insurance, which provides conditional reimbursement for medical expenses during the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.
Individual Endowment Life Insurance
The individual endowment products we distribute generally provide insurance coverage for the insured for a specified time period and maturity benefits if the insured reaches a specified age. The individual endowment products we distribute also 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.
The individual annuity products we distribute generally provide annual benefit payments after the insured attains a certain age, or for a fixed time period, and provide lump sum payment at the end of the coverage period. In addition, the beneficiary designated in the annuity contract will receive guaranteed benefits upon the death of the insured during the coverage period. In return, the purchaser of the annuity products makes periodic payments of premiums during a pre-determined accumulation period.
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 interest is paid upon the death of the insured.
Individual Term Life Insurance
The individual term life insurance products we distribute provide insurance coverage 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.
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.
We offer the following insurance claims adjusting services:
Before an insurance policy is sold, we conduct a survey of the item to be insured to assess its current value and help our clients determine the insurable value and the amount to be insured. We also help our clients assess the underwriting risk with respect to the item to be insured through surveys, appraisals and analysis.
When an accident involving the insured subject matter has occurred, we conduct an onsite survey to determine the cause of the accident and assess damage. We then determine the extent of the loss to the insured subject matter and prepare and submit a report to the insurance company summarizing our preliminary findings. Upon final conclusion of the case, we prepare and submit a detailed report to the insurance company setting forth details of the accident, cause of the loss, details of the loss, adjustment and determination of loss, an indemnity proposal and, where appropriate, a request for payment.
Disposal of Residual Value
In the course of providing claims adjusting services, we also can appraise the residual value of the insured property and offer suggestions on the disposal of such property. Upon appointment by the insurance company, we handle the actual disposal of the insured property through auction, discounted sale, lease or other means.
Loading and Unloading Supervision
Upon appointment by ship owners, shippers, consignees or insurance companies, we can monitor and record the loading and unloading processes of specific cargos.
We provide consulting services to both the insured and the insurance companies on risk assessment and management, disaster and damage prevention, investigation, and loss assessment.
We are headquartered in Guangzhou, China (60/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. For long term life insurance products, in addition to initial commissions, we are also entitled to receive renewal commissions as long as the policyholders continue to pay renewal premiums to renew the insurance policies.
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.
As of March 31, 2023, we had established business relationships with 139 insurance companies in the PRC. For the first nine months of 2023, our top five insurance company partners were Sinatay Life Insurance Co., Ltd, Aeon Life Insurance Co., Ltd., Lian Life Insurance Co., Ltd., Aixin Life Insurance Co. Ltd. and Huaxia Life Insurance Co., Ltd. by net revenues.
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.
Since our IPO in 2007, the Company has actively returned cash to our shareholders to maximize shareholder return by distributing an accumulated amount of dividend payouts of US$268.3 million to our shareholders and spent US$107.7 million on share buyback, representing over 50% of our accumulated operating cash flow since IPO.
For future dividends, if any, our board of directors has discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium account, and provided always that in no circumstances may a dividend be paid unless, immediately following the date on which it is to be paid, our company will be able to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. The timing, amount and form of 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.
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