CNinsure Announces Expansion Into Consumer Credit Brokerage Business

GUANGZHOU, China, October 1, 2009/ PRNewswire-Asia-FirstCall/ -- CNinsure Inc. (Nasdaq: CISG) (the “Company” or “CNinsure”), a leading independent insurance intermediary company operating in China, today announced that it has entered into agreements to acquire 20.58% equity interest in China Financial Services Group Limited (“CFSG”), one of the leading consumer credit brokerage companies based in Guangzhou, China, for a cash consideration of RMB85.5million. The transaction will be subject to approval of the boards of directors of various parties to these agreements.

China United Financial Services Holdings Ltd. (“CUFS”), the predecessor of CFSG, originally started as Guangdong Nanfeng Automobile Association Co., Ltd., which was co-founded by Mr. Yinan Hu, Chairman and CEO of CNinsure, and Mr. Qiuping Lai, President of CNinsure, in 1998. In September 2004, CUFS was split into two businesses, with CNinsure, then known as CISG Holdings Ltd., focusing on the distribution of insurance products, and CFSG focusing on the consumer credit brokerage business. As of June 30, 2009, CFSG had 22 subsidiaries in 21 cities of 10 provinces and had established business relationships with approximately 10 leading banks in China. Its revenues were primarily derived from the provision of brokerage services in relation to residential mortgage loans and personal auto loans, particularly pre-owned house mortgage loans. Before the transaction, Cathay Capital Group (“Cathay Capital”), the principal shareholder of CNinsure, owned a controlling stake in CFSG while the management of CNinsure held an aggregate of approximate 8.57% equity interest in CFSG. Mr. Hu and Mr. Lai have been directors of CFSG since November 2006.

Pursuant to the agreements, CNinsure will obtain a 20.58% equity interest in CFSG by subscribing to CFSG’s newly-issued shares. The pre-money valuation is based on [equals to] a multiple of 3.5 times CFSG’s estimated net income in 2010. The managing minority shareholders of CFSG undertake that CFSG will achieve the targeted net income in 2010. If CFSG fails to achieve the set targets, these shareholders will transfer part of their equity interests in CFSG to CNinsure at nominal value. None of CFSG’s existing shareholders will sell any of their equity interests in CFSG in this transaction. Upon the completion of this acquisition, Mr. Hu and Mr. Lai will continue to sit on the new Board of CFSG as designated by CNinsure and Mr. Hu will serve as the Board Chairman.

Commenting on the investment, CNinsure's Chairman and Chief Executive Officer, Mr. Yinan Hu said, “It marks a starting point of our expansion into the consumer financial services sector beyond merely distributing insurance products. It is also the milestone step towards our aim of building a platform to offer one-stop services of multiple financial products and turning the Company into a world-class diversified financial services group.”

“CNinsure and CFSG, as leading players in their respective sectors, both have established extensive sales networks and customer bases. We believe the acquisition will generate compelling synergies for both parties. Firstly, it will enable both companies to further increase their revenues by leveraging each other’s customer database and creating cross-selling opportunities. Secondly, it will help significantly reduce operating costs and enhance operating efficiencies through the provision of an integrated and shared operating and IT infrastructure and back office support.”

He continued, “China’s consumer credit market has experienced a rapid growth in recent years while the consumer credit brokerage sector is still at its initial stage of development with huge upside potential. CFSG, a pioneer in this fragmented yet fast-growing sector, is one of the very few brokerage companies that have established a nationwide network. Given the promising growth prospect in the sector and its first-mover advantage, we expect that the investment in CFSG will deliver great investment returns to CNinsure and contribute to the growth of CNinsure’s earnings per share.”

About CNinsure Inc.

CNinsure is a leading independent insurance intermediary company operating in China. CNinsure's distribution network reaches many of China’s most economically developed regions and affluent cities. The Company distributes a wide variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China, and provides insurance claims adjusting as well as other insurance-related services.

Forward-looking Statements

This press release contains statements of a forward-looking nature. These statements, including the expected benefits of the acquisition, are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. Among other things, the management's quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about CNinsure and the industry. Potential risks and uncertainties include, but are not limited to, those relating to CNinsure's limited operating history, especially its limited experience in selling life insurance products, its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is as of October 1, 2009, and CNinsure undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although CNinsure believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by CNinsure is included in CNinsure's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

For more information, please contact:

Oasis Qiu

IR Officer

Tel: +86-20-6122-2777-850

Email:qiusr@cninsure.net

Source: CNinsure Inc.