Posted on Aug 25, 2010 by Sergio Ulloa
South Africa-based health insurance company, Discovery Holdings, has signed an agreement with Ping An Insurance Company to take a substantial stake in Ping An's health insurance subsidiary, Ping An Health Insurance Company, in order to develop the Chinese health insurance market.
The agreement was signed during a trip to Beijing and Shanghai by South African government officials, including the President Jacob Zuma and 12 ministers, as well as a business delegation of over 320 South African business people. The agreement will see Discovery Holdings take an initial 20 percent stake in Ping An Health Insurance, Ping An Group's health insurance subsidiary.
Discovery bought Standard Life's health insurance
unit in the UK earlier this year, enveloping it in its joint-venture with Prudential, PruHealth. With health insurance clients in South Africa and the UK reaching more than 2.9 million, Discovery's experience in running health insurance businesses in both developed and developing insurance markets is seen as a large part in why Ping An picked Discovery for the partnership.
The number of upper- and middle-income households in China reaches 80-90 million, most of which are capable of affording top-up insurance to complement the Social Health Insurance system run by the government. The demand from this segment of the population for insurance products that cover private healthcare services, as well as drugs and diagnostic tests that fall outside the coverage schedule of the Social Health Insurance is increasing, and the government is encouraging health insurance companies to fulfill this need as it tries to roll out the Healthy China 2020 reforms
Ping An Health Insurance is likely to benefit from the strengths of both Ping An Group and Discovery Holdings. Ping An Health Insurance can springboard off the back of Ping An Group's scale, distribution network and experience in the Chinese market, while Discovery brings its array of health products, systems and processes, and data and risk management abilities to the table.
Adrian Gore, the Chief Executive Officer of Discovery Holdings said that "Ping An is an excellent partner. The Group is a leader in the Chinese insurance market, providing immediate scale, brand and distribution capability in this rapidly growing market."
Ping An's Chief Insurance Officer also sees a bright future ahead, adding that "Both Ping An and Discovery have a vision to fundamentally change the markets in which they operate, and provide consumers with innovative, benefit-rich products. Discovery is a global leader in consumer-engaged health care, and we are excited to have them as a partner. Through this cooperation, Discovery will also be able to share the massive distribution channel and customer base brought by Ping An."
Insurance Companies Mentioned:
Discovery is a financial services provider based in Johannesburg, South Africa, and was founded in 1992. Discovery offers health insurance and life insurance in different markets as well as investment services and credit cards. They also have a joint venture life and health insurance companies with Prudential called PruHealth and PruProtect, which are structured under the PruProtection banner.
Ping An Insurance Company
Ping An Insurance (Group) Company of China, Ltd. (Ping An) is engaged in providing a range of financial products and services. The Company focuses on three businesses: insurance, banking and investment. The Company operates in five business segments: life insurance business, property and casualty insurance business, banking business, securities business, corporate and other businesses. The Company's subsidiaries include Ping An Life Insurance Company of China, Ltd. (Ping An Life), Ping An Property & Casualty Insurance Company of China, Ltd. (Ping An Property & Casualty), China Ping An Trust & Investment Co., Ltd. (Ping An Trust), Ping An Securities Company, Ltd. (Ping An Securities), Ping An Bank Co., Ltd. (Ping An Bank), Ping An Annuity Insurance Company of China, Ltd. (Ping An Annuity) and Ping An Health Insurance Company of China, Ltd. (Ping An Health), among others.