BYD Acquires Online Insurer As Home Base For Auto Insurance Unit

Chinese electric-car giant BYD got a green light from regulators to take over a bankrupt online insurance unit of the scandal-plagued conglomerate Tomorrow Holding with plans to turn it into an auto insurance provider.

The China Banking and Insurance Regulatory Commission (CBIRC) said Tuesday that it approved BYD's 100% acquisition of E An Property & Casualty Insurance. Chinese authorities seized the company three years ago.

BYD will pay 7 million yuan ($1 million) to E An's seven current shareholders, Caixin learned from sources. Five of the shareholders with a combined 70% are affiliates of Tomorrow. BYD will also provide 540 million yuan for restructuring costs, to meet various debt obligations and to beef up the insurer's net assets.

BYD, the Chinese electric-car manufacturer, has received approval from regulators to acquire a bankrupt online insurance business of the scandal-plagued conglomerate Tomorrow Holding, with ambitions to convert it into an auto insurance provider.

The China Banking and Insurance Regulatory Commission (CBIRC) approved BYD's 100% acquisition of E An Property & Casualty Insurance on Tuesday. The corporation was seized by Chinese officials three years ago.

According to sources, BYD will pay 7 million yuan ($1 million) to E An's seven present stockholders. Tomorrow affiliates account for five of the stockholders, accounting for 70% of the total. BYD would also provide 540 million yuan to cover restructuring costs, debt obligations, and to boost the insurer's net assets.

The Shenzhen-based insurer declared bankruptcy in July of last year and began looking for strategic investors shortly after. E An, one of China's first four internet insurers, was formed in 2016.

E An does not currently offer auto insurance. Caixin gathered from sources that after BYD takes over, the company would apply for auto insurance licencing and will conduct associated insurance business for new energy vehicles.

According to a reorganisation plan submitted by BYD, BYD will also contribute 3 billion yuan into E An to ensure that the company has enough capital to carry out the predicted rapid growth of the new energy vehicle insurance industry.

BYD joined a series of automakers including SAIC Motor, GAC Group and FAW Group in setting up their own auto insurance arms or investing in property and casualty insurers and insurance intermediaries.