China has turned its focus to the country’s insurance technology platforms as the nation’s banking and insurance watchdog continues its regulatory crackdown on businesses in a variety of vertical markets, to the dismay of investors around the world.
The latest order instructs insurance companies and local agencies to stop improper marketing and pricing practices and increase user privacy protection, according to a Bloomberg News report. Companies are urged to address these issues voluntarily or face “severe punishment.”
Online insurance had been expected to grow into a 2.5 trillion yuan ($385 billion) industry within the next 10 years, according to Bloomberg. By the end of 2020, more than 140 Chinese insurance companies had launched online businesses, with total premiums of 298 billion yuan ($45 billion) for the year, a China Banking and Insurance Regulatory Commission (CBIRC) official said in a May speech.
Related: PE Firms Pivot To Less Scrutiny-Prone Industries In China
Private equity and venture capital companies are redirecting their strategies from tech industries that are subject to intense scrutiny and sudden changes in regulations, according to a Reuters report on Monday (Aug. 9).
A recent wave of crackdowns by various Chinese agencies, starting with the halting of Ant Group’s IPO, triggered new laws, big fines and plenty of uncertainty and fear.
Also read: Chinese Antitrust Watchdog May Hit Meituan With $1B Penalty
China’s antitrust watchdog will soon hit food delivery platform Meituan with an almost $1 billion penalty, The Wall Street Journal reported on Friday (Aug. 6). As part of the punishment, Meituan would have to change its business processes and put a stop to the “choose one out of two” practice, also known as “er xuan yi.”
In April, regulators met with the nation’s leading tech firms, including Alibaba, ByteDance, Tencent Holdings and Meituan as regulators demanded that digital tech firms follow antitrust regulations.
The Chinese government is putting greater focus on antitrust investigations across an array of domestic technology companies, appearing in facilities without prior notice. The State Taxation Administration, the Cyberspace Administration of China and the State Administration for Market Regulation are said to be among the agencies involved.
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