ZTO Express (Cayman) Inc., a Shanghai, China-based express delivery company, announced it has joined a seven-member consortium of its peers to set up a logistics insurer.
ZTO said the insurer is being launched to fill the gaps that are not covered by traditional insurance providers.
China’s express delivery industry has experienced rapid growth in recent years but traditional insurance providers do not provide products specifically tailored to cover basic risks in the logistics sector, ZTO explained.
In addition to ZTO, the consortium will consist of STO Express Co. Ltd., Yunda Holding Co. Ltd., Guangzhou Baogong International Freight Agency, Jiangxi Financial Holding Group, Shandong Jingjin Holding Group, and Shanghai YTO Jiaolong Investment Development (Group) Ltd.
The logistics insurer is expected to have registered capital of approximately 1 billion Renminbi (US$151.1 million). ZTO plans to invest approximately RMB 160 million ($24.2 million) and take a 16 percent stake in the insurer.
The establishment of the logistics insurer is still in the early stages and is subject to the approval from China’s insurance regulator, said ZTO, noting that the insurer aims to offer a wide variety of customized products including transportation, property, vehicles, liability and accident insurance.
Source: ZTO Express (Cayman) Inc.