Insurance Facilitator Huize Eyes $150 Million IPO in New York

The fast-growing Chinese company reported revenue that more than doubled for 2018, reaping benefits in the world's largest insurance market.

Belinda Zhou
    Sep 05, 2019 11:45 AM  PT
Insurance Facilitator Huize Eyes $150 Million IPO in New York
author: Belinda Zhou   

Huize Holding Ltd., an online insurance platform based in Shenzhen, seeks to raise up to $150 million in an initial public offering in the United States.

Huize acts as an intermediary between insurance providers and the users of its platform, without bearing underwriting risks. The company distributes insurance products and services, aiming to help insurance companies serve a large number of purchasers, it said in its preliminary prospectus filed this week with the U.S. Securities and Exchange Commission. Huize also said it is not affiliated with any insurance providers.

Huize said it focuses on China's younger generation, as a large portion of the products it offers include payment terms of 20 years or more. Huize offers 214 life and health insurance products and 861 property and causality insurance products, according to the filling.

Huize reported operating revenue of 451 million yuan ($65.8 million) for the first half-year, at an increase of 148 percent from the same period of 2018. Its annual revenue in 2018 nearly doubled to $74.1 million from the preceding year. 

Last year, Huize turned to profit, reporting $400,000 in income in contrast to bearing losses in 2017. It made $900,000 in profit in the six months through June. It served a cumulative 5.8 million insurance clients as of June 30, it said.

Founded in 2014 by Cunjun Ma and two shareholders, a unit of Focus Technology Co. Ltd. and SAIF IV Hong Kong (China Investments) Ltd., Huize was formally known as Smart Choice Holding Ltd. Ma previously served as the head of a subsidiary of Hua An Property Insurance Co. and has more than 23 years of insurance-related experience. 

China has been the second-largest insurance market in the world since 2015, according to an Oliver Wyman Report cited in the prospectus. From 2013 to 2018, the compound annual growth rate (CAGR) for the insurance market in China increased by 17 percent. Further, the CAGR is projected to rise 13 percent from 2018 to 2023 and reach 6.9 trillion yuan, according to the report.

Huize said its competitors are other online independent insurance products, service platforms, insurance distribution businesses, traditional insurance intermediaries and other online insurance technology players.

Huize said it intends to use the proceeds from its IPO to invest in technology and big data analytics to boost user acquisition and risk management capabilities. The company also said it intends to use the funds to further improve its product and cover general corporate expenses.

Huize's listed underwriters according to its filling include Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., China International Capital Corporation Hong Kong Securities Ltd. and Tiger Brokers (NZ) Ltd. 

The company has applied to list under the symbol "HUIZ" on a stock exchange in New York. 

(Written by Belinda Zhou and Anthony Russo)