Chinese fintech ZhongAn Insurance has joined forces with Alibaba’s cloud computing service provider, Aliyun, to launch the first “cloud computing insurance” cover in the country.
Chinese fintech ZhongAn Insurance has joined forces with Alibaba’s cloud computing service provider, Aliyun, to launch the first “cloud computing insurance” cover in the country.
ZhongAn became the first company in China to be issued an internet online insurance license in 2013 and was founded by a triumvirate of Alibaba’s Jack Ma, Tencent Holdings’ Pony Ma and Ping An Insurance’s Ma Mingzhe.
The announcement comes on the back of a $1 billion USD investment into Aliyun by Alibaba in August last year as part of a broader move to expand Aliyun’s international presence in addition to supporting research and development in cloud computing, big data, and the building of a business ecosystem.
The new insurance policy will provide customers with cover for problems pertaining to information security and cloud services.
It also insures users for data privacy and data destruction that has been caused by a cyber-security breach or attack, with compensation as high as one million yuan (US$152,000).
According to recent forecasts by IDC, the scale of cloud computing infrastructure in China would surpass $1 billion US dollars this year, having already reached USD 902.8 million in 2014.
However, IDC confirmed that barriers to entry for foreign market players are still perceived as a significant hurdle when it comes to cloud computing in China.
“While Chinese cloud service providers push for overseas expansion, their foreign counterparts are grappling with China’s policy barriers to offer their solutions in the Chinese market,” an IDC release states.
“In the face of quickly growing market demand, foreign IT companies are increasingly keen to enter China’s cloud service market, but first they have to address the Chinese government’s cloud computing and data security concerns and related policy issues.”
As of August last year, only a small number of global players have made their cloud service available in China, including Microsoft’s Windows Azure and Amazon’s AWS.
For ZhongAn, the move is seen as a consolidation of their growth and rapid rise to power, having raised $931.3 million USD in its first round of fundraising, as well as being valued at $10 billion USD valuation in the past year.
More recently, ZhongAn were recognised as the leading established fintech company worldwide, in a December, 2015 report penned by KPMG and H2 Ventures.
It remains to be seen the extent to which the move by ZhongAn Insurance and Aliyun will help drive increased demand for cloud services in China’s financial services sector, as more and more foreign players look to enter the market.
