US-Listed Chinese InsurTech Firm Optimistic Despite the Challenges

Waterdrop Incorporated’s executives expressed their bullishness about the insurance technology company’s long-term prospects.

They cited their perspectives during an earnings conference call last Friday, September 9, 2022. We want to keep our avid followers, especially those who are US stock market investors, well-informed about the latest happenings in the equity markets.

We believe this update regarding the US stock market-listed Chinese insurtech firm Waterdrop Incorporated will interest them, so we are posting it on our website.

Waterdrop Incorporated is a major technology platform dedicated to healthcare and insurance services with a positive social impact.

This Beijing, China-headquartered company is listed on the New York Stock Exchange or NYSE and trades as a United States stock market-listed company with the stock ticker symbol WDH.

Waterdrop Incorporated had its stock opening in its initial public offering or IPO held on May 6, 2021 at US$12 apiece. This insurtech player’s valuation at its IPO was US$4.7 billion, and it raised funds amounting to US$360 million at that time.

Waterdrop Incorporated’s executives are optimistic, per the news report posted online by New York City-based financial services company S&P Global.

They cited that China’s aging population translates to the fact that the demand for insurance will surge in the coming years.

China is considered a vastly underinsured market compared to the United States at the time of writing this update. Insurance technology or insurtech players like Waterdrop Incorporated see this reality as providing a runway for growth.

In a recent report, German multinational insurance firm Munich Re Group noted that only about 2 percent of economic losses natural catastrophes caused in China are insured.

The Waterdrop Incorporated executives’ views come as Chinese firms in the insurance space listed on leading US stock exchanges all have witnessed their stocks plunge precipitously over the past year.

These companies are Fanhua Incorporated which lost 0.39 percent for the week ending last Friday, Tian Ruixiang Holdings Limited, which rose 13.70 percent, and Huize Holding Limited, which was up 11.24 percent.

Waterdrop Incorporated’s shares have followed the same downward spiral as its US insurtech peers. This Chinese insurtech’s stock closed at US$1.20 last Friday, which is way below its US$12-share price after its May 2021 IPO.

With US stock market-listed Chinese insurance stocks struggling, life insurance and annuity product provider China Life Insurance Company Limited officially exited the NYSE last Friday, September 2, 2022.

This event happened amid an ongoing standoff between the governments of the United States and China.

Nonetheless, these two nations recently reached a compromise to permit Chinese companies remaining on US stock exchanges to have their accounts audited in Hong Kong.

US stock market analysts believe the Chinese insurance market’s future is not as gloomy as the figures for those listed in the United States might suggest, like Waterdrop Incorporated.

Their opinions come as the general decline in a Chinese stock array, or the broader S&P China Broad Market Index, is down by approximately 40 percent since Waterdrop Incorporated’s IPO.

We appreciate the positive viewpoints of Waterdrop Incorporated’s management. We think investors should also feel optimistic.

They should not lament the departures of US stock market-listed Chinese insurance players like China Life Insurance Company Limited from US stock exchanges and these companies’ equity prices recently crumbling.

After all, we agree that the insurance market has many promising possibilities, especially in the Chinese market, where many people are underinsured.

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