Chinese online insurer, ZhongAn Online P&C Insurance, may soon deliver another market debut.
Nova Insight Technology, an artificial intelligence firm incubated by ZhongAn, has applied for a listing on the Main Board of the Hong Kong Stock Exchange, with JPMorgan Chase and HSBC as joint sponsors.
Founded in 2018 through an investment led by ZhongAn and several financial backers, Nova Insight counts ZhongAn as its largest shareholder, holding a 31.65% stake.
Citing data from consulting firm Frost & Sullivan, 36Kr reported that Nova Insight processed more insurance cases than any other independent AI technology company in China’s insurance sector in 2024. By revenue, it was also the country’s largest AI technology firm providing full-stack risk analysis capabilities for health insurance.
Despite that ranking, Nova Insight has yet to turn a profit as of the first half of 2025. Its prospectus shows that by the end of 2024, it had served more than 90 insurance companies, including eight of China’s top ten insurers by premium income.
However, the company’s dependence on affiliated business and its years of losses have raised market skepticism. As insurers accelerate their adoption of AI, some investors question why ZhongAn would support an independent AI firm instead of developing its own capabilities. Following the initial wave of AI enthusiasm, doubts also remain over how long Nova Insight can sustain market interest without a clear path to profitability.
After RMB 700 million in losses, Nova Insight seeks IPO
Nova Insight holds an insurance intermediary license. Unlike traditional intermediaries that earn commissions, it mainly charges service fees for AI-based solutions.
Its core operations center on AI-driven underwriting and claims processing, powered by two main systems: Alamos and Lop Nur.
Since Alamos launched in 2024, Nova Insight said the platform achieved a 97.5% policy renewal rate in the six months ended June 30. The company reported that it helped clients identify 3–10% of high-risk policyholders, while policyholders who interacted multiple times with its AI agent generated 29% more premium income than before the rollout.
The Lop Nur system automates claims processing, achieving an automated review rate of up to 80%. The fastest cases were reportedly completed in about one minute.
Driven by these offerings, Nova Insight’s revenue grew at a compound annual rate of 65% between 2022–2024. It reported revenue of RMB 345 million (USD 48.3 million), RMB 655 million (USD 91.7 million), RMB 944 million (USD 132.2 million), and RMB 431 million (USD 60.3 million) for 2022, 2023, 2024, and the first half of 2025, respectively. Gross margins were 57.7%, 58.3%, 49.8%, and 51.0% for the same periods.
Nova Insight remains unprofitable, with net losses of RMB 223 million (USD 31.2 million), RMB 240 million (USD 33.6 million), RMB 155 million (USD 21.7 million), and RMB 99.9 million (USD 14 million) across those years. Its accumulated loss now exceeds RMB 700 million (USD 98 million).
Excluding fair value changes in convertible redeemable preferred shares, its adjusted net profit turned positive: RMB 18.5 million (USD 2.6 million) in 2023, RMB 57.5 million (USD 8.1 million) in 2024, and RMB 24.9 million (USD 3.5 million) in the first half of 2025.
In other words, most reported losses stemmed from mark-to-market adjustments rather than core operations. Still, its cash flow remains under strain.
Between 2022 and mid-2025, operating cash flow was negative except in 2024, when it briefly turned positive at RMB 7 million (USD 980,000). The cumulative outflow over the other periods reached about RMB 470 million (USD 65.8 million).
By mid-2025, Nova Insight held RMB 128 million (USD 18 million) in cash and equivalents against current liabilities of RMB 1.7 billion (USD 238 million), suggesting its liquidity was insufficient to cover short-term obligations.
With mounting repayment pressure, the IPO could provide temporary relief. Yet capital markets now favor clear profitability paths over AI hype. For Nova Insight, still struggling to self-finance, the question is whether it can secure a favorable valuation.
Nova Insight’s relationship with ZhongAn
Despite persistent losses, Nova Insight’s backing from ZhongAn provides stability.
ZhongAn is also its largest client. Between 2022 and mid-2025, revenue from ZhongAn reached RMB 270 million (USD 37.8 million), RMB 400 million (USD 56 million), RMB 427 million (USD 59.8 million), and RMB 214 million (USD 30 million), accounting for 78.7%, 61.8%, 45.2%, and 49.6% of total revenue, respectively.
While that reliance has eased, nearly half of Nova Insight’s business still depends on its parent. ZhongAn is also one of its top five suppliers, receiving payments of RMB 12.3 million (USD 1.7 million), RMB 5.4 million (USD 756,000), RMB 3.9 million (USD 546,000), and RMB 1.2 million (USD 168,000) over the same period.
Typically, clients and suppliers maintain opposing interests to preserve margins. When one company serves both roles, cost and revenue structures become transparent, potentially giving one side pricing leverage.
For Nova Insight, this dual relationship may increase exposure to ZhongAn’s operational risks and limit its own resilience.
Although Nova Insight has expanded its external client base, major insurers are notably prioritizing internal AI development.
Its underwriting business still accounts for more than 70% of revenue as of mid-2025. R&D spending was RMB 68.1 million (USD 9.5 million), RMB 69.3 million (USD 9.7 million), RMB 94 million (USD 13.2 million), and RMB 34 million (USD 4.8 million) from 2022 to the first half of 2025, representing roughly 8–20% of revenue.
By comparison, leading insurers invest far more heavily. Ping An Insurance has spent over RMB 50 billion (USD 7 billion) on innovation over the past decade, including RMB 18 billion (USD 2.5 billion) in R&D in 2024, supported by a team of 21,000 developers and 3,000 scientists, among them more than 500 algorithm experts.
The People’s Insurance Company of China manages digital transformation through PICC Technology and PICC Financial Services, while New China Life increased digitalization spending by 10% in 2024.
China Life has built a digital service matrix centered on its life insurance app, automating 95.8% of underwriting. Sunshine Insurance has improved its smart customer service system, with 65% of remote transactions processed without human intervention and a reported 82% satisfaction rate.
These insurers’ extensive datasets spanning underwriting, claims, and customer profiling are critical to pricing accuracy and risk management. Since insurers typically keep such sensitive data in-house, they create high entry barriers for external AI vendors, leaving limited room for independent firms like Nova Insight.
Why pursue an independent IPO?
As insurers expand in-house AI capabilities, Nova Insight’s decision to go public raises questions. For one, why did ZhongAn invest in an external AI company rather than develop solutions internally? Two factors may explain this.
First, while large insurers can afford proprietary AI systems, smaller and mid-sized firms still rely on external vendors for digital transformation. This leaves market space for independent firms like Nova Insight.
Second, ZhongAn’s own financial performance has been volatile, suggesting possible capital recycling motives.
Currently, three shareholders each hold stakes of 10% or more: ZhongAn Insurance with 31.65%, Nova Insight’s chairman and CEO Lu Min with 28.76%, and HongShan with 15.9%.
According to Wind data, ZhongAn’s net profit over the past five years was RMB 554 million (USD 77.6 million), RMB 1.17 billion (USD 164 million), a loss of RMB 1.36 billion (USD 190.4 million), RMB 4.08 billion (USD 571 million), and RMB 603 million (USD 84 million). Operating profit fluctuated similarly. By mid-2025, ZhongAn recorded a net cash outflow of RMB 373 million (USD 52.2 million).
If Nova Insight’s IPO succeeds, ZhongAn could benefit from a valuation uplift and potential partial exit, improving its balance sheet optics.
Market conditions have also turned more favorable. Hong Kong’s average daily turnover rose 118% year-on-year in the first half of 2025, with IPO fundraising surpassing all of 2024 and reclaiming the global top spot.
ZhongAn’s share price has risen more than 40% year-to-date as of October 15, while other major insurers—Ping An, China Pacific, China Life, PICC, and New China Life—have also gained significantly.
Regulatory reforms, including dynamic adjustments to assumed interest rates and unified reporting standards, have reduced liability costs and improved insurers’ balance sheets.
Meanwhile, stable bond yields, a “slow bull” equity market, and looser liquidity under expected US rate cuts have drawn more capital into Hong Kong. Sector valuations remain below historical averages, leading analysts to project continued upside for insurance stocks.
Against this backdrop, if Nova Insight’s IPO proceeds, it could turn ZhongAn’s long-term strategic bet into a well-timed market opportunity.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Wang Hanyu for 36Kr.