Cunzhen Qiushi provides insurance knowledge-based content and insurance product reviews. Credit: Myriam Jessier on Unsplash.

Chinese insurance technology platform Waterdrop has signed a deal to purcvhase Shenzhen Cunzhen Qiushi Technology and its subsidiaries, collectively called Cunzhen Qiushi.

Waterdrop said it will acquire a 100% equity stake in Cunzhen Qiushi for CNY360m ($50.4m).

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Set up in 2018, Cunzhen Qiushi is engaged in providing insurance knowledge-based content and insurance product reviews via multiple online channels.

The platform is used to attract users and convert them into insurance customers to generate commission.

Waterdrop will acquire the company in multiple closings, with the first expected to take place this month, which will see it acquire a 56% stake in Cunzhen Qiushi.

At the second close, which is anticipated to happen within six months after the first closing, the company will purchase 4% of Cunzhen Qiushi’s stake.

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Subject to certain closing requirements, the remaining 40% equity interest in Cunzhen Qiushi will be purchased in three years.

Cunzhen Qiushi will turn into a wholly-owned subsidiary of Waterdrop after the proposed transaction is completed.

Upon completion of the first closing, its financial performance will be consolidated into Waterdrop’s consolidated financial statements.

Earlier this year, Waterdrop announced that it is internally testing a ChatGPT-like application with the aim to deploy it to insurance marketing and services.

Launched in November 2022 by Microsoft-backed OpenAI, ChatGPT is a chatbot that can generate humanlike responses to textual prompts.

The company anticipates that the intelligent chatbot can independently conduct straightforward insurance marketing tasks using speech or text, such as introducing short-term insurance products to customers and responding to their inquiries.