October 28, 2019 / 11:01 AM / 23 days ago

Munich Re's Ergo signs insurance partnership with Great Wall Motor

BERLIN, Oct 28 (Reuters) - Ergo, the retail insurance unit of Munich Re, has struck a partnership with Great Wall Motor and will start selling insurances to car owners in China, both companies announced on Monday.

Ergo and Great Wall Motor, the sixth-biggest car seller in China, are building up a joint venture which will go into operation early next year, the companies said, adding that Ergo would own 49% of the unit, while Great Wall Motor would own 51%.

With the step, the German insurer intends to carve out a stake in a highly-regulated market largely controlled by Chinese vendors, Ergo’s head of mobility solutions, Karsten Crede, said.

Negotiations with Great Wall Motor took more than a year, he added.

Under the agreement, Ergo will earn a percentage on each insurance contract sold. In China, car buyers normally take out insurance immediately when buying their car at a dealership.

Ergo will also insure Great Wall Motor’s production plants and around 1,000 dealerships, the companies said. (Reporting by Alexander Huebner, writing by Tassilo Hummel, editing by Thomas Escritt)

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