Nova Insight steps out from parent’s shadow with IPO plan

The insurance industry services provider is controlled by online insurer ZhongAn, which supplied half of its revenue in the first half of 2025

Key Takeaways:

• Nova Insight has filed to list in Hong Kong, reporting a loss of nearly 100 million yuan in the first half of this year
• The provider of AI-powered insurance underwriting and claims solutions counts online insurer ZhongAn, venture capital luminary Neil Shen and Lenovo among its backers

By Bai Xin Rui

Artificial intelligence (AI) has won attention for the way it’s revolutionizing online searches, but its applications go far beyond simple research for internet users. In the commercial realm, insurers are increasingly leveraging AI to help with their underwriting and claims resolution. Nova Insight Technology Ltd. is aiming to reel in investors with its leadership status in that space, following its application to list in Hong Kong this month.

The company is positioned quite nicely, helping insurers to operate their underwriting and claims processes more efficiently. But it could also use a lesson in risk diversification – a major focus of insurers – since its heavy reliance on controlling shareholder ZhongAn Online (6060.HK) sticks out as one of its own biggest weaknesses.

Founded in October 2018 by Chairman Lu Min and co-launched by ZhongAn, Nova Insight started out by offering its core claims management services targeting insurers’ back-end operations, fraud detection and digital risk analysis. It began integrating AI technology into its claim solutions in 2023, and later secured pre-IPO funding from PC giant Lenovo, as well as a private vehicle backed Neil Shen, famous in Chinese venture capital circles for his leadership at HongShan, previously known as Sequoia China.

Underwriting cash cow

The company’s two core businesses, AI underwriting solutions and AI claim solutions, generated revenue of 320 million yuan ($45 million) and 110 million yuan, respectively, in the first half of 2025. Their respective gross profit contributions were slightly more skewed, with underwriting solutions providing 181 million yuan, or 83% of the total, while 37.89 million yuan, equal to the remaining 17%, came from claim solutions.

The company’s platform processed more than 200 million underwriting reviews and claims investigations through June this year, facilitating 10.7 billion yuan in first-year premium collections, according to the listing document. Its solutions helped customers achieve an enviable 97.5% policy renewal rate, as well as a 63% cross-selling rate to their own clients, significantly outpacing the industry average of 15% to 25%.

The company’s underwriting solutions improve pricing and risk analysis workflows for insurers before they issue policies, refining policy terms and risk assessments to achieve the best results. Such services helped the company’s clients filter out between 3% and 10% of high-risk applicants through the end of June, with the average case requiring less than one second to assess. Nova Insight’s revenue comes from fixed fees of 2 yuan to 20 yuan per underwriting evaluation, plus success-based “savings fees” — capturing 20% to 50% of insurers’ expected claims payment reductions flagged by its models.

Meanwhile, the company’s AI claim solutions division uses data analytics to pinpoint unusual medical filings and properly assign adjudication liability. The company stresses its automated pipeline typically processes routine cases within one to 30 minutes — far faster than traditional labor-intensive methods typically requiring between three and seven days. It allows automated settlement of claims in more than 80% of cases without manual intervention.

Since its inception, the company aided insurers in reviewing 15.4 million claims by the end of June 2025. Its pricing is based partly on the underlying policy type and the difficulty level for adjudication. Fees per settled claim range from 5 yuan to 1,200 yuan.

The company operates in a sector with big potential for adoption of such technology. The market for health insurance AI technology in China, encompassing underwriting and claims resolution, is expected to grow 16.6% annually from 194.4 billion yuan last year to reach 419.1 billion yuan by 2029, according to third-party market data in the prospectus.

That market is relatively concentrated, with the top five players collectively controlling 50.9% last year. Nova Insight was the fifth among that group with 4.1% share. But the company says it had an important differentiator from the other top players with its “full stack solutions” bundling risk profiling, underwriting and claims services. The company says that uniquely positions it as China’s premier provider of a full spectrum of risk analytics across insurance underwriting and claims settlement using AI.

Falling margins

Despite the industry’s and its own rapid growth, Nova Insight’s gross margin fell 1.5 percentage points year-over-year to 51% in the first half of this year. The company posted a net loss of 99.9 million yuan for the six-month period, though that marked a 30.9% improvement over a year earlier. Its client base expanded modestly to 163 by June, up by three from the end of 2024.

But that number was slightly misleading, since more than half of Nova Insight’s revenue has consistently come from ZhongAn. The company is trying to wean itself from such heavy reliance, reporting the share of its revenue from ZhongAn fell from 78.7% in 2022 to 49.6% in the first half of this year. Still, relying on a single source for half of your revenue is not the healthiest situation for any company, even when that source is your parent.

Hong Kong currently lacks any listed companies specializing in AI insurance, making pure comparisons difficult for valuation purposes. In terms of AI companies, Fourth Paradigm (6682.HK), with a market cap near HK$20 billion ($2.57 billion), trades at a forward price to sales (P/S) ratio of 3.5 times. Meanwhile, AI solutions provider AInnovation Technology Group (2121.HK), with a market cap of roughly HK$4.5 billion, trades at a projected P/S ratio of 2.2 times. Using those as guidelines, Nova Insight might be considered overvalued if it tries to list at a P/S multiple above 4 times. At the other end of the spectrum, a ratio below 2 might make it look like quite a good value.

With IPO fever gripping the Hong Kong market and especially strong appetite for AI plays, Nova Insight could warrant strong investor consideration if it doesn’t price its shares too aggressively.

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