Nov. 1 (NBD) -- China's top four delivery firms - Yunda Express, STO Express, YT Express and ZTO Express - unveiled their joint venture called Zhongbang Logistics Insurance in mid-October.

Behind this move is their optimistic attitude towards the booming logistics insurance market.

Sales of return shipping insurance are expected to surge at the imminent Singles' Day (November 11), which has become China's largest online shopping day. The number of returns is predicted to rise after the shopping feast partly due to customers' impulsive buying or merchants' misleading advertising. 

The insurance industry, absolutely, would never miss such opportunities. Huatai Insurance and ZhongAn Insurance were lucky to catch the tide. 

On Singles' Day of 2012, Huatai received return shipping insurance fees of up to 10 million yuan (1.5 million U.S. dollars).

In 2014, ZhongAn Insurance, of which e-commerce behemoth Alibaba has a stake, joined the battle. On Singles' Day of that year, the insurer received 150 million insurance policies with premium income hitting 100 million yuan (15.1 million U.S. dollars), chalking up the single-day insurance policy record of the insurance industry at the time.

In 2015 and 2016, more insurance companies forayed into the niche sector, which in turn offers more types of return shipping insurances.

However, the development of the logistics insurance sector is far behind that of the logistic industry, said an insider of Huize.com, one of the leading online insurance agency platforms in China.

The niche industry is now facing three challenges: First, shipping insurance laws are not well-established, second, types of insurances available on the market are limited, and third, the premium is relatively high.

The involvement of China's top four delivery companies will be helpful to introduce more insurance products suitable for logistics companies while easing burderns on logistics insurance firms, an industry insider told NBD. This would be great for product innovation, he added. 

Email: tanyuhan@nbd.com.cn