BERLIN -- Ergo, the retail insurance unit of Munich Re, struck a partnership with Great Wall Motor and will start selling insurance to vehicle owners in China.
Ergo and Great Wall Motor, the sixth-biggest vehicle seller in China, are forming a joint venture which will go into operation early next year, the companies said. Ergo will own 49 percent of the unit, while Great Wall Motor will control 51 percent.
Ergo will also insure Great Wall Motor's vehicle assembly plants and around 1,000 dealerships, the companies said.
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 a vehicle at a dealership.