Longwan introduces innovative insurance model to promote technology commercialization

The signing ceremony for the "investment first and equity second" insurance agreement is held in Longwan. [Photo/Wenzhou News]

The science and technology bureau of Longwan district in Wenzhou, Zhejiang province, the Longwan branch of PICC Property and Casualty, and Zhejiang Faraday Laser Technology Co Ltd signed an "investment first and equity second" insurance agreement on May 10.

Initial insurance of 2 million yuan ($287,187) will be provided by the science and technology bureau to a semiconductor laser project carried out by Faraday Laser.

As the first of its kind in the country, this agreement aims to share the risks of scientific research among the government, enterprises, and insurance institutions. "Investment first and equity second" means funds will be first provided to a project in its early stages and transformed into equities when the project turns a profit.

This model will encourage enterprises to conduct research and development and mass produce new products, thus boosting the development of the real economy, said an official from the Longwan science and technology bureau.

In 2021, Longwan became a pilot area for the model initiated by China's Ministry of Science and Technology and the National Development and Reform Commission. More than 20 research teams have applied to participate in the pilot project since then.

As the sole insurer of the innovative insurance model in Longwan, PICC Property and Casualty has said that the insurance focuses on emerging fields such as life sciences and healthcare, laser optoelectronics, digital economy, and new energy and is meant for high-level research institutes, and outstanding enterprises.