China Reinsurance: Gross Written Premiums in 1H2020 Surge 20.5% Y-O-Y

Total Investment Yield Rises to 5.48%

Maintains Rating of "A" by S&P Global and "A(Excellent)" by A.M Best.

HONG KONG, Aug. 31, 2020 /PRNewswire/ -- China Reinsurance (Group) Corporation ("China Re Group" or "the Group"; Hong Kong Stock Exchange stock code: 01508.HK) today announces the unaudited interim results for the six months ended June 30, 2020 (the "period under review"). As the market leader/leading player in China's reinsurance industry, China Re Group's operations demonstrated strong resilience against the impact of COVID-19. In the period under review, the Group achieved rapid growth in premiums, investment outperformance and steady profitability excluding the impact of COVID-19 to its overseas business, while emphasising the rollout of strategic initiatives and prudent risk management.

Financial Summary

RMB in million

1H2020

1H2019

Change (%)

Gross written premium

102,123

84,772

20.5%

Net profit

2,749

3,616

-24.0%

Net profit attributable to
shareholders of the parent

2,467

3,320

-25.7%

EPS (RMB)

0.06

0.08

-25.7%

Annualized total investment
yield (%)

5.48%

5.19%

+0.29 ppts


30 June 2020

31 December 2019

Change (%)

Total assets

477,407

396,638

20.4%

Total liabilities

379,245

299,660

26.6%

Net assets per share (RMB)

2.07

2.05

1.1%

Comprehensive solvency
adequacy ratio

192%

209%

-17 ppts

In the first half of 2020, China Re Group showed strong resilience and achieved good results:

Rapid growth in premiums. In the first half of 2020, gross written premiums of the Group increased 20.5% year-on-year (YoY) to RMB102.1 billion, of which the gross written premiums by the P&C reinsurance business increased 17.6% YoY to RMB27.1 billion; gross written premiums by L&H reinsurance business increased 31.4% YoY to RMB50.5 billion; gross written premiums of Primary P&C insurance business saw an increase of 5.7% YoY to RMB25.8 billion.

Outperformance of investment results. With the decline in interest rates and the volatile capital markets, the Group seized opportunities to optimize its portfolio allocation. Annualized total investment yield was 5.48%, representing a YoY increase of 29 basis points (bps), making the Group's equity investments outperformed the market.  

Steady profitability excluding the impact of COVID-19 to overseas operations. As Covid-19 continues to affect the world, the Group's operations showed strong resilience. With orderly resumption of work and production in China, the Group recorded a net profit of RMB2,749 million. Profit before tax of the Group excluding the COVID-19 impact on overseas P&C reinsurance business achieved a year-on-year increase of 2.7%.

Continued focus on risk management. In the first half of 2020, the comprehensive solvency adequacy ratios for all insurance entities of the Group remained above 200%. The Group maintained international ratings of "A" by S&P Global and "A(Excellent)" by A.M Best.

Accelerated implementation of strategic initiatives. Strong progresses were made in "platform-based, technology-based and globalisation" initiatives. These includes: the China Belt and Road Reinsurance Pool was established in July 2020, and China Re Group being the presidency of CBRRP, will pool together industry resources to provide comprehensive risk protection for the Belt and Road initiative; China Re P&C Malaysia Branch will soon commence operations, another breakthrough in the Group's overseas presence; A proprietary China earthquake catastrophe model has been developed and applied commercially among a number of insurers; led the revision of China's critical illness table, opening up to new business opportunities; co-launched the "Lifelong Cancer Medical Insurance" to explore the fee adjustment mechanism for long-term medical insurance; co-launched the "Specific Drug Insurance" leading to development of the "Insurance + Specific Drug" market; launched the "China Continent Super APP" platform, integrating the six elements of service, diversion, underwriting, interaction, claims and management into one, transforming from a traditional product model to a technological innovation model.

Despite the pandemic, China Re Group actively seized opportunities and its business units performed solidly with the following highlights:

P&C reinsurance premiums increased rapidly. Premiums of domestic P&C reinsurance reached a new record of RMB18.0 billion, representing an increase of 20.8% YoY, growing faster than the primary insurance industry. The combined ratio of domestic P&C reinsurance was 99.80%, with continued improvement in overall business quality. Overseas P&C reinsurance recorded 14.9% YoY growth in gross written premiums to RMB9.7 billion. The Group's combined ratio excluding the impact of COVID-19 was 92.08%, with significantly better business quality compared with the previous year.

L&H reinsurance premiums grew swiftly, as protection type business was strategically developed. In the first half of 2020, reinsurance premiums of domestic protection-type business increased 24.4% YoY to RMB11.6 billion. Between 2017 to 2020, the compounded annual growth rate of this business was 47.9%. The Group will continue to enhance its 'Data+' and 'Product+' strategies, further exploring the integration of health insurance to achieve better business quality. The combined ratio of short-term protection type business was 97.26%, representing a year-on-year dip of 30 bps.

Primary P&C insurance premiums climbed with a focus on better business quality. In the first half of 2020, motor insurance premiums in primary P&C insurance grew 2.3% YoY to RMB14.2 billion. Non-motor premiums rose 9.7% YoY to RMB11.2 billion. Quality of the motor insurance business became significantly better, as private car coverage now accounted for more than 70% of the business. In surety insurance, the Group has enhanced client access standards, resulting in a gradual decline in bad debt ratio. 

Asset management business secure excess investment returns. While adhering to a value and long-term investment philosophy, the Group actively seized opportunities amid the volatile and low interest rate environment. Total investment income in the first half of 2020 grew 22.8% YoY to RMB7.6 billion. The annualized total investment yield was 5.48%, representing a year-on-year increase of 29 bps.

Going forward in the post-COVID-19 era, the insurance market will face various changes including sharp increase in demand, technological disruptions and business transformation. Meanwhile, the reinsurance market is full of opportunities as insurers seek to cede risks, barriers to entry into the reinsurance industry become higher as market leaders strengthened their positions. In the second half of 2020, China Re Group will adhere to its operational goals of "stabilising growth, adjusting structure, controlling risks and increasing profitability", striving to achieve its annual business targets and attain a new level of high-quality development.

About China Re Group (HKEX stock code: 1508)

China Re Group was co-founded by the Ministry of Finance of the People's Republic of China and the Central Huijin Investment Company Limited. On 26 October 2015, China Re Group was listed on the main board of The Stock Exchange of Hong Kong Limited, becoming the first reinsurance group listed in Hong Kong (stock code: 01508.HK). At present, China Re Group directly controls 5 domestic subsidiaries: China Property & Casualty Reinsurance Company Co., Ltd. ("China Re P&C"), China Life Reinsurance Co., Ltd. ("China Re Life"), China Continent Property & Casualty Co., Ltd. Company ("China Continent Insurance"), China Re Asset Management Co., Ltd. (referred to as "China Re Asset"), Huatai Insurance Agency & Consultant Service Ltd. ("Huatai"); Direct holding overseas subsidiaries mainly include: China Re UK Companies, China Re Underwriting Agency Co., Ltd., etc.; Indirect holdings of overseas subsidiaries mainly include: China Re Asset Management (Hong Kong) Co., Ltd., Chaucer, China Reinsurance (Hong Kong) Co., Ltd., etc.; 4 overseas branches organizations: Singapore branch, London representative office, Hong Kong representative office and New York representative office. For more information, visit http://eng.chinare.com.cn

 

Related Links :

http://eng.chinare.com.cn

Listen
Download SPH RADIO APP
Last Played
Last Played