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China Pacific Insurance Announces 2021 Interim Results
China Pacific Insurance (Group) Co., Ltd. (the “CPIC” or the “Group“; Stock code: 601601.SH, 2601.HK, CPIC.LSE) is pleased to announce interim results of the Group for the six months ended 30 June 2021 (the “Reporting Period“).
CPIC reported solid business performance in the first half of 2021. During the reporting period, Group operating income amounted to RMB252.512 billion, a growth of 7.2% year on year. Group net operating profits (OPAT) was RMB18.279 billion, a growth of 4.9% year on year. Group embedded value (EV) amounted to RMB474.431 billion, an increase of 3.3% from the end of 2020. Group assets under management (AuM) amounted to RMB2,565.483 billion, an increase of 5.3% from the end of 2020. Group number of customers amounted to nearly 160 million, and what is worth noting is the Group acquired over 10 million new customers for the first time in half a year.
In the first half of the year, CPIC’s Life insurance new business sales grew rapidly, Property and casualty maintained underwriting profitability, with sustained fast growth of non-auto business. Gross written premiums (GWPs) of CPIC Life amounted to RMB141.449 billion, up by 2.1%. Of this, first year premiums (FYPs) from the agency channel of the individual business realised a growth of 18.5%. OPAT of life insurance reached RMB14.293 billion, up by 6.7%; the residual margin of life insurance amounted to RMB357.713 billion, a growth of 1.9% from the end of 2020. GWPs of CPIC Property and casualty (Consolidated data of CPIC P/C, CPIC Anxin Agricultural and CPIC HK) amounted to RMB82.761 billion, an increase of 6.4%. Of this, non-auto business grew by 28.3% and accounted for 46.1% of total property and casualty insurance GWPs, up by 7.9pt. Automobile insurance enhanced customer retention to push for a shift of growth drivers. Emerging business lines such as health, agricultural and liability insurance maintained rapid development.
In the first half of the year, CPIC persisted in asset allocation through economic cycles and based on profiles of liabilities, with solid investment results. Group AuM amounted to RMB2,565.483 billion, an increase of 5.3% from the end of 2020. Of this, third-party AuM amounted to RMB813.367 billion, an increase of 3.2%.
Specifically, CPIC Property and casualty insurance pro-actively adapted to the comprehensive reform of automobile insurance, pushed for integration of automobile and non-auto insurance business and delivered rapid top-line growth while maintaining underwriting profitability. CPIC Life insurance recorded FYPs growth of high double digits on the back of well-planned and executed business promotion activity and continued innovation in “products + services” focusing on customer demands, with sustained increase in residual margin. As for investment, CPIC made wise decisions, based on a Group-centralised investment research platform, and realised stable investment results amid a volatile market. The Group also established a private equity firm and obtained the qualification for fund management, enhancing deployment in asset management.
Value and long term have been ingrained into our culture and business philosophy. When faced with hard choices, the Group would choose to do the “practical”, “difficult” and “right” thing.
The implementation of the health business strategy got underway. Guangci-CPIC On-line Hospital went operational and launched its first product “CPIC Family Doctor”, a proprietary online management platform for doctors so that each of our customers can access high-quality family doctor services. Our health insurance subsidiary completed shareholding restructuring, and is currently working on “new channels, new products, new technology” to drive transformation. As for industrial investment in health care, on the back of market-based platforms, CPIC established a dedicated equity investment fund focusing on innovative drug, medical equipment and appliances and medical services, with a number of projects underway.
The Group initiated and moved ahead with the big data strategy. A unified data management policy was formulated, with the establishment of a multi-tiered organisational structure from the Group to subsidiaries. The Group proceeded with platform building, data governance and data applications based on an overall blueprint. The mechanism of technology marketisation went operational. CPIC Fintech, which is still in the preparatory stage, signed shared service agreements with other subsidiaries so that it could be more pro-active and efficient in serving their needs. The building of R&D centres also delivered initial success. The centres in Shanghai, Chengdu and Wuhan combine specialisation with collaboration. Going forward, CPIC will establish an innovation R&D centre in the Greater Bay Area, and its construction plan is being reviewed for feasibility. The Group also set up the Data and Intelligence Institute, stepped up recruitment of top-notch talent in the industry, with 7 leading experts now on board. CPIC put in place task forces in 6 areas such as big data, AI, cyber-security, Internet operation, cloud computing and block chain, responsible for development of core technologies with incubation mechanisms initially in shape.
The Group continued to deepen “CPIC Service”. The institution of “Service Officer” was put in place, which covers 5,800 branch offices and stretches across 4 levels of hierarchy, from the Group to key sub-branches. Over 700 senior managers were appointed as Service Officers, working at the front-line of customer service and shouldering the responsibility of “integrating CPIC Service into transformation initiatives”. “Blue Friends”, or CPIC employees in blue uniforms can be seen at the forefront of the fight against the pandemic, on the venue of the China International Import Expo and the Flower Expo, and the site of relief and rescue of heavy rains in Henan Province. “Responsible, intelligent and caring” have become the label of “CPIC Service”.
The Group made progress with sustainable development. Under the leadership of the board, the Group completed the top-level ESG design, and have started to incorporate ESG sustainable development philosophy into daily business operation. The Group vigorously supported motor vehicles running on renewal energy via automobile insurance to encourage green travelling, and provided insurance cover for 424.6 thousand new energy vehicles; the Group tailor made insurance solutions for environmental treatment, green ship-building, advanced manufacturing and new infrastructure, and launched a number of products to boost sustainable development of the ecosystem; the Group conducted green investment in renewable energy, water conservation and environmental protection area by means of debt securities, equity investments and industry funds. The Group is in the process of formulating a Group-level sustainable development strategy covering liabilities, assets and our own operation, so as to attain a new level of sustainable development.