After China RE Group (stock code: 01508.HK) had released its 2017 annual results on 28 March, the Chairman, Mr. Yuan Linjiang, and the senior management of the Company held a press conference in Hong Kong on 4 April to share the Company’s business development as well as the progress of the implementation of the strategies with all the investors and the media. As a leading reinsurance company in China, China RE Group unswervingly adheres to the principle of “reinsurance is the core business” as always and moves forward with innovation. In 2017, the Company obtained steady progress in overall operation, achieved remarkable results in many fields and maintained leading market position in the industry.
In 2017, China RE Group adhered to the “One-Three-Five” Strategy as a guide to accelerate innovation, collaboration, and progress. It explored new opportunities in serving the national strategies and real economy, optimized control mechanisms, effectively prevented and controlled risks, and continuously optimized the business structure. The speed and quality of business development continued to improve: Firstly, the scale of premiums exceeded RMB 100,000 million, reaching RMB 105,336 million. The overall growth rate of premiums was 21.5%, a record high in recent years. Secondly, the operating results improved steadily. The net profit attributable to shareholders of the parent company reached RMB 5,256 million; the weighted average return on net assets was 7.22% and remained stable; the total investment yield was 6.01%, an increase of 0.53 percentage points year on year. Thirdly, the position of the Company’s core reinsurance business in the industry continued to be solid. The No. 1 ranking sustained in the domestic reinsurance market for both P&C and life & health segments; and the No. 6 ranking sustained in the primary P&C insurance market with a market share of 3.52%. Fourthly, the business structure continued to be optimized. Overseas business of P&C reinsurance increased by 22.9% year on year; domestic facultative business of P&C reinsurance increased by 50.8% year on year; domestic protection-type business of life & health reinsurance increased by 35.9% year on year; and non-motor business of P&C primary insurance increased by 44.7% year on year. Fifthly, the Group’s solvency remained adequate. The Group’s consolidated aggregated solvency adequacy ratio was 197%. Aggregated solvency adequacy ratios were 218%, 234% and 267%, respectively for China Re P&C, China Re Life and China Continent Insurance. Credit ratings of "A (Excellent)" and "A" were given by A.M. Best and Standard & Poor’s respectively in 2017.
China RE Group attaches great importance to the long-term and stable return to shareholders, and the dividend ratio for 2017 is 38.79%, which exceeds the dividend proportion promised to the shareholders by no less than 30%. The Board of Directors proposed to issue a final dividend of RMB 0.048 (including tax) per share, with a dividend yield of 3.23%.
In 2017, China RE Group continued to promote the "One-Three-Five" Strategy. Major strategic initiatives were launched frequently. The reforms and developments achieved remarkable results: new developments in reinsurance business, new momentum for business synergies, new spotlight for innovation work, new breakthroughs have been made in the construction of catastrophe systems, new blueprints have been portrayed in the construction of Digital China RE, and new situations have been created in the consolidation of basic management.
In respect of the main business of reinsurance, the Company adhered to the "reinsurance is the core business" and vigorously developed the "Belt & Road" Initiative-related business, and led the development of the industry based on the platform of consortiums. Up to now, 26 memorandums of cooperation have been signed internationally, and the cooperation network has covered 118 countries and regions; providing risk protection for the China-Laos Railway, Pakistan solar power projects, etc.; strengthening the agricultural catastrophe risk management functions and promoting the operating mechanism’s improvement of China Agricultural Reinsurance Pool; developing new products to expand the scope of agricultural disaster insurance business; participating in the drafting of "nuclear security law" and designing of nuclear insurance catastrophic responsibility reserve system, joining the "going global" alliance of nuclear power equipment, and promoting new products such as radioactive source environmental pollution liability insurance.
In terms of business synergy, the Company strengthened internal collaboration, expanded external collaboration, and fully tapped into new development space. In 2017, the Strategic Customer Department was established, and it carried out strategic cooperation with Inner Mongolia, Tibet, Chongqing and other local governments, New China Life Insurance, China Pacific Insurance Corporation, Taikang Insurance, China Railway Construction and other enterprises, so as to expand the China RE’s circle of friends; strengthened asset-liability collaboration, and strongly supported the development of savings-based life reinsurance businesses; innovated “reinsurance + brokerage,” “primary insurance + brokerage,” “insurance + asset management + brokerage,” and other collaborative models; information, technology and human resources sharing among China Re P&C and China Re Life; the cooperation between China Continent Insurance and New China Life Insurance achieved remarkable results.
In terms of innovation, first, innovation by data technology: China Re P&C continued to promote the development of catastrophe platforms and catastrophe models, published the first set of marine insurance risk curves for China’s insurance industry; China Re Life’s “data+” strategy is forming “data + pricing”, “data + product development”, “data + services”, “data + risk control” as well as other applications, and built a health management service platform to establish the first casualty insurance core database; second, highlight by product innovation: assisted local governments to build IDI risk management platform and cooperated with related institutions to complete environmental pollution insurance product pricing model; revenue contribution from innovation in products such as mid-tier medical care, critical illness and cancer prevention exceeds RMB 1,000 million; return insurance, million-medical health insurance and other innovative products achieves premium incomes of RMB 300 million; third, continuous innovation in business model: full implementation of a customer-oriented transformation, implementation of China Re P&C’s client manager system, and further improvement of customer service capabilities; China Continent Insurance promoted the strategy of “three innovations and three focuses”, actively built a customer-oriented integrated management system.
In the area of catastrophe system construction, the China Reinsurance Catastrophe Research Center was established, and a team of R&D talents in the field of catastrophes was actively recruited; the China Earthquake, Flood, and Agricultural Risk and Insurance Laboratories were jointly established with the China Meteorological Administration, China Earthquake Administration, and China Academy of Agricultural Sciences; the catastrophic business speeded up the development of catastrophic models and products, and released the "REview" and "REcommercial" of China Catastrophe Platform.
In terms of Digital China RE’s construction, great importance has been attached to the leading role of digital technology in the development of insurance business, realizing the implementation of overall reinsurance core business system project cluster. The core business system of China Continent Insurance is expected to go online in 2018. It conducted IT strategy consulting projects to adjust the IT organization structure and promote the establishment of China RE Group’s IT Center; promoted the establishment of a cross-industry blockchain alliance, and actively promoted the launch of new technologies.
In terms of basic management, corporate governance was standardized and efficient, and it was evaluated as a “quality company” in the 2017 corporate governance site assessment by the regulator, and the overall score was among the best; the capital management and asset-liability management were strengthened, and US $1,500 million of overseas senior bonds were successfully issued. The risk control system has been continuously improved, and risk monitoring and early prevention systems have been actively established; the construction of talents is regarded as the top priority in achieving strategic development. The reinsurance sector “Double Hundred Projects” and the primary security sector “Thousands of People Projects” have achieved remarkable results. High-end professional research personnels were introduced through postdoctoral workstations to improve talents’ quality continuously; actively fulfilled social responsibilities, increased inputs into poverty alleviation, and achieved remarkable results in “poverty-alleviation-by-insurance”.
For China RE Group, 2018 will be vital to herald the “One-Three-Five” Strategy on the past success and the Company will, as always, follow the guidance of “One-Three-Five” Strategy to make a breakthrough through product, model and mechanism innovations; to realize innovation, collaboration and progress leveraging comprehensive assessment mechanism, improved project management and the culture of cooperation; and to adhere to risk control, realize high-quality development and maximize value for the customers and shareholders.