On 31 August, China Re Group held its 2021 interim results press conference, at which the Group's management team gave a detailed presentation on the Company's overall results and strategy implementation for the first half of 2021. The media conference was held in the form of "conference call + live webcast", which helped draw attention from the capital market and enhanced investor’s understanding of the Company through comprehensive interactive exchange with analysts and investors.
Rapid growth of operating profit
Benefiting from optimisation in international business structure and the year-on-year increase of the underwriting profits of the international business as a result of higher rates, and the year-on-year increase in investment income due to timely realisation of gains by seizing the opportunities arising from equity market fluctuations, net profit attributable to equity shareholders of the parent company for the first half of 2021 amounted to RMB4,011 million, representing a year-on-year increase of 62.6%. Annualised weighted average return on equity was 8.50%, representing a year-on-year increase of 2.87 percentage points.
Further optimisation of business structure
China Re Group was included into Fortune Global 500 in 2021, ranking 4th among global reinsurance companies and maintaining its leadership in reinsurance business. Gross written premiums for the first half of the year totaled RMB83,277 million. The Company’s business structure has been further optimised as, on a year-on-year basis, proportion of income from domestic facultative business of the property and casualty reinsurance sector increased by 2.1 percentage points, and that from overseas business of the property and casualty reinsurance sector increased by 5.4 percentage points, while that from domestic protection-type reinsurance of the life and health reinsurance sector rose 10.8 percentage points and that from domestic financial reinsurance of the life and health reinsurance sector declined by 4.9 percentage points.
Equity investment outperforming the market
Faced with the complicated economic and financial situation in a low interest rate environment, the Group seized the opportunities arising from fluctuations in the equity market. During the reporting period, equity investment greatly outperformed the market, realising an annualised total investment yield of 6.55%, a year-on-year increase of 1.07 percentage points.
Maintaining prudent risk management
China Re Group continued to strengthen risk management and was once again granted Financial Strength Rating of A in the S&P Global Ratings and Best’s Financial Strength Rating of A (Excellent), with all major business entities maintaining an aggregated solvency adequacy ratio of more than 200%.
Accelerated strategy implementation
In the first half of 2021, China Re Group took advantage of the opportunities from national initiatives to constantly cultivate new business growth.
Supporting the construction of national governance system
The Group was dedicated in catastrophe pilot projects in 16 provinces, cities and regions across the country, and acted as the chief or sole reinsurer in more than 80% of the projects. Also, the Group completed the development of typhoon catastrophe model 2.0 with expert certification, filling the gap in China and reaching the advanced level internationally. Besides, the Group promoted the construction of IDI platforms in Beijing, Shanghai, Hainan, Guangdong and other places and the platform generated a cumulative premiums of RMB5,434 million with a total protected area of about 130 million square meters. Premiums of IDI was RMB503 million in the first half of 2021 with a year-on-year increase of 72.9%.
Backing up Belt and Road construction
The Group promoted the establishment of China Belt and Road Reinsurance Pool and served as the chairman and managing agency, which underwrote an aggregate of 12 projects, providing protection to overseas assets of approximately RMB10.1 billion in total. Chaucer, one of the Group’s overseas business arms, launched a Belt and Road Consortium at Lloyd’s, which underwrites political violence risks. The Consortium was led and managed by Chaucer. A total of 32 Belt and Road cooperation memorandums have been signed so far. The Group maintains business cooperation in 136 countries and regions, providing about RMB350 billions of reinsurance coverage for more than 600 projects.
Underpinning Healthy China initiative
China Re Group, as the largest domestic health reinsurer in terms of market share, created a new model integrating commercial insurance and social security which features “Products + Specific Drugs" and “Specific Drugs + Social Security”. The Group provided reinsurance support for local inclusive health insurance plans, covering 41 million people in 85 cities, playing a leading role in the market. At the same time, the Group participated in the first pilot programs of the long-term care insurance system in China, developed reinsurance products covering long-term care, critical illness and others. The Group was the first reinsurer to launch products for Greater Bay Area cross-border medical insurance and customised critical illness insurance.
Taking forward green development strategy
The Group provided reinsurance support for environmental pollution liability insurance schemes in many cities. In addition, the Group provided nuclear insurance for all operating domestic nuclear power units and nuclear-related assets worth nearly RMB1 trillion and over 10,000 frontline workers in nuclear related enterprises. The Group also took the initiative to develop agrometeorological index insurance product research and development platform by itself, providing the industry with 26 innovative product solutions for meteorological indexes and providing risk coverage of more than RMB400 million.
China Re Group will abide by the policies of “profitable development, market benchmarks, risk compliance and digital transformation”, and adhere to the business principle of “stabilizing growth, optimizing structure, controlling risk and improving profitability” , make progress while ensuring stability and enhance value, so as to develop itself into a world-class comprehensive reinsurance group with sustainable development capabilities and core competitiveness, creating even higher value for its customers and shareholders.