Net Profit Improved Significantly and Key Business Segments Maintained Steady Growth
(Hong Kong, 30 March 2016) China Reinsurance (Group) Corporation (the “Company”, Stock Code: 1508.HK) announced its results for the 12 months ended 31 December 2015 (the “Reporting Period”) on 30 March.
In 2015, faced with complex market conditions, the Company maintained steady growth momentum. Its key business segments developed simultaneously, with improved operating performances and enhanced overall core competitiveness.
The Company achieved outstanding operation performance in five aspects in 2015. First of all, the gross written premiums (GWPs) of the Company improved steadily, with a GWPs of RMB80,434 million and a year-on-year ("y-o-y") growth of 9.1% in 2015. The GWPs from P&C reinsurance, life and health reinsurance and primary P&C insurance grew by 2.5%, 9.0% and 18.8% y-o-y respectively.
Secondly, the Company maintained industry position. In 2015, the GWPs from P&C reinsurance, life and health reinsurance and primary P&C insurance (before inter-segment eliminations) reached RMB31,924 million, RMB22,978 million and RMB26,685 million, respectively. Net profits from the three key business segments increased by over 40%, and the Company continued to maintain its leading market position.
Thirdly, the Company continued to improve profitability during the Reporting Period. The net profit reached RMB7,675 million, representing a y-o-y increase of 40.2% and the weighted average ROE reached a record high of 12.99%.
Fourthly, with the Company’s successful IPO in 2015, the Company’s capital was further strengthened. The total equity grew by 29.9% to RMB70,957 million compared to the beginning of the year.
Lastly, the Company achieved excellent results with a record high investment yields. Total investment assets reached RMB163,138 million, up by 17.5% from the beginning of the year. The total investment yield reached 8.48%, outperforming the industry average.
As the fourth biggest H share IPO in 2015 and the first listed reinsurance company at Hong Kong Stock Exchange, the Company achieved outstanding performance in innovation projects with enhanced management ability. With a stable outlook, the Company has been rated “A (Excellent)” by A.M. Best for six consecutive years, and “A+” by Standard & Poor’s for two consecutive years.
The Company actively catered to the changing demands of the industry and the clients while playing a key role in the development of new insurance products including the first prototype equipment insurance, inherent defect insurance and the 2nd generation of cancer insurance, as well as in technical expertise cooperation and reinsurance support. It also actively promoted catastrophe insurance pilot programmes, actively involved in the establishment of Earthquake Catastrophe Insurance Pool, explored the establishment of a tiered and decentralized mechanism for catastrophe risks and played a key role in product design and premium rates setting.
Also, the Company implemented New Core Reinsurance System (Tier 1), which was in line with international standards to refine business management and improve operational efficiency. It also completed trials for risk appetite systems, strengthened the integration of risk appetite with business budgeting and performance evaluation to further enhance the effectiveness of risk management. The Company successfully sponsored the issuance, in the overseas markets, of the first catastrophe bond linked to China earthquake risks, which marked a breakthrough in the PRC’s insurance industry in using alternative risk transfer instruments.
As the pioneer and leader of the PRC reinsurance industry, the Company strives to fulfill its commitment to the mission of leading China’s reinsurance industry development. In 2015, the Company facilitated industry standardization, and actively participated in the establishment of C-ROSS regulatory framework and the national Nuclear Safety and Control Act to constantly promote the standardization and development of industry and national risk management systems. It also provided insurance technical support and it maintained smooth operation of P&C Insurance Data Analysis Centre and updated the China P&C insurance exposure curves.
The Company was actively involved in the work of Office of Industry Experience Analysis established by China Association of Actuaries, and facilitated the construction of the third mortality table and provided support for product pricing and business evaluation; it supported the development of insurance for public interests and promoted the organic integration of technological innovation and social governance by accelerating the development of insurance products such as earthquake catastrophe, agricultural price index, environmental pollution, food safety, medical and critical illness insurance. Served as the management institution for the China Nuclear Insurance Pool (CNIP) and the China Agricultural Reinsurance Pool (CARP), and as the observer and the only reinsurer for the China Urban and Rural Residential Building Earthquakes Catastrophe Insurance Pool (CECIP), the Company assisted in policies addressing agriculture, rural areas and farmers.
China Property and Casualty Reinsurance Company Ltd. wholly commits to being the management institution of CARP as well as PRC Government policies addressing agriculture while effectively diversifying the risks for China agricultural catastrophe insurance.
The reinsurance industry is confronted with new development opportunity in 2016. With comprehensive promotion of constructing catastrophe insurance system and further support for agriculture insurance policy, the P&C reinsurance will embrace a new development. With the implementation of preferential tax policy for health insurance, and with the promotion of testing spots where pension is featured with the deferred type of personal tax, the policy-related operations of life and health insurance are expected to witness a new rising peak. The Company is fully integrating the development opportunity that is generated from relevant favorable policies.
In 2016, the Company will proactively adapt to changes in regulations and market landscape, actively adjust business risk strategies and promote upgrade in business structure and operational model while reinforcing competitive advantages in traditional business. We will also leverage innovation development to constantly explore new business areas and points of growth and to continuously achieve satisfactory returns for our shareholders.
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