CPIC Announces 2020 Interim Results

2020 SEP 07 (NewsRx) -- By a News Reporter-Staff News Editor at CDC & FDA Daily -- China Pacific Insurance (Group) Co., Ltd. (the “CPIC” or the “Group”; Stock code: 2601.HK, 601601.SH, CPIC.LSE) is pleased to announce the 2020 interim results of the Group.

This year, in the face of growing uncertainties in domestic and overseas economic environments, increasing risks and challenges, and normalisation of the pandemic prevention and control effort, we took matters into our own stride, maintained consistency in strategies, and continued to work hard and make progress.

We achieved a milestone in the history of our development. In the first half of 2020, we issued and listed global depositary receipts (GDRs) on the LSE, making us the first insurer simultaneously listed in Shanghai, Hong Kong and London. Our history over the past 30 years is compelling evidence of the importance of corporate governance as the bedrock of the development of a business enterprise. It is because of the effectiveness of our governance mechanisms that CPIC has been able to persist in high quality development, forestall systemic risks, and contribute to national initiatives, China’s real economy as well as the welfare of the Chinese people. And we will not stop there. The recent GDR issuance is another important step to enhance our corporate governance. It raised capital and, more importantly, it pooled talent. In particular, with the participation of high quality investors such as Swiss Re, we further optimised our ownership structure, which laid a sound foundation for continuous enhancement of corporate governance. Recently, with the election of new directors, the new board of directors has become more diversified, international and professional, which, in turn, will add impetus to the implementation of Transformation 2.0 and long-term development of the Company.

We delivered steady growth of business results. The board closely tracked the status of KPIs and led a broad-based effort to promote business development. In the first half of the year, we achieved further growth of comprehensive strength, while maintaining an overall healthy momentum in the core business segments.

The property and casualty insurance business reported rapid top-line growth, with continued enhancement of underwriting profitability.

Our life insurance operation met challenges head-on, stepped up on-line management of the agency force, and continued to push for its restructuring and upgrading focusing on the 3 core segments. During the reporting period, we achieved steady growth of the life insurance residual margin, with improvement in new business value (NBV) margin of the individual customer business.

As for asset management, we persisted in the optimisation of Strategic Asset Allocation (SAA) based on profiles of liabilities, while enhancing infrastructural management, improving mechanisms of outsourcing management and performance evaluation, and pushing forward the building of mid-end systems, with steady investment performance in the first half of 2020.

We pressed ahead with transformation.

Breakthroughs in innovations of systems and mechanisms. We vigorously promoted the establishment of a market-based, long-term incentive system, with recent on-the-ground progress in the core business segments of our life and property and casualty operations. The new structure combines a performance-based pay system, which focuses on value contribution, and a dynamic mechanism to “enlarge the pie” of compensation package. At the same time, given the long-term nature of the insurance business, there are also mechanisms of “lock-ups”, “deferred payment” and “claw-backs”. The new scheme covers the key positions of the headquarters of the life and property and casualty subsidiaries, and is more skewed towards the front-line of their branch offices, so as to strike a balance between providing incentives for growth and quality. We believe that the implementation of the new mechanisms will stimulate organisational vitality and improve talent retention, paving the way for sustainable development.

Further progress of digital empowerment. The data centre in Luojing of Shanghai was proceeding according to plan, with the completion of “CPIC Cloud” and “3 Data Centres in 2 Locations”. We continued to optimise the distributional framework of the core business systems, fostering seconds-level response capabilities. We also started comprehensive strategic co-operation with leading technology firms and renowned academies, put in place a mode of co-operation for the technology ecosystem, with steady progress in the capacity-building of data processing and AI mid-end output. We formulated a draft plan for the establishment of CPIC Fintech, in a bid to enhance our technology capabilities in an all-around way through marketisation of technology.

Reaping more benefits from increased intra-Group synergy. We launched a new management system for cross-sell business and intra-Group collaboration, integrated customer data, improved tools support and continued to promote the integrated customer-oriented operational model with our own characteristics. In the first half of 2020, business from intra-Group collaboration grew rapidly, underpinned by unified customer resources at Group level. Of this, cross-sell premiums, such as health and automobile insurance cross-sold by life insurance agents amounted to RMB9.95 billion, a growth of 20.9%; the number of customers with 2 insurance policies or above reached 27.29 million, up 6.3%; affiliates under the Group jointly developed more than 400 strategic accounts, which covered 84% of governments at provincial or municipal level.

Deepening of integrated risk management. We improved the standards, performance evaluation and personnel management systems of risk management, while launching pilot programmes of integrated risk management at grass-root levels. We pushed forward the integration of risk management and internal auditing which went downstream to sub-key branches, so as to enhance the risk management effectiveness at grass-root levels. We initiated the re-engineering of key processes at Group headquarters in a bid to streamline procedures, improve efficiency and strengthen service capabilities. We promoted the sharing of financial resources, deepened centralised management of fund payments and receipts, unified fund management so as to maximise benefits from centralisation.

We promoted the branding of “CPIC Service” in an all-around way. Since the outbreak of the pandemic, we stood side by side with our compatriots and fully participated in the combat against the pandemic. As an insurance company, we provided insurance cover to mitigate disruption to the economy and people’s welfare, while facilitating resumption of businesses and work. We provided comprehensive solutions in the form of funding and risk protection, which targeted the key supply chain and most vulnerable communities and enterprises, supporting firms in key sectors and SMEs in their effort to resume normal business. CPIC employees have been seen at the forefront of the fight against the pandemic, around the pavilions of the China International Import Expo, and at the scene of disaster relief in flood-stricken areas of Southern China, reinforcing a brand image of “Responsible, Smart and Caring” of “CPIC Service”.

We continued to deepen targeted poverty reduction mechanisms. As of the end of the first half of 2020, our poverty alleviation programmes covered 6.414 million registered impoverished people nationwide, and provided a total of RMB2.73 trillion in sum assured to poverty-stricken areas. The “Fang Pin Bao” programme was up and running in over 500 districts and counties of 25 provinces, providing cover against poverty with sum assured of RMB5.96 trillion, benefiting 90 million vulnerable people. We paired up with 2 rural townships and 3 rural villages and succeeded in lifting them out of poverty 9 months earlier than planned. The Rainbow On-line Charity Platform, stepped up product promotion via live streaming, and delivered nearly 60% increase in turnover dedicated to poverty alleviation. The mode of “shopping and donating to those in need” helps to pool resources and get more people on board in the poverty relief effort.

Thirty years is the prime time of one’s life. As a business enterprise, we will soon celebrate our 30th anniversary, and that means more foresight and even better plan to prepare us for long-term growth opportunities. Recently, we completed a new 3-Year Development Programme of the Group and the Development Programme of Health-related Business. The former outlines the vision and objectives of the Group between 2020 and 2022, and sets out the 3 development paths, namely, the improvement of product and service supply, the focus on long-term capacity-building and long-term incentive systems and the establishment of an integrated risk control system. The latter revisits and revamps the strategic plan for deployment along the health value chain, with a vision of becoming a leading domestic provider of comprehensive health-related services via capacity-building in products, services, operation and risk management. In the retirement business, we are half way through the implementation of original plans. The “CPIC Home” retirement communities are up and running in various locations across China. Given China’s economic development and demographic shift, the health and retirement sector is becoming increasingly important. The COVID-19 pandemic further raised people’s awareness of public health. Going forward, we will seize opportunities and vigorously deploy along the health and retirement value chain, in a bid to promote the model of “insurance products + health management” and “insurance products + elderly care”.

In the second half of the year, we will persist in high quality development, while striking a balance between stability of business performance and the acceleration of transformation. Keywords for this news article include: Asia, Business, China, China Pacific Insurance (Group) Co. Ltd., Epidemiology, Health and Medicine, Insurance Companies, Pandemic, Risk and Prevention, Technology.

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