New China Life Insurance Company Ltd.

Welcome to 10-Hour Company's 2024 Interim Results Announcement. I'm VP of the company Gongxin Feng. I'm the host of the meeting. First, I'd like to introduce the management of the team. They are Chairman Mr. Yang Yucheng, President Mr. Zhang Hong, Vice President Mr. Qin Hongbo, Vice President Mr. Wang Lianwen. In addition, we are honored to have invited the company's independent directors, Ma Yaotian, to participate in the meeting online. The conference is divided into two parts. Presentation and Q&A session will provide translation. For investors, analysts, and friends from the media, if you want to ask questions during the Q&A session, please press star key and the number one on the list. Now, let's start the presentation. Please welcome Mr. Yang Yicheng to introduce the company's 2024 insurance results. Dear investors, analysts, friends from the media, welcome to attend our company's 2024 interim results announcement. Thank you for your long support of our company. First, I'd like to introduce the reform and development performance of the company in the first half. In the first half, the company will adhere to high-quality property building to lead high-quality development, build a learning and service-oriented organization, and carry out professional and market-oriented reform, and achieve initial results in high-quality development, focus on main business, and achieve steady progress in BV, revenues, and net profit. Our group. Unbill is up by 57.7%. Revenue is up by 13.6%. Net profit is up by 11.1%. Strengthen asset management and enhance investment capabilities. Investment assets exceeded 1.4 trillion yuan. Annualized total investment yield was 4.8%. Annual comprehensive investment yield was 6.5%. The company managed interest assets over 550 billion yuan from third-party businesses. Open a new area in team building. Launch new generation team building project. Build a multi-level customer service circle and a heartfelt service service. Force deeply technology empowerment and practice the concept of digital finance. Integrated business development strategies. Show business model innovation through digital transformation. Consolidate the bottom line of preventing risk and enhance the ability to resist especially in the service empowerment sector. As a state controlled financial institution, we actively serve national development strategy with focus on five major areas. To fulfill our state-owned enterprise responsibilities, by the end of the period, the company supported inclusive finance, participated in 46 policies on anti-medical insurance, covering over 46 million people, supported real economy, invested $170 billion. to promote coordinated regional development up by 9.8%. Supporting rural revitalization assistance funds reached 10.4%. Ltd. Ltd. The company entered a new era of sales team building, and the same plan was officially launched, which was committed to building a highly qualified financial talent team, a professional and high-quality career development platform, and a long-term and efficient sales management team for us to promote the implementation of the new generation. Provides comprehensive support for development of high-performance teams. Upgrades the company's training system. Promotes consultant-style recruitment training. Fair class certification training. Excellent new employees and high-performance training. Strengthen institutional guidance, refine policy mechanism, achieve upgrading income distribution system, career development path, and take institutional management to a new level. Build customer-centered, heartfelt service system. The company has a customer-centric concept, upgrades the brand feature of fast claim and fast claim settlement excellent service. Claim settlement is fast and of good quality. A total of 2.36 million claims were handled. With a... ...spend... Our feature service is excellent. We continue to build 200 high-level systems. We maintain a main service for customers and their families. We promote the Xinhua home-based health service system to help the inconvenienced elderly with daily care. The company is also promoting Xinhua Rui middle and high-end customer service system and Xinhua Yuan health and elderly care service system, accelerating the construction of the service ecosystem. Thirdly, services are quite smart. Data and technology empower customer service. Our official WeChat account serves 13.21 million users and receives 76.16 million visits. Now is the first part. Let's move to the second part, the operation of our company. First, MBV maintained fast growth. The company firmly took the road of even-worldly high-quality development, and the business has been steadily advancing. We achieved new business value of 3.9 billion yuan, up by 57.7%. The MBV margin based on first-year premium was 18.8%, up by 12 percentage points. In addition, investment performance significantly improved. The company proactively and accurately grasped the opportunities in the stock and interest rate markets, focused on value investment and long-term investment, and achieved good investment returns. The company's investment assets exceeded 1.4 trillion yuan, up by 7%. The total investment income was 31.6 billion yuan, up by 43.3%. Comprehensive investment income was 42.6 billion yuan, up by 51.8%. Profitability rate... Net profit was 11.1 billion yuan, up by 11.1%. ROE was 11.2%, up by 2.53%. The company intends to pay an interim cash dividend of 0.54 yuan per share, totaling 1.6%. The company thoroughly implemented the major decisions and development of the regular premium accounting for 83.3% FYP of long-term insurance. Revenue premium with payment period of 10 years accounted for 11%, up by 5.8 percentage points. The renewal premium accounted for 78.6%, up by 12.3 percentage points. The premium income remains stable. Our premium income remained stable. Regular premiums with payment periods of 10 years or more grew steadily. Renewal premiums remained a solid contributor. The company realized GWP of 98.8 billion. Regular premiums with payment periods of 10 years or more reached 2.04 billion yuan. Renewal premiums reached 77.7 billion yuan, up by 8.6%. For the individual channel, the core business role. Individual channel focuses on web enhancement and business structures optimization and accelerated long-term and diversified transformation of products. FYP of long-term insurance was 0.5 billion, up by 1.8%. FYRP of long-term insurance was 8.3 billion, up by 4.1%. Accounting for 97.3% of YRP, up by 2.1%, percentage points. The individual channel allocated resources to promote individual insurance. First, focus on value. Maintain growth of regular premium business. Figures promote long-term business transformation. Practice the concept of high-quality development. Accelerate the high-performing team building. Introduce new basic law. Focus on recruitment. Integrate the company's superior resources. Launched a team generation plan, strength and basic management, promote steady growth of core business. In terms of team building, promote a high-performing oriented transformation, focus on effective recruitment, and emphasize quality and training. The company has a total of 139,000 agents with an average high-performing rate of 12.5%, up by 2.3% in points. average monthly productivity is 10,400 yuan, up by 28.3%. The Bank of China layout is optimized. FYRP of long-term insurance business is 7.1 billion yuan, accounting for 71.7%, up by 34.3% in points. Renewal premium was accounting for 46.4% of the China premium, up by 33.5% in Japan. Venture research channel, improve professionalism of the team, optimize the customer management tool, optimize channel layout, rationally distribute call channel, key channel, and potential channels, and continuously improve institution layout, strengthen customer management. Focus on customer demand, explore customer management model, and meet diversity of customer needs. Improve product layout, continue to enrich product supply. Deepen the long-term transformation of the business. Business quality has been enhanced. The company strengthened the business quality management. The quality improved significantly. The balanced investment portfolio, the company's investment asset takes fixation. The company follows the philosophy of prudent long-term and value-oriented investment regarding strategic assets. It centers on fixed income assets with long duration and a stable cash flow to meet the requirements of the asset liability matching, supplemented by balanced asset allocation. In technical asset allocation, it has dynamic adjusted structure and achieves certain results. The non-standard investment portfolio is controlling risk. We continue to reduce the size of non-standard investment. Non-standard investment assets reach 128.5 billion yuan, a decrease of 28.4 billion yuan. accounting for 8.9% of the total investment assets, down by 2.8 percentage points. Under strict credit and combined requirements, most of the non-standard investment underlying assets are loans and have good credit enhancement measures. The overall risk is controllable. We have adequate solvency margin. The company's core solvency margin ratio was 122%, and the comprehensive solvency margin ratio was 225%. Affected by discount rates, the growth of insurance and investment business, the source margin ratio has decreased to a certain extent, but still much higher than the regulatory requirements, laying solid foundation for the sound development of the company. The company's embedded value was growing. Our EV was approximately 268.4 billion yuan, up by 7.1%. Value in first business increased 3.6% to 90 billion yuan. Adjusted net worth rose 9% to 177 billion yuan. Our stable insurance business operators contributed 16.6 billion yuan, which helped the EV grow by 6.6%. That's the embedded value change analysis. That's the second part. Grow Value with Coordinated Development. Next, I will introduce our future outlook and the key measures for the second half. In the second half, the company will embrace tradition and innovation and continue to release development momentum, first focus on key BRICS rules, deepen customer-centered, professional, and market-oriented transformation, stick to institutional management, strengthen systematic and refined management, accelerate execution, strengthen team building and service ecosystem diversification. Comprehensively enhance the company's competitiveness. Secondly, enhance product competitiveness. Design and develop products with customer interest at the center. Strengthen product innovation. Launch multiple new products. Improve product support capabilities of premium products and play the leading role of flagship products. Continue to build a learning-oriented service and mobile organization. Optimize training system, enrich learning resources, continue to improve the professionalism of the team. Build a professional army, comprehensive, upgraded marketing product. Build an efficient, collaborative, and effectively empowered customer service support system. High-profile sub-branches, middle and back office, sub-front office, staff service agents, and agents service customers. The company will be guided by the spirit of the preliminary session of the 20th Central Committee of CPC. Take the role of financial development. Strive to build a first-class, comprehensive, modern insurance company. Thank you. That's the end of the presentation. Thank you, Mr. Chairman. The presentation is simple but has some key message. Listen to the Q&A session. Due to time limit, each person may ask two questions. Let us know your name and company first. Thank you. Marketing team reform. In this June, we have heard some good results for the marketing reform. We have heard the regulator has to adjust the pricing rate. We would like your mirrors for the product. Thank you for your question. Thank you for your attention to our marketing system reform. The marketing system is part of the company's strategy. We have three levels. First, it's based on a simple plan. We try to build a professional elite team which operates the mechanism and lead the team building, operate the service system, operate the training system, Upgrade the resource system. Upgrade the management platform. Which all help the team grow. The second level is to come to institutional management, which is based on this club. On the first hand, you basically and pay I'm a philosopher for team development. We focus on recruitment and training. We place more attention on long-term development rather than short-term development. We just mentioned in the new price and weight environment, what's our product strategy. We all know that the whole market is experiencing product shifting. We have built a professional team which is led by our chairman to promote this product shift. It has forwarded every aspect of this work steadily. Before the end of this month, we will first shift the traditional products. Before the end of next month, we will shift to other products such as participation insurance and universal insurance. In this process, we will adapt the whole team and adapt the customers. We just mentioned the pricing rate adjustment. And regarding the effect of the regulators, Both regulators and the whole industry all embrace high-quality development, which is also for the sake of the supply-side reform. All the regulatory measures will help reduce the cost of our liability side. and will narrow our interest risk. In the future, we have good confidence for the industry's high-quality development. The company has a diversified strategy for product development. Universal participation insurance and saving products all will help serve the customer's demand. We have upgraded our system that features product plus service. After our chairman came to our company, we promote high-end, middle-to-high-end and other categories. With all those measures in place, we believe NCI will be a choice for customers. And in this background, the marketing channel will be a role model for the steady progress and development. We try to be the leader compared with other peers. We hope to satisfy the investors. Thank you. Thank you for giving me this opportunity. Congratulations on the performance for the first interim. Other indicators have grown rapidly. We see the share price grow today, the biggest rise for this year, which also the confidence for our results.

We see that the performance of the companies and we can see the profit growth in the first quarter and second quarter vary. And there's a great difference between quarters. And I want to ask that after employing the new standards, the market is studying the new standards. And we see that in the first quarter, the profit decreased. But in the second quarter, the profit doubled. And I want to know how can we... Review and understand the results and the company's performance. And the second, we can see that the asset, that asset of the company has decreased and decreased compared with the end of first quarter, which is different from the peer companies. I want the management team to elaborate on that. How can... Thank you for your question. Mr. Gong will answer this question. For the net profit in the first half and the second quarter, we have increased a lot. There is a difference between the first quarter and the first half of the year. And for this question, we think we should have a comprehensive analysis First is the performance, the investment, and the insurance business, these two sides. In the first half, the insurance business of the company has grown fast, and we can see in the first half in this year, there is a huge change compared with the previous years because the product and the margin ratio of the company has increased significantly. The residual margin released for this year has increased, which has contributed to the growth of the net profit. Also, the pressure of the first day losses has decreased. In the second quarter, we have grown very fast. From the leverage side, we can see the CSM has a stable release and the new business has contributed also and relatively the investment side has a larger volatile performance and we can see the total investment yield of the company has greatly improved and in the first half we have grasped market opportunities and allocated assets and just now the has talked about that the total investment yield of the company has relatively high performance and there is a great improvement compared with the first quarter and for the volatility of the net profit that shows that the company has in terms of the asset allocation and has because the net free The interest rate had decreased. Therefore, the net asset can show we cannot fully cancel the inference of the decreasing rate. A lot of the asset was calculated as amortized assets. A smaller proportion was put in the FVOCI debt asset, so the net investment asset with FVOCI will have A higher proportion, if the FBOC asset has a higher proportion, so the net asset of the company will have a more flat performance. So we will strengthen the asset liability management. And the second influence is that there is a decrease of the curve. And in the first half, the decrease range has doubled compared with the first half.

Thank you very much.