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spk06: Thank you for standing by for FANWA's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent background noise. After the management's preferred remarks, there will be a question and answer session. Please follow the instructions given at that time if you would like to ask a question. For your information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within three hours after the conference is finished. Please visit Sanwa's IR website at ir.sanwaholdings.com under the Events and Webcast section. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Ms. Oasis Kew, FONWA's Investor Relations Manager. Please go ahead.
spk07: Good morning. Thank you. Good morning. Welcome to the third quarter 2020 Endings Conference Call. The Endings results were released earlier today and are available on our IR website as well as our news file. Before we continue, Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the United States Private Security Litigation Reform Act of 1995. The accuracy of those statements may be impacted by a number of business risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include but not limited to those outlined in our filing with the FCC, including our registration statement on Sum 20F. We do not undertake any obligation to update this forward-looking information as required under applicable law. Joining us today are our Chief Executive Officer, Mr. Chun-Ling Wang, Chief Financial Officer, Mr. Peng Guo, Mr. Wang will provide a review of financial and operating highlights in the third quarter of 2020. There will be a Q&A session after to prepare remarks. Now I will turn the call over to Mr. Wang.
spk04: Hello, everyone. Welcome to the third quarter of 2020. Thank you for joining us on today's conference call.
spk05: Here with me we have our Chief Financial Officer, Mr. Peng Ge. We will begin today's call with an overview of our third quarter 2020 financial and operational results and share with you an update on our recent strategic initiatives. Mr. Ge and I will take your questions after the report. 以2020年第三季度犯罚的业绩报告, Part 1, financial results in the third quarter of 2020. I would like to start with a brief review of our third quarter financial results. 2020年第三季度,范华硕险总保费规模达到23.8亿元,同比增长14.3%,超出人称险行业总保费增速。
spk04: In the third quarter of 2020,
spk05: Fanghua's life insurance business grew 15.5 year-on-year in gross written premiums to 2.4 billion yuan, outpacing the industry growth rate. Renewal premiums exceeded 1.8 billion yuan, while first-year premiums reached 582.7 million yuan, and annualized premiums equivalent reached 333.5 million yuan. New business growth was below our previous expectation, mainly due to the following factors.
spk04: Thirdly, the average income of insurance agents is lower than that of social workers for a long time, and the gap between social workers continues to increase, causing the industry to be difficult to support and the process rate of agents to be low. Fourthly, 2020 is the year of the end of the financial year. Therefore, small and medium-sized insurance companies One, there has been an adverse impact of the pandemic.
spk05: on customers' purchasing power and consumption sentiment. Second, our agency expansion plan was put on hold due to the pandemic, and as a result, could not bring incremental growth as previously expected. Third, in recent years, insurance agents' average income has dropped below social average level in China, and the gap is still widening. thus posing considerable difficulties on agent recruitment and resulting in low agent retention rate across the industry. Fourth, as 2020 is the last year of the three-year financial rectification initiative in China, small and medium-sized insurance companies lack incentives on product innovation. In contrast, Major insurance companies have taken more aggressive product strategies, overshadowing the competitiveness of the products offered by small and medium-sized insurance companies. Part 2, the strategy of developing a professional sales force, digital capability and open platform. Next, I would like to discuss our strategy of developing a professional Salesforce digital capability and open platform. 我们研判职业化销售组织才是专业中介的核心竞争力和正确发展方向,而职业化销售组织需要数据化支持。 We believe that the key for any professional insurance intermediary to remain competitive and stay on the right course lies in the professional level of its sales force. While digital technology provides essential support to the success in building a professional sales organization, by optimizing the use of private customer data. Meanwhile, Fanghua intends to open our technology, product contracts, mid-office and back-office service capability to the industry. By sharing the leading technology and product offerings with the market, Fanghua hopes to assist all market participants to improve their efficiency and lower cost, thus promoting the common development of the company and the industry. Therefore, Fanhua is implementing the strategy of developing a professional sales force, digital capability, and open platform with key initiatives as follows.
spk04: 一,建立職業化事業部,實施雲童計畫。 One,
spk05: Establish a business division for professionalization for the purpose of implementing Renton Plan. Key components of the plan goes as follows. 在现有队伍的基础上,2021年,范华现有的25个省级平台公司在省公司本部建立直属事业部,吸引行业高端代理人加入。 In 2021, on top of our existing sales force, 25 of our existing provincial level platform companies will each establish a direct business unit at the provincial headquarter, which will be dedicated to forming a professionalized insurance advisor team by attracting elite sales agents. i.e., the Ringtone Financial Advisor Team. Fanghua intends to introduce top insurance managerial talents from insurance companies to help establish more than 10 new branches in economically developed cities for developing and operating rental financial advisor team. 第三,職業化雲童理財社的畫像為90後為主,全職高素質高產能 年收入超過十萬的保險顧問。 2021年計畫招募五千名職業化金童理財師。 Key profiles of professional rental financial advisors are full-time insurance advisors, mainly born post-1990s, of high caliber and high productivity, with current annual income not less than 100,000 The company plans to recruit 5,000 professional wind tunnel financial advisors in 2021.
spk04: and consistency, to facilitate customer self-supply transactions, to realize online transactions and resupply through e-commerce marketing centers, to provide services to customers who need to submit offline services, and to deliver offline professional insurance consultants. At the same time, digital platforms will create digital operating tools, open for insurance consultants to use,
spk05: to establish social technology company for implementing the digital strategy. We will integrate our data inventory and operation platforms to connect isolated data islands inside of the group. We will carry out intelligent digital operation to improve customer satisfaction and loyalty and enable customer self-service transaction. We also established online marketing center and call center to facilitate online transactions and upper selling. For customers requiring offline services, they will be routed to offline insurance advisors. In addition, Digital operation tools for insurance advisors will be provided to insurance advisors to enable them to provide better customer service through provide traffic operations.
spk04: Three.
spk05: develop cloud service business division for implementing the Phonics plan and advancing platform OpenNet. Starting with capital incubation, the open platform will export technology, product contracts, mid-office and back-office operation capability, and after-sales service capability to the market. In 2021, the company plans to introduce more than 50 platform partners, including insurance technology companies, professional and ancillary insurance agencies, insurance key opinion leaders, and third-party wealth management companies. 4. As our existing organization will continue to serve as our solid business base, the company also plans to upgrade the professional skills of our existing 400,000 agents and improve their productivity through digital empowerment and enhanced specialized operations. 5.
spk04: To promote the youth and professionalization of the business class, the company has recently transferred the general manager of the Henan branch of the company to be the president of the insurance sales group, and the general manager of the Hebei branch of the company to be the vice president of the insurance sales group, which has led a large insurance company to be the president of the Yunfu Business Department.
spk05: 5. Last but not least, develop a younger and specialized management team. We are happy to welcome a few new members joining us into our management team. We recently promoted the general manager of our Henan branch. to be the president of our wholly-owned insurance sales operation, Fanghua Insurance Sales Group, and the general manager of Herbert Branch to be the vice president of Fanghua Insurance Sales Group. A former sales manager from a major insurance group in charge of its intermediary business has joined Fanghua to serve as the president of our cloud service business division. In addition, we have retained a formal head the online and telemarketing business unit of a foreign JV and insurance company to build our digital marketing center in Wuhan.
spk04: Part 3, expectations. While the immediate future remains challenging for the industry,
spk05: We anticipate year-on-year growth in the first quarter of next year and significant incremental growth contributed by our new strategy in the second half of 2021. We are confident in our ability to retain companies' position as a leader in the professional insurance intermediary sector over the long run.
spk04: Thank you everyone. Next, we will return to everyone's questions.
spk05: This concludes my presentation. Now the floor will open for your questions. Hi, Rishi.
spk07: We are ready for the questions. Thank you.
spk06: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. And if you wish to ask questions, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. The first question we have is from the line of Xu Yuan from CICP. Your line is now open.
spk02: Okay. Thank you for giving me the opportunity. I am a member of the central company. I have two questions. The first question is about opening the door. I would like to ask how our company is currently preparing to open the door. The second question is about the cohesion of the industry. We see that the insurance product sales of the industry are relatively difficult. Then,
spk07: There are two questions from Xiuyan. The first question is regarding the year opening sales strategy for Fanghua. How are we prepared for that year opening sales? And the second question is actually regarding a common issue that's faced by the overall industry. It seems that protection-oriented products have encountered huge difficulties in the south. When do you expect the recovery will happen?
spk04: Thank you. First of all, I would like to thank the members. Let's go back to the first question, the preparation of the opening of the door. For the year opening sales in 2021, it's actually the first
spk07: time that we attach special attention to year opening sales in the past decades. So we want to make sure that we are fully prepared for this and we also have a little bit high expectation for the year opening results. So we set up a special team, a special task force in charge of the year opening sales preparation. We believe that the year opening sales will produce very good results in 2021 and will also form a good starting point for our world in 2021. We believe that the year opening sales will help stabilize the team better and help enhance their competence. as well as to further enhance our leading position in the industry.
spk04: 开门红实现好的效果也对我们2021年新的战略实施给出了好的环境、时间和空间。 The good results from year opening sales will also form a good foundation for our execution of the new strategies in 2021. The second question is that the market is not doing well in terms of the sales of insurance products. I don't think that the sales of insurance products is bad. It's because this year, the mainstream products are actively promoting Zongsheng Beast. Zongsheng Beast is a product that the market can easily understand.
spk07: And the second question is regarding to the difficulty in the sales of protection-oriented products. Actually, in our view, it's not that this type of product are difficult to sell, but on the contrary, it's because insurance companies have put more emphasis on the sales of whole life insurance products because this type of products are easy to understand and also have higher ticket size. So usually the sales teams and sales agents like this type of products. 當然,這個馬上這個重擊新規將在明年開始實施,所以在
spk04: But having said that, with the issuance of the new definition on critical illness, which is expected to take effect in 2021,
spk07: So before the new regulation taking effect in January, we expect that the critical illness products may also have an opportunity to experience an explosive growth. 从目前颁布的重极新闻来看,未来新的产品,这个性价比应该是比现在的产品略有不足或者差一点。 Based on the new definition on critical illness, it seems that new products designed based on the new regulation seems less favorable than the old products.
spk04: 主要體現在這個保障範圍和重疾的定義上縮小了範圍。 Which is reflected in narrower insurance coverage. 謝謝。 Thank you.
spk06: Thank you. Once again, ladies and gentlemen, if you wish to ask questions, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Once again, for questions, it is star 1. The next question we have is from the line of Alan Frank from Morgan Stanley. Your line is now open.
spk01: Hi, Leader. Hello, Leader. I'm Alan from Morgan Stanley. I have two questions. The first one is, can you briefly introduce the revenue model of the Yunfu Project, that is, the model of receiving fees from these partners? There are two questions from Alan. The first question is regarding to the revenue model with regard to our cloud service plan.
spk07: we're going to establish more closer cooperation with some third parties under this cloud service plan. And the second question is regarding to our dividend guidance for 2021.
spk04: This strategy is very important. In the past two years, we have been trying the work of the cloud service plan. This year, we have used a small attempt. This year, our cloud service is over 20 million yuan. Next, we think that on this basis, we should increase the cloud service
spk07: I would like to answer the first question regarding to cloud service plan. We have attached great importance to this plan, actually. In the past few years, we have made a lot of preparation. And actually, we have done some pilot project this year, which produced 20 million AP as a result. So we expect to further expand this plan to wider market players this year, next year. 現在雲湖的新單毛利率超過25%,我們希望在這個基礎上進行雲湖工作的開展。 new business growth margin is about 25%. So on top of this, maintaining this growth margin, we're going to ask you on our cloud service plan.
spk04: 他是多年的中介工作经验 对中介的产品服务非常熟悉 而且他已经跟各类的保险中介 科技类的保险科技平台以及一些大V 他们有四五百家的合作签约经验
spk07: Recently, a senior manager who used to be in charge of the intermediary insurance business in Tyco Life, , who will be in charge of our cloud service operations. He has huge experience, extensive experience in insurance intermediary sector and has a good understanding of the products and services in the insurance intermediary sectors as well. And he has also had former experience in signing contracts with at least 400 to 500 small and medium-sized insurance intermediaries and technology platforms, as well as key opinion leaders. 我们将在这500家左右的甚至更多的这类的企业公司来进行这个市场分层分类。
spk04: Among these 500 potential business partners, we are going to put them into several categories.
spk07: and among which for the most potential business partner, we're going to establish cooperation through equity investment. For equity investment, I think the arrangement will be we may invest minority interest at the beginning, and then if they can produce very good results, we will further increase our shareholdings. 通過資本的方法切入之後,建立這種相互堅定的信任關係,然後開放我們的這個科技和產品合約,
spk04: So through the bond of equity investment, we believe that it will be easier for us to establish a mutual trust relationship.
spk07: And then we will open our resources or shared resources with their business partners, including our technology capability, our product offerings, as well as our offline service capability, in order to help them to improve their efficiency and reduce cost, as well as achieve profitability at an earlier time. 也就是讓這些公司附用我們的科技平台。 So they will be able to have access to our technology platform as well as unified product contracts. So the revenue model in terms of the revenue structure as well as margin structure may vary case by case. We will report to the markets as necessary.
spk04: For our guidance for dividends in 2021, we would like to continue the dividend policies, but of course we need to submit our proposal to the board for their approval. Thank you.
spk06: Thank you. We don't have any further questions at this time. Once again, ladies and gentlemen, you may press star one for questions. And we don't have any further questions at this time. I'll now pass the conference back to Ms. Arisa Skew for closing remarks.
spk07: Thank you, Rishi. Thank you for joining today's conference call. If you have any further questions, please feel free to contact us. Thank you.
spk04: Okay.
spk06: Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may now all disconnect.
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