On 29 March 2022, China Re Group held the 2021 Annual Results Press Conference. Yuan Linjiang, Chairman of China Re Group, led the management team to give a detailed briefing on the Group’s overall performance and strategic implementation results in 2021. The presentation was held in the form of conference call & live video, and involved in-depth communication and interaction with analysts, investors, and domestic and foreign media, which has further strengthened the capital market’s attention and understanding of the company.
The year 2021 marks the beginning of China's 14th Five-Year Plan. Faced with complex market environment both at home and abroad, China Re Group formulated the “One-Four-Five” strategy, which refers to focusing on our reinsurance business (“one core”), strengthening product innovation, platform-driven, technology empowerment and global interconnection (“four pivots”), and achieving improvements in value, data, ecosystem, talent and culture (“five enhancements”). Under the guidance of the “One-Four-Five” strategy, China Re Group adhered to the general tone of “making progress while ensuring stability”, and insisted on the operational policy of “stabilising growth, adjusting structure, controlling risk, and increasing profitability”, achieving a good opening of high-quality development for the 14th Five-Year Plan.
Steady improvement in operation results, further consolidation of market position
In 2021, China Re Group’s premium volume grew steadily. The Group’s gross written premiums amounted to RMB162,732 million; net profit attributable to shareholders of the parent company amounted to RMB6,363 million, representing a year-on-year increase of 11.4%; weighted average return on equity reached 6.84%; and dividend per share was RMB0.045, representing a year-on-year increase of 9.8%. The recent dividend yield ratio reached 7.76%. In terms of total reinsurance premiums and net premiums, China Re Group’s global reinsurance ranking rose from 7th to 6th, and was recognised as one of the “Top 500 Global Companies” by Fortune magazine and appeared on the “Brand Finance Global 500”. China Re also ranked at the top in the Annual Regulatory Assessment on Corporate Governance conducted by the China Banking and Insurance Regulatory Commission and ranked first by market share in the domestic reinsurance market, reinforcing its position as the main force in the industry.
Continued optimisation in business structure, risk management remained stable
In 2021, China Re Group continued to optimize its business structure. The P&C reinsurance overseas business accounted for 32.4%, representing a year-on-year increase of 1.5 percentage points; P&C reinsurance domestic emerging business accounted for 7.8%, representing a year-on-year increase of 0.9 percentage points; domestic protection-type business in life and health reinsurance business accounted for 37.6%, representing a year-on-year increase of 6.5 percentage points; and the non-motor business in primary P&C insurance business accounted for 48.0%, representing a year-on-year increase of 4.5 percentage points. China Re Group’s risk management remained stable. In 2021, the aggregated solvency adequacy ratios for all insurance entities of the Group stayed above 200%, and the Group was awarded a Long-term Insurer Financial Strength Rating of “A” by S&P Global Ratings for the fifth consecutive year and maintained its Financial Strength Rating of “A (Excellent)” by A.M. Best for the 12th year running.
Actively serving national strategies as innovation drove business development
In 2021, China Re Group’s P&C net amount at risk in service of relevant national key strategies totalled nearly RMB2 billion, representing a year-on-year increase of 28%; market share of our health protection-type reinsurance business in service of the Healthy China strategy exceeded 40%, and nearly 200 new innovative products were added. In terms of expanding the supply of catastrophe risk protection, the Group actively responded to major disasters, and gave full play to the role of reinsurance catastrophe risk protection in natural disasters such as the Henan floods. In addition, China Re innovated its catastrophe risk management methods and successfully issued the first catastrophe bond in Hong Kong. In serving the Healthy China strategy, as a major reinsurer in China, China Re supported more than 50 “Hui Min Bao” projects, covering roughly 50% of the insured population nationwide. In pursuit of the “dual-carbon” goals, the Group contributed to the smooth operation of nuclear operations, covering nearly RMB1 trillion in assets and 24,000 front-line workers of all operating nuclear power units in China, and helped nuclear power companies reduce carbon emissions by 302 million tons. In serving the construction of national governance systems, the Group innovated the “Shanghai model” of inherent defects insurance (IDI) for construction quality and promoted it nationwide. Its IDI platforms have cumulatively achieved premiums of nearly RMB500 billion, covering a total of nearly 140 million square meters. In serving the Belt and Road construction, the China Belt and Road Reinsurance Pool provided risk protection for RMB16.1 billion in assets of 19 overseas interest projects in its first year of operation.
Publishing the “Digital China Re 2.0” Strategy to accelerate digital transformation
In 2021, China Re Group published the “Digital China Re 2.0 Strategy”. Adhering to the development logic of “gather resources, build platforms, and create ecosystems”, the strategy aims to build a new digital transformation landscape featuring “internal intelligence, direct reinsurance, and platform ecosystem”. In terms of the more traditional framework, the Group’s goal is to make leaps in basic capabilities and international capabilities, while on the innovation side, it will continue to promote the construction of external innovation platforms and ecosystem-based operations, and in terms of organizational transformation, China Re will upgrade its digital organization capabilities. In 2021, China Re Group’s technology empowerment became increasingly prominent. As the first insurance technology company in China to focus on catastrophe risk management, the Group’s subsidiary China Re Catastrophe Risk Management Co., Ltd. successfully developed the China Earthquake Catastrophe Model 3.5, which is the only scientific research project in China’s insurance industry featured in the 13th Five-Year Plan Scientific and Technological Achievement Exhibition. It also released the commercial version of the China Typhoon Catastrophe Model 2.0, filling a void in the domestic market. In 2021, China Re Catastrophe Risk Management’s revenue exceeded RMB23 million, reaching profitability in its first year.
Continuous advancement of international footprint and continuous improvement in management capabilities
In 2021, China Re Group made great progress in its globalization efforts. First, it continued to advance international footprint, expanding its overseas units to 11 countries and regions, becoming the Chinese insurance company with the widest overseas presence. In 2021, the Group’s premium income from overseas business accounted for 18.9%, and overseas investment assets accounted for 25.9%. Second, the acquisition of Chaucer was a huge success. In the three years since the acquisition, China Re has achieved stability in terms of business, operations and teams, and Chaucer has consistently outperformed Lloyd’s, with a return on economic capital of 14.8%. Third, China Re continued to enhance its management capabilities. It improved the functions of the overseas development and management committee, strengthened business planning and research, and realized underwriting profits in all of its three major overseas business platforms of P&C reinsurance. Fourth, it comprehensively deepened international synergies. Utilizing the Belt and Road initiative as a bridge and leveraging Chaucer’s technological advantages as a leader in the fields of political risk and nuclear risk, China Re strengthened coordinated development at home and abroad.
Improved risk management capabilities, laying a solid foundation for the headquarters
China Re Group continued to improve risk management system and strengthened overall management and control in key areas such as major risks and international business. It strengthened penetrative management of key risks, with overall risks under control. The Group further promoted the construction of a strong headquarters, established an office to promote the implementation of the Group’s plans, and carried out closed-loop management of major strategies. It established the China Reinsurance Research Institute, set up a new innovation incubation centre, and strengthened prospective research and innovation management. It improved the operating performance assessment mechanism and improved the assessment system which focuses on the balanced growth of profits. It continued to build a strong base of reinsurance talent, with the Group’s overseas reinsurance talent accounting for over 40% and its domestic reinsurance talent accounting for nearly a half in the industry.
Looking ahead, China Re Group will continue to prioritize stability, focus on its main responsibilities and strengthen its main businesses. China Re will take initiative, seize new development opportunities while strengthening service to national strategies, and steadily improve its operating performance by strengthening value creation. It will consolidate its industry status by strengthening product innovation and technological empowerment, and stick to the bottom line of safety while strengthening risk prevention and control. China Re Group will continue to adhere to the general tone of “making progress while ensuring stability and value creation”, insist on the business strategy of “stabilising growth, adjusting structure, controlling risk and increasing profitability”, stabilise fundamentals, build up new momentum, and actively adapt to industry transformation to continually promote the high-quality development of the Group and create greater value for clients and shareholders.