China Pacific Insurance Group Co Ltd Q2 2023 Earnings Call (Chinese, English) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Qingqing Mao - China International Capital Corporation Limited, Research Division - Analyst : Thank you for the opportunity, Mao Qingqing, analyst from CICC. My first question is related to (inaudible) business ratio is higher. So can management share with us the performance on EVs? What is your view on profitability prospects and the auto business on EV and potential competitions from the car companies as to (inaudible) non-auto who knows that non-auto business see increase on premium and underwriting profitability has improved? As the management let us know what are the enablers, which are short-term enablers and which are long-term enablers? I have a question with Life if possible. The question is for Mr. (inaudible) mentioned that in the first half, the long-term [critical] illness faces headwind would like to ask a question. Previously, the company mentioned that -- to the agents will be encouraged to sell critical illness in the second half. Mr. (inaudible), what is your view on its future development? Particular illness was once the core product in this industry. They used to have confidence in the business, want actions on the level of teams and products will help us to make icebreaking performance? Unidentified Company Representative Thank you for your question. Over the past several years, P&C follows the requirement of high-quality development. I think we've follow three patterns. One is patterned on China's economy. Second is pattern on insurance industry. And third is pattern -- is about our P&C's history development after benchmarking the best performing result. The first half market share for us is up by 2.5 percentage points. Our combined cost ratio is 0.6 percentage points more than the industry performance. Unidentified Company Representative Thank you for your support and care. You mentioned two questions. So begin with (inaudible) address the non-auto business development question that I will talk about, any questions. For non-auto business. I mentioned that we follow industry pattern. When the policies are not favorable and when there is a decrease of sales of new vehicles (inaudible) auto business will be limited. So we have to put a focus on non-auto business development. The last year, we reformed greatly. So organization, no structure on non-auto business. We have group customer resource management center. I believe that this kind of reform will be an important assurance for the development in this area. I just mentioned the three patterns. I believe they are -- they can be categorized as long-term enablers for such a good performance in our auto business. For non-auto business operation, we take some work. For example, house insurance liabilities, insurance and individual non-auto business, we did a lot of work. In the first half, while the house business growth rate is 26.3%, and liabilities insurance had a growth rate of 35.1%. I want to mention that individual non-auto business growth is over 40%. As to health business, we depends on the business layout in line to product supply and for those good performing individual and commercial health insurance products, we increased the sales proportion and contribution. We also accelerated the business development of commercial health business including mid- and high-end medical products. On liabilities insurance, we're focused on the new development pattern of the country and accelerated the quality is the development in this regard. And one important areas such as social governance and technology innovation, we also did something to enhance the company's vitality. This might be some short-term enablers. So in the first half, non-auto combined cost ratio is 7.7% for health. So combined cost ratio is down by 1.1 percentage points. For auto insurance, the combined cost ratio is down by 2.4 percentage points. As to individual non-auto business development is quite good and contribution is quite