China Taiping Insurance Holdings Company Limited Interim Results Presentation. 24 August, 2017

Transcription

1 China Taiping Insurance Holdings Company Limited 2017 Interim Results Presentation 24 August, 2017

2 Forward-looking Statements This presentation and subsequent discussions may contain certain forward-looking statements with respect to the financial condition, results of operations and businesses of China Taiping Insurance Holdings Company Limited. These forward-looking statements represent the Company s expectations or beliefs concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements 2

3 Simplified Company Structure Note (1):Ageas owns the remaining 24.9%, 20% and 20% equity interests in TPL, TPeC and TPAM, respectively. Note (2):PT Megah Putra Manunggal owns the remaining 45% equity interest in TP Indonesia. Note (3):TPSM and TPR (BJ) are wholly-owned subsidiaries of TPL. CTIH s effective interest in TPSM and TPR (BJ) is 75.1%. Note (4):TPIH (HK) and TPL own 61% and 39% of the equity interests of TPR (SH), respectively. CTIH s effective interest in TPR (SH) is 90.3%. Note (5):TPL, TPI and TPPM own 60%, 20% and 20% of the equity interests in TPR (Suzhou), respectively. CTIH s effective interest in TPR (Suzhou) is 85.1%. Note (6):TPL and TPI own 80% and 20% of the equity interests in TPR (Nanning), respectively. CTIH s effective interest in TPR (Nanning) is 80.1%. Note (7):Sinopec Group Company owns the remaining 50% equity interests in TSFL. Note (8):TPL and TPI own 60% and 40% of the equity interests in TPIH, respectively. CTIH s effective interest in TPIH is 85.1%. Note (9):In addition to operating its own business lines, TPIH (HK), TPSM and TPP also act as investment platforms in the asset management business. Note (10):Starr Insurance Holdings, Inc. owns the remaining 49% equity interests in TP Starr. Note (11):The above structure was as of 30 June

4 Highlights and Consolidated Results of Operations Continuous Improvement in Business Quality and Fast Development in Core Business Life insurance s new business value was HK$8.115 billion, increased by 63.4% over the Last Period* Total premiums written and policy fees reached HK$114.0 billion, increased by 21.4% over the Last Period Total assets were HK$587.3 billion, increased by 16.2% over the 2016 year-end Group embedded value per share attributable to owners was HK$31.9, increased by 11.8% over the 2016 year-end figure of HK$28.5, while TPL s embedded value increased by 13.6% over the 2016 year-end* Owners equity was HK$56.1 billion, increased by 9.0% over the 2016 year-end Profit attributable to owners was HK$2.370 billion, decreased by 23.5% over the Last Period The combined ratio of property and casualty insurance and reinsurance business maintained stable, and continued achieving underwriting profit * Calculated in accordance with the C-ROSS 4

5 Highlights and Consolidated Results of Operations (Cont d) PRC Insurance Businesses Continued to Develop Steadily Direct premium of the life insurance increased by 29.1% over the Last Period, higher than market average by 3.2 percentage points First year premium from individual insurance increase by 39.7% over the Last Period; high productivity (RMB300,000 regular premium above) agents increased by 39.0% over the Last Period First year regular premium from bancassurance increased by 68.9% over the Last Period, with more than 60% were payment terms of 10 years or above Long term group staff benefit business increased by 52.3% over the Last Period, with regular premium increased by 142.0% over the Last Period Four persistency ratios of the individual agency and bancassurance channels were industryleading; loss ratio of short-term group insurance was kept in a satisfactory level Total premium of the PRC property and casualty insurance increased by 20.1% over the Last Period. Direct premium increased by 17.5% over the Last Period, higher than market average by 3.6 percentage points Pension assets under management was over RMB144.8 billion, increased by 8.3% over the 2016 year-end Note: All data related in this page is stated in RMB, if not specified 5

6 Highlights and Consolidated Results of Operations (Cont d) Strength of International Operations Continued to Enhance Property and casualty insurance business in Hong Kong sustained its steady growth, with CTPI (HK) continuously increasing its market share and achieving underwriting profit Life insurance business in Hong Kong experienced swift development, TPL (HK) achieved a premium income of HK$1.033 billion TP Macau s premium income sustained its market leadership, with combined ratio of 74.9% and continuous outstanding underwriting result TP Singapore achieved underwriting profitability, in offshore business, it achieved rapid premium growth TP UK s overall combined ratio declined by 4.3 percentage points over the Last Period and sustained underwriting profitability TP Indonesia s direct premium increased by 17.8% over the Last Period, with rapid growth in Chinese interests business; its combined ratio decreased over the Last Period, and the underwriting profitability maintained at a good level TPRe ranked top for the fifth consecutive year in the Hong Kong reinsurance market, with a growth of 39.1% in the property and casualty reinsurance business over the Last Period, a stable combined ratio, and good profitability 6

7 Highlights and Consolidated Results of Operations (Cont d) Steady Development of the Investment Business, Asset Under Management Continued to Achieve a Fast Growth The asset scale achieved a rapid growth. At the end of June 2017, the total investment assets of the Group is HK$476.6 billion, increased by 12.1% over the 2016 year-end; asset under management from third-party asset management business amounted to HK$373.6 billion, increased by 26.2% Reinforced net investment income base. During the first half of 2017, the Group recorded a net investment income of HK$9.685 billion, representing an increase of 18.0% over the Last Period, which indicates that the Group has properly coped with market fluctuations and maintained the stability of investment income Traditional investments were prudent and active. For the six months ended 2017, domestic available-for-sale debt securities investments outperformed the Total Wealth Index of China Bond by 174 bp; the Group s assets credit risk screening shows sound results Proactive development of alternative investment. In response to national strategies, proactive efforts were made on the development of alternative investment, with active exploration in areas such as public-private partnership (PPP), the Belt and Road Initiative, pension health layout and opportunities in supporting the supply-side structural reform. Through these efforts, the Group gained good returns and brand effect 7

8 Highlights and Consolidated Results of Operations (Cont d) Notable success achieved through Group Strategic Cooperation and Cross-selling Initiatives In the first half of 2017, China Taiping signed Group Strategic Cooperation Agreements with 6 large clients. As at the end of June, China Taiping had established strategic cooperation relationships with 73 large clients By the end of June 2017, our cross-selling initiatives achieved HK$3.134 billion insurance sales, including HK$2.574 billion of property insurance sales through TPL, HK$482 million of pension sales through TPL, and HK$78 million of property insurance sales through TPP 8

9 Net Profit by Business Segment HK$ million 1H2017 1H2016 Change Life insurance 1, , % Pension and group life insurance times PRC property and casualty insurance % Overseas property and casualty insurance % Reinsurance times Asset management business % Others* (225.00) N/A Net profit from operations 3, , % Non-controlling interests (728.05) (949.66) -23.3% Net profit attributable to the owners 2, , % * Others mainly include the operating results of the holding company, TPeC, TPIH (HK), TPFH and consolidation adjustments 9

10 Life Insurance Business Review TPL TPL (HK) Note: The Group holds 75.1% of the equity interest in TPL, and 100% in TPL (HK) As TPL (HK) is a newly established company in 2015 and its business is still in its initial state, the results under life insurance business for the first half of 2017 is still mainly contributed by TPL. The following figures are the results of TPL from its operations, before intra-group eliminations. 10

11 Life insurance: Premiums Maintained Steady Growth, with Sufficient Solvency Direct Premiums Written Comprehensive Solvency Ratio ( HK$ million) +23.4%* 89, % 244% 72,345 C-Ross C-Ross 1H2016 1H2017 At 31 Dec 2016 At 30 Jun 2017 * 29.8% growth in terms of RMB over the last period 11

12 Life Insurance: Structure of Gross Premiums By Distribution Channels Further Increase in Proportion of Individual Business (HK$ million,%) 2% 2% 47% 36% Group and other channels* 1H2016 1H2017 1,290 1,358 51% 62% Bancassurance Individual 33,988 32,371 37,067 55,538 1H2016 1H2017 * Other channels is mainly telemarketing 12

13 Life Insurance: Persistency Ratios Stood at the Forefront of the Industry Individual 第 Persistency 13 个月之保费继续率 ratio 13 th month 第 Persistency 25 个月之保费继续率 ratio 25 th month Bancassurance 第 Persistency 13 个月之保费继续率 ratio 13 th month 第 Persistency 25 个月之保费继续率 ratio 25 th month 93% 95% 97% 92% 94% 96% 88% 89% 92% 87% 89% 91% At Dec 年末 2015 At Dec 2016 年末 At Jun 年 月末 At Dec 年末 2015 At Dec 2016 年末 At Jun 年 月末 Note: According to communications with peers, TPL was No.1 in both Individual and Bancassurance Channels in terms of 13th month persistency ratio 13

14 Life Insurance: Growth of In-Force Business Promoted Growth of Embedded Value Embedded Value (HK$ million) 92, % 104,598 43,750 Adjusted Net Worth 44, % In-force Business Value 47,919 60,848 偿二代 At 31 Dec 2016 C-Ross At 30 Jun 2017 C-Ross 14

15 Life Insurance: New Business Value Grew Substantially New Business Value (HK$ million) 8, % 4,965 C-Ross C-Ross 1H2016* 1H2017 * the assumption and methodology used in calculating NBV for 1H2016 is the same as 1H2017, and similarly hereinafter, if not specified 15

16 Life Insurance: NBV Margin Kept Improving NBV Margin 23.0% +4.7pp 27.7% C-Ross C-Ross 1H2016* 1H2017 Note: NBV Margin=NBV/First Year Annualised Premium; First Year Annualised Premium=First Year Regular Premium + Single Premium/10, and similarly hereinafter 16

17 Individual Channel: First Year Premium Realised Substantial Growth; Business Structure Further Improved First Year Premium (HK$ Million) First Year Regular Premium Structure (%) +32.8% 22, % 0.1% 16, % 66.4% Short term savings Long term savings 26.8% +2.6pp 29.4% Long term protection Others 3.2% 4.1% 1H2016 1H2017 1H2016 1H

18 Individual Channel: Individual New Business Premium for Health Insurance Grew Substantially and its Proportion Increased significantly Individual New Business Structure (%) Individual New Business Health Insurance Premium (HK$ Million) 10.6% +8.0pp 18.6% 4, % 89.4% 81.4% Health Insurance Others 1,862 1H2016 1H2017 1H2016 1H

19 Individual Channel: Critical Illness Insurance New Business Grew Rapidly; Actual Experience and Pricing Assumption for Insurers Age Closely Matched Year Distribution of Critical Illness In-force Business Insurers Age Distribution of Critical Illness In-force Business 17.9% 16.1% 5.7% 8.8% 11.1% 11.7% 18.9% 23.2% 48.2% 38.4% 31.7% 8.7% 9.9% 19.3% 30.4% 2.5% 7.5% 3.7% 12.7% 16.3% 24.0% 24.5% 25.2% 16.9% 30.0% 16.9% 9.6% 15.1% 8.5% 6.4% 33.8% 29.3% 17.0% Coverage Premium Policy Year 1 Year 2 Year 3 Year 4 Year 5 and above Coverage Premium Policy Age 0-9 Age Age Age Age Age 50 and above Note: 1. based on all in-force critical illness insurance policies as of June 30, Figures may not match totals due to rounding 19

20 Individual Channel: Agency Force Realised Rapid Growth; High Productivity Agents Grew Substantially Number of Agents (person) Number of High Productivity Agents* (person) 261, % 390,668 7, % 10,985 At 31 Dec 2016 At 30 Jun 2017 At 30 Jun 2016 At 30 Jun 2017 * High productivity agent refers to agent with RMB300,000 FYP and above 20

21 Individual Channel: Agency Force Trend and Development Assessment was made in strict accordance with the Basic Law in 2016, and reached 254,000 at the end of the year, an increase of 17% over the beginning of the year; agency force realised growth with break through in 2017, and 205,000 new agents were increased in the first half year, reaching 381,000 at the end of June, which is a 50% growth compared with the beginning of the year We have moderately raised some of the basic standards of the Basic Law. For example, the standard of new contract commission for active agent was raised from RMB 300 to RMB 500; the group structure standard for promotion to senior executives was adjusted, and the requirement for direct groups was increased In 2017, we focus on strengthening the basic management, and creating an HR development ecosystem. We allocated resources centered on five platforms based on the center branch (i.e. agency reserve platform, agency employment platform, agency retention platform, client development platform and promotion platform) Thousand Agents Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Note:Data from this page to page24 is from traditional individual channel and does not include the Sinopec gas station project 21

22 Individual Channel: Key Agent and Performance Indicators Retention Rate H2016 1H th Month Retention Rate 75.1% 74.2% 82.0% 13 th Month Retention Rate 41.6% 47.7% 48.7% 24 th Month Retention Rate 24.3% 26.0% 24.0% Agency Force per Group, Agency Force per Department H2016 1H2017 Group 32,489 29,570 43,388 Agency Force per Group Department 5,892 5,356 6,845 Agency Force per Department

23 Individual Channel: Key Agent and Performance Indicators (Cont d) Key Performance Indicators H2016 1H2017 Policy Per Month Per Capita Productivity Per Month Per Capita (Regular) 15,145 23,103 23,256 Monthly Overall Activation Ratio 52.5% 58.0% 58.6% Three Month Formalization Ratio 45% 42.7% 44.6% Cumulative Activation Ratio In Three Months 81.3% 83.3% 87.2% Agents With Monthly RMB 10K Sales (Regular Premium) 39,273 63,943 73,321 Agents With Annual RMB 1MM Sales (Regular Premium) 1,924 1,651 2,446 Note: 1. All data related in this page is stated in RMB, if not specified 2. Regular premium in this and next page is company s assessment indicator, which is calculated as FYP+Single Premium* In the first quarter of 2017, the high regular premium for the Jump Start period significantly increased the agent productivity; products with high NBV will be sold in the second half of the year, and it is expected that the average annual indicators will fall back 23

24 Individual Channel: Key Agent and Performance Indicators (Cont d) The Number of High Productivity Agent Grew with an Optimised Structure (1H2017 VS 1H2016) The number of agents with monthly regular premium of over RMB 10,000 reached 73,321 in 1H2017, an increase of 15% YoY, of which new agents of 2017 accounted for 24% Start Working High Productivity Agents* Percentage Comparison with 1H2016 Number Percentage Note 1H ,645 24% 22,324 35% Recruited in ,300 35% 20,621 32% Recruited in ,326 15% 6,114 10% Before ,050 26% 14,884 23% Total 73,321 63,943 Recruited in 2014 and 2013 Recruited 2 years before * High productivity agents refer to the agents with monthly regular premium of RMB 10,000 24

25 Individual Channel: NBV Margin Kept Growing Steadily Individual NBV Margin 30.7% +3.9pp 34.6% C-Ross C-Ross 1H2016* 1H

26 Bancassurance Channel: First Year Regular Premium Grew substantially; Business Structure Kept Improving First Year Regular Premium Premium Structure (HK$ million) (%) 2, % 4, % 28.9% 13.5% 34.4% First year regular premium Renewal regular premium 63.1% 52.1% Single premium 1H2016 1H2017 1H2016 1H

27 Bancassurance Channel: Took Initiative to Adjust Business Structure by Reducing Single Premium and Increasing Regular Premium Business In the first half of 2017, single premium decreased by 21.3% YoY while regular premium increased by 23.6%, accounting for 47.9% of total premium, with an increase of 11 percentage points YoY (HK$ million) 1H2016 1H2017 YoY Growth Percentage Single Premium 21,440 16, % 52.1% Regular Premium 12,549 15, % 47.9% Note: Premiums are accounting data; regular premium = first year regular premium + renewal premium 27

28 Bancassurance Channel: Channel Structure Improved We had positive growth in regular business among the five major banks YoY, with the channel development trend improving (HK$ 100 million) H2016 1H2017 YoY Growth 67% 70% 60% 50% % 40% % 10% 8% ICBC CCB ABC BOC BOCOM 30% 20% 10% 0% 28

29 Product: Promote Product Structure Transformation towards Value Growth; Individual Long-term Protection Business Growth Rate was Higher Than Overall Growth by Focusing on Customers Health Protection Needs Long-term Protection Products FYP (1H2016 vs 1H2017) % (HK$ 100 million) In 1H2017, long-term protection products grew 44.6%%, which is higher than the overall growth Individual Channel continue to focus on customers health protection needs and promote normal operation of health insurance. Among long-term protection products, illness insurance sales grew significantly and accounted for over 90% 1H2016 1H2017 Note: Long-term protection products refer to the products of illness insurance, accident insurance, term life insurance and whole life insurance with an insurance period of more than one year 29

30 Product: Promote Product Structure Transformation towards Value Growth; Bancassurance High Value Regular Business Grew Rapidly, and Proportion of 10-years and above Regular Premiums is Stable Bancassurance FYP (1H2016 vs 1H2017) H % (HK$ 100 million) H2017 Bancassurance Regular Products Structure (1H2017) 34.9% 1.6% 63.5% years 5-9 years Others In 1H2017, single premium business was steady but declined, and regular premium business grew rapidly compared to the same period in 2016 For regular premium business, long-term products dominate, with years products accounted for 63.5% 30

31 Product: Focus on Customers Protection Needs and Support Collaborative Growth of Business Scale and Value to Achieve Breakthrough Growth for Core Value Business Individual Product Bancassurance Product Focus on customers pension and health needs, constantly optimise the product structure, and support the coordinated development of regular premium and business value Focus on annuity products in Jump Start and mid-year, continue to promote longterm protection products throughout the year, build worry-free series products, and help achieve agency force target Support transformation towards value growth, match the operation of precision marketing projects and normal business model, classify customer base, and actively develop high-value regular products Strengthen high value annuity regular products, shrink the size of single business, and supplement long-term protection products throughout the year 31

32 Mainland P&C Insurance Business Review TPI Note:The Group holds the 100% equity interest of TPI The following figures are the results of TPI from its operations, before intra-group eliminations 32

33 Mainland P&C Insurance: Premium Growth was Higher than Industry Average; Solvency Remained Stable Direct Premiums Written 12, %* (HK$ million) Comprehensive Solvency Ratio 206% 216% 10,820 C-Ross C-Ross 1H2016 1H2017 At 31 Dec 2016 At 30 Jun 2017 * 17.5% growth in terms of RMB over the last period 33

34 Mainland P&C Insurance: Combined Ratio Kept Stable Over The Years Combined Ratio Trend of Combined Ratio Expense Ratio 费用率 99.6% Loss 赔付率 Ratio 98.8% 99.8% 99.8% 99.8% 99.8% 98.8% 49.2% 49.9% 50.4% 48.9% At Jun 年 月底 At Jun 年 月底 2016 At 31 Dec 2013 At 31 Dec 2014 At 31 Dec 2015 At 31 Dec 2016 At 30 Jun

35 Overseas P&C Insurance and Reinsurance Businesses Review HK & Macau CTPI (HK) TP Macau Overseas TP Singapore TP UK TP Indonesia Reinsurance TPRe TPRe (China) Note:The Group holds 55% of the equity interest in TP Indonesia, and 100% in the other companies listed above The following figures are the results of TPI from its operations, before intra-group eliminations 35

36 Overseas P&C Insurance and Reinsurance: P&C Premiums Kept Increasing; Non-Life Reinsurance Developed Rapidly +1.6% Overseas P&C Direct Premiums Written (HK$ million) Reinsurance Premiums Written* (HK$ million) 1,709 1,736 1H2016 1H2017 Non-Life Life +7.9% 1,212 1,123 5, % 6,564 2,555 3, % ,881 4,009 Overseas P&C HK & Macau Other Overseas 1H2016 1H2017 * Including business of TPRe (China) and excluding universal insurance 36

37 Overseas P&C Insurance and Reinsurance: Combined Ratios Kept at a Low Level, with Business Quality Remained Sound Combine Ratio +2.0pp +2.4pp +5.0pp +1.3pp 92.2% 94.2% 92.5% 94.9% 92.9% 92.7% 94.0% 87.9% * non-life reinsurance business Overseas P&C and Re HK & Macau Other Overseas Reinsurance* 1H2016 1H

38 Pension and Group Insurance Businesses Review TPP Note: The Group holds 100% of the equity interest in TPP The following figures are the results of TPI from its operations, before intra-group eliminations 38

39 Pension and Group Insurance Businesses: Premium Income Kept Rapid Growth Premiums Written (HK$ million) Annuity Entrusted Assets (HK$ million) Annuity Invested Assets (HK$ million) 2, % 3,145 60, % 65,885 70, % 81,324 1H2016 1H2017 At 31 Dec 2016 At 30 Jun 2017 At 31 Dec 2016 At 30 Jun

40 Investment 40

41 Allocation of Investment Assets of the Group Investment Assets +12.1% (HKD million) 425, ,616 At 31 Dec 2016 At 30 Jun 2017 % of Total At 31 Dec 2016 At 30 Jun 2017 Fixed income 73.6% 78.7% Debt securities 38.7% 44.8% Term deposits % 9.1% Debt products 17.6% 17.9% Other fixed income investments 6.4% 6.9% Equity investments 13.3% 16.4% Equity securities 5.2% 6.8% Investment funds 2.9% 2.4% Other equity investments 1 5.2% 7.2% Investment properties 4.6% 4.0% Cash, cash equivalents and others 2 8.5% 0.9% Total 100.0% 100.0% Note: 1. Including HK$2.9 billion equity investment in Taiping & Sinopec Financial Leasing Co. Ltd. being accounted for at a cost basis 2. Excluding HK$8.0 billion of funds for daily operations (HK$2.8 billion for the end of 2016), which includes cash, saving deposits and time deposits 41

42 Investment Income 9, % 8,360 3 (HK$ million) 1,145 8,207 9,685 Net Realised and unrealised investment gains 1 Net investment income 2 (1,325) 1H2016 1H2017 Total investment yield % 4.02% Note: 1. Including the income from the spread of investment securities, gain or loss on changes in fair value and impairment loss 2. Including the interest income from deposit, interest income from bonds, dividends from equity investments, rental income from investment properties and deducting interest expense on securities sold under resale agreements 3. Also including the interest income generated from funds for daily operations, excluding income generated from insurance asset management products, investment funds, equity investments that has been classified as share of results of associates and joint ventures 4. In the calculation of investment yield, as the denominator, the average investment assets takes into account the effect of securities purchased under resale agreements and securities sold under repurchase agreements. When annualising the investment yield, the interest income from deposit, interest income from bonds and rental income from investment properties and deduction of interest expense on securities sold under resale agreements were multiplied by two, while the dividend from equity investments remained unchanged 42

43 Debt Investments: High Credit Ratings of Debt Asset Domestic bonds investment represented 86.6% of the total debt investment. Within the domestic bonds, 98.6% were high rating bonds, such as government bonds(gbs), financial policy bonds (FPBs), and bonds with AAA ratings. Investment grade bonds with BBB ratings or higher reached 100% 45.4% 35.0% Credit Ratings of Domestic Bonds 18.2% 1.3% 0.1% 0.0% AAA GBs FPBs AA+ A-1 AA Foreign bonds investment constitutes 13.4% of the total debt investment, of which 70% were investment grade with international ratings, while the remaining were issued by government and large corporations, with adequate credit enhancements 43

44 Alternative investments proportion kept stable, with structure improved Alternative Investments Alternative investments held by the Group amounted to HK$138.5 billion, representing approximately 23.6% of the total assets, from which the ratio of trust products and assets management products significantly increased, reflecting the investments has been further diversified The credit ratings of the domestic financial investment debt products has been continually optimised, products rated AAA accounted for 93.1%, representing an increase of 1.4 percentage point over the 2016 year-end Alternative investments risk remained at a low level Allocation of alternative investments Regarding asset types, infrastructure creditor s scheme and real estate creditor s scheme accounted for 39.5%, trust scheme took a proportion of 37.7%, asset management products and asset support scheme took a share of 9.4%, and the rest of 13.4% are overseas bond fund and convertible bonds In terms of credit enhancement, quasi central government debts/bank guarantee and credit enhancement free products cover 34.6%, large-scale enterprise guarantee covers 14.3%, local state-owned enterprise and other guarantee products 36.0%, mortgage/pledge products 7.2%, the others 6.9%, and non-credit enhancement only 1.0% Real Estate Financial Investment Debt Products Real estate financial investment debt products of approximately HK$16.3 billion, represented only 2.8% of the total assets The credit ratings of the real estate financial investment debt products remained well Purchased External Financial Products Purchased external financial products of about HK$31.7 billion, represented 5.4% of the total assets, the ratio increased by 0.7 percentage point over the 2016 year-end The credit ratings of the purchased external financial products held by the Group kept high, with 97.6% rated AAA, and 2.4% rated AA Note: including exposures to each other, which is not directly in the total 44

45 Outlook 45

46 Outlook Continue to Promote the Top-quality Strategy to Create the Most Unique and Highest Potential Top-quality Insurance Company In the second half of 2017 and the subsequent period, China Taiping will continue to intensify its Topquality Strategy and further boost its awareness of responsibility, service, risk, reform and openness. The Company will focus on developing its insurance business, and make solid efforts to its international development and integrated financial layout. Solid efforts will also be made to enhance risk prevention and control, reform and innovation, cost reduction and efficiency improvement, to pursue further progress under the Top-quality Strategy, so as to create greater value to country, investors and customers TPL In respect of individual insurance, TPL will maintain its core orientation of value growth, with continuous focus on agent development and more intensive project operation, to help achieve breakthroughs in various indicators In respect of bancassurance, TPL will focus on the function of insurance protection, accelerate its transformation into the protection business, stick to value growth, and further expand the regular premium business TPL will speed up its innovative development, and obtain fresh breakthroughs in key areas, channels and innovative projects 46

47 Outlook (Cont d) TPI TPP Reinforce motor insurance business while accelerate the development of non-motor insurance business. Improve the professional channel construction and actively promote the front line staffs. Intensify cost control to reduce combined ratio Further improve market reactive mechanism and risk pricing ability, actively respond to the market competition pressure brought by the second motor insurance premium rate marketisation To boost the pension business, actively deploy the occupational annuity business, and strive to achieve the strategy of Competing at an advanced level To further expand the core business of group insurance, optimise business structure, and take steps to reduce the proportion of business that features high handling fees and high claims TPL (HK) To further enhance the business management capability and channel productivity, and actively promote the collaboration with Chinese financial institutions in Hong Kong 47

48 Outlook (Cont d) Overseas Business Overseas Property and Casualty insurance companies will grasp opportunities of national policies and strengthen the healthy, optimal and powerful development, improve client service capacity and expand market influence CTPI (HK) and TP Macau will further explore innovation of products and channels, cultivate new business growth engines so as to maintain their leading positions; TP Singapore, TP UK and TP Indonesia will continue to serve the national strategies of The Belt and Road and Going Global, focus on improving market competitiveness and enhancing both quality and quantity Reinsurance Business TPRe will practice the Group s Top-quality Strategy with its international features highlighted, accelerate the globalisation process, transform itself from a market follower to a market leader, achieve the scale and efficiency growth simultaneously and pursue comprehensive development in both P&C and life insurance TPRe (China) will keep improving corporate establishment, enhance corporate governance and risk prevention level; consolidate its position as leading reinsurer and continue to boost market influence 48

49 Outlook (Cont d) Investment The second half of the year will witness continuous recovery of the global economy, including a Chinese economy that features a more prominent trend of steady and positive development. In this context, the Group will place more emphasis on equity value investment, long-term investment, as well as stable and healthy investment, and seek opportunities for long-term equity investment. In respect of bond investment, the Group will keep increasing the allocation proportion, optimise allocation structure, and strive for an effective balance between the carrying amount gains and market value gains In respect of alternative investment, the Group will fully capitalise on its layout in integrated finance and its cross-border advantages to invest in national initiatives and major construction projects, such as the Belt and Road Initiative and Beijing-Tianjin-Hebei coordinated development. The Group will also leverage its insurance business to identify quality targets in pension service, healthcare and automobile industrial chain. In respect of real estate investment, the Group will closely follow national policies and stay attentive to regional opportunities, with investment priorities to the regions that boast significant development potential such as Xiong An New Area and Guangdong-Hong Kong- Macau Bay Area. As for overseas real estate investment, the focus will be the well-established properties in developed countries and such regions that enjoy active investment activities Meanwhile, the Group will actively build its credit rating capacity, enhance the risk screening of existing assets, keep perfecting the mechanism for handling investment risks, and develop a system for risk prevention and control that covers the whole investment process 49

50 Questions and Answers 50