ZhongAn On-line P & C Insurance coverage protection Co., Ltd. (OTCPK:ZZHGF) Q2 2024 Earnings Conference Identify August 27, 2024 5:00 AM ET
Agency Contributors
Jiang Xing – Frequent Supervisor and CEO
Li Gaofeng – CFO and CIO
Wang Min – Govt Vice Frequent Supervisor and Secretary of the Board
Wayne Xu – President, ZhongAn Worldwide
Conference Identify Contributors
Rick Zhao – Morgan Stanley
Qingqing Mao – CICC
Michael Li – Monetary establishment of America Securities
Operator
[Foreign Language] to attend this 2024 Interim Consequence Identify of ZhongAn On-line. I’m the Director of the Investor Relations and Capital Markets. My title is Lin.
To start with, please allow me to introduce the administration, the Frequent Supervisor of ZhongAn and CEO, Jiang Xing; Mr. Gaofeng, the Chief Funding Officer and Chief Financial Officer; the Vice Frequent Supervisor and Secretary of the Board, Mr. Wang Min; and likewise Wayne Xu, the President of Worldwide of ZhongAn.
Now please give the bottom to Mr. Jiang Xing.
Jiang Xing
All correct. So good afternoon, dear consumers and administration. I’m Jiang Xing, the Frequent Supervisor of ZhongAn On-line. I need to welcome all individuals to attend the 2024 interim outcomes conference of ZhongAn On-line. And likewise, I’m appreciating your regular consideration and assist to ZhongAn.
2024 is the beginning of a model new decade of ZhongAn. And likewise throughout the newest launch, 2024, Fortune China 500 itemizing, ZhongAn score has improved by 37 areas to 460 years and reflecting a summary and recognition of our achievements over the earlier decade. Going by way of the delicate macro exterior setting recently, we’re proper right here to the mission of empowering the finance enterprise with utilized sciences and providing insurance coverage protection service with our caring hand and embrace the value of the best effectivity of yesterday is a minimal requirement of within the current day.
We’re centered on listening to our clients’ recommendations, bettering shopper experience and likewise staying true to our distinctive aspiration and driving the long-term sustainable development of ZhongAn. Inside the first half of 2024, we achieved an entire premium income of HKD 15.23 billion, a year-on-year enhance of 5.4%.
And in phrases of the general premium written, we maintained a market share of over 20% on this pension and P&C insurance coverage protection sector, holding the first place. Beneath the model new accounting regular, our insurance coverage protection service earnings throughout the first half of the 12 months reached HKD 1.588 billion, a year-on-year enhance of 19%.
And likewise the combined ratio for underwriting was 97.9%, sustaining a healthful underwriting profitability. Moreover with a dedication to the long-term and confirmed operation. So our internet belongings have continued to develop, and our solvency stays ample with an entire solvency adequacy ratio of 224 present on the end of the first half of the 12 months.
We had been moreover fixed acquired drawback credit score standing of Baa1 from Moody’s and A minus from A.M. Biggest. And that’s considered one of many strategic engines of ZhongAn, the experience enterprise has been benefited from the continued digital transformation throughout the house and world financial sector.
Inside the first half of the 12 months, our experience export earnings elevated by 55.5% year-on-year to HKD 4.24 billion, for the house experience output earnings reaching HKD 319 million, a year-on-year progress price of spherical 112.7%. And this progress price was primarily pushed by the enlargement of latest customers throughout the financial, retail and manufacturing sectors.
Together with consolidating our reinsurance commerce shopper base. This has resulted in quick progress supporting the launch of a variety of merchandise beneath the ZhongAn enterprise progress and infrastructure sequence. And likewise on account of enhance throughout the prototype earnings and enchancment in operational effectivity, the Know-how part diminished its loss by HKD 165 million throughout the first half of the 12 months evaluating to the equivalent interval remaining 12 months.
And now trying on the Hong Kong Digital Monetary establishment, ZA Monetary establishment effectivity. Sustaining a very strong progress momentum this 12 months, attaining an internet income of HKD 255 million throughout the first half of the 12 months with a 12 months enhance of 45.9% and the file progress on this particular income has led to the assumption of scale outcomes, bettering the related price to income ratio and likewise narrowed by HKD 99.1 million throughout the first half of the 12 months.
And likewise, now now we have realized the overall income attributable to the mum or dad agency of HKD 55 million. And likewise, that’s the very essential 12 months for our 14th, 5-year plan in response to the guiding operation and promotion of high-quality development of inclusive finance issued by the Nationwide Financial Supervision and Administration Price, now now we have remained devoted to empowering with experience, providing progressive, inclusive and numerous insurance coverage protection merchandise.
And likewise fulfilling the curiosity operate as a buffer throughout the monetary system and stabilizing society and likewise, we’re going to develop the small and diversified and useful inclusive insurance coverage protection merchandise tailored to the Net conditions and enhancing the consolation and accessibility of insurance coverage protection suppliers.
The first half of the 12 months, we provide nicely being and unintended insurance coverage protection safety for over 1,000,000 new residents and versatile workers along with the meals provide riders and couriers and rail, painting, drivers. Moreover, we launched over 100 distinctive merchandise overlaying a number of million individuals with quant sicknesses and likewise standardized the nicely being conditions.
We moreover develop insurance coverage protection merchandise for groups, along with women and aged and making a safety internet for them. And likewise furthermore, addressing the ache elements of house micro and small enterprises on this operation, we equipped the multiline insurance coverage protection safety, along with property insurance coverage protection and obligation insurance coverage protection for over 1.33 million micro and small enterprises, serving to to spice up the possibility resilience.
Inside the first half of 2024, in our proprietary operated channels, now now we have adjusted our promoting strategies, specializing within the shopper operation throughout the personal space and bettering the buyer experience, laying a secure foundation for the long-term shopper price realization, and likewise throughout the 4 ecosystems, now now we have moreover upgraded the suppliers of nicely being, family and pets, proceed to complement our product matrix to supply clients and clients with useful, economical and full manufacturing.
Inside the first half of the 12 months, for all the proprietary channels, 40% of the premium was contributed by the earlier clients from 2019 and even older displaying the accompany of ZhongAn to our clients. Inside the first half of 2024, the frequent number of insurance coverage insurance policies held per shopper reached 1.6 in our proprietary channel and HKD 667 for the frequent premium per shopper and leveraging our self-developed data platform and the consumer middle platform.
We’ve now achieved a real-time data sharing all through all of the ecosystem. And likewise, we’re servicing your entire life cycle of the purchasers. Inside the first half of the 12 months, the general premium proprietary channel was RMB 3.6 billion, and likewise with additional insurance coverage insurance policies purchased and by contributing to 31% of the general premium and likewise the renewal price elevated by 3.2 proportion elements and reaching 95% year-on-year. And subsequent, merely now I’ve launched the overall state of affairs. And subsequent, I need to focus on to you regarding the progress of each enterprise part throughout the first half of the 12 months.
The first is the nicely being ecosystem. Inside the first half of 2024, now now we have equipped the nicely being safety to roughly 12.39 million insured and with the general premium reaching — order for capital reaching RMB 343 million.
And likewise by means of the inclusive finance or healthcare, now now we have upgraded and iterated, the upgraded mannequin of 1 million healthcare safety and likewise this elevated the accessibility of the insurance coverage protection service and expanded the safety to the preexisting state of affairs people, individuals with quant sicknesses and explicit occupational group. And likewise tapping into the market amount. Moreover to deal with the unmet needs all ache elements.
That’s inclusive merchandise, along with to member. We’re overlaying over 100 distinctive merchandise throughout the first half of the 12 months, now now we have the general premium progress price exceeded 2.7x. And likewise our outpatient emergent insurance coverage protection merchandise extended the service conditions from the inpatient care to outpatient care, meeting clients the daily high-frequency medical needs and likewise attaining quick progress. So this complete premium elevated a lot. And the general premium reached RMB 427 million with a year-on-year enhance of 321%.
Apart from that, our short-term essential illness product turned moreover the primary various for ZhongAn clients to spice up their safety, and this has achieved a very common progress throughout the first half of the 12 months with the general written premium is exceeding RMB 800 million. And likewise, we’re creating the medium to high-end medical insurance coverage protection merchandise.
And likewise this 12 months, now now we have been moreover making an attempt to know the ache stage of many purchasers and likewise, now now we have moreover launched a variety of the totally different massive spectrum and wide range coated merchandise and meeting the people space of need of outpatient and emergent visits. And these merchandise had been welcomed by most of the people, and we had a very spectacular premium progress. Subsequent, trying on the digital life ecosystem.
Inside the first half of 2024, the general premium reached RMB 7.47 billion, throughout the first half of 2024, primarily benefiting from the sustained profitability of the e-commerce commerce and likewise the quick progress of progressive merchandise identical to the pet insurance coverage protection, scenario-based accident insurance coverage protection and household insurance coverage protection, et cetera.
On this E-commerce part, we equipped the purchasers with the built-in reply overlaying all of the e-commerce transaction chain, along with the return transport insurance coverage protection, prime quality assurance, account security and logistics security. Inside the first half of 2024, our E-commerce enterprise part captured the possibility provided by the overall prosperity of the e-commerce commerce sustaining a quick written premium progress.
Inside the Journey and Aviation enterprise part, we adopted a additional differentiated method, strengthening the journey development and product R&D in response to the gradual restoration of every affected individual and outbound journey, whereas bettering the enterprise prime quality.
With regards to Innovation enterprise part, the pet insurance coverage protection achieved over 2.8x premium progress will be in complete 1.46 million new pet proprietor clients throughout the first half of the 12 months and likewise primarily based totally on in depth — moreover claims data analysis, we updated and iterated the distinctive 107 cowl illnesses in our pet foremost illness insurance coverage protection product, overlaying additional widespread illnesses amongst pets, enhancing the product competitiveness and likewise releasing the product price.
As of June 30 of 2024, our pet insurance coverage protection service group further expanded to over 18,000 off-line pet hospitals and restore institutions and overlaying foremost cities nationwide. The pet insurance coverage protection service as a result of the supplier for suppliers providing over 930,000 suppliers throughout the first half of the 12 months, a year-on-year enhance of 3x and one out of every three pet insurance coverage protection clients actively choosing to utilize our pet suppliers.
And together with the favored pet insurance coverage protection, by way of the reporting interval, we continued to rigorously adjust to the occasion growth of latest consumption and actually quickly launched a variety of progressive insurance coverage protection merchandise primarily based totally on the knowledge analysis and monitoring of the purchasers’ life together with the ecosystem companions. We’re exploring new conditions throughout the meals provide sector, overlaying the ache elements such as a result of the meals safety and provide delays with related product premiums rising by threefold.
So normal speaking, we’re nearly promoting the Healthful China and the Well being China, moreover specializing in these fashionable lifestyle groups, overlaying 10 fully totally different conditions for practice and sports activities actions and overlaying the unintended insurance coverage protection of tenants, utilizing sports activities actions on winter and snow et cetera.
And now trying on the consumer finance ecosystem. Inside the first half of the 12 months, coping with tough macroeconomic and industrial setting, we proactively and strategically diminished our enterprise scale. On the end of the first half of the 12 months, the steadiness of insured loans was RMB 23.1 billion, down by 15% evaluating with the equivalent interval remaining 12 months.
We operated prudently specializing in small dispersed and short-term Net consumer finance belongings with the borrower primarily being near-prime clients aged at 30 to 50 — 45, and the frequent mortgage amount was HKD 7,500 with the frequent interval of about 10 months, leveraging the large data and totally different technological enablers. We carried out real-time menace administration, strengthened put up mortgage monitoring and achieved a sustained underwriting profitability.
And remaining nevertheless not least, trying on the automotive ecosystem. We achieved the breakthroughs in scale, prime quality and restore throughout the first half of the 12 months. We actively embrace the wave of latest vitality autos with the general written premiums for the model new vitality autos rising by 215% year-on-year and now accounting for over 10% for the general auto insurance coverage protection premiums.
And by means of the consumer experience, we upgraded our one-stop intelligent video declare service using artificial intelligence and totally different utilized sciences. On the end of July, the safety price of ZhongAn’s video claims situations, which has change into the first traits of our agency, and now now we have the declare situations reached 50%.
And with this experience, we’d full it the extent inspections in as fast as six minutes and lowering the frequent inspection time by 85% compared with the off-line inspections. On the same time, we enhanced the possibility identification and alert specializing in underwriting personal costs and achieved a combined ratio for auto insurance coverage protection that outperformed the preliminary frequent throughout the first half of the 12 months. So subsequent, for the Know-how part, our ecosystem.
We’ll hand the choice over to Wang Min.
Wang Min
All correct. Thanks very loads, Jiang for introduction.
And now please allow me to share with you the progress of Know-how part throughout the first half of the 12 months. We’ve now continued to spend cash on cutting-edge utilized sciences like artificial intelligence and likewise reshaping the — every hyperlink of the insurance coverage protection price chain by means of experience. Internally, AI has improved the effectivity all through quite a few factors from product promoting, menace administration and to daily operations.
So in consumer service, we launched a full AI-based humanoid interactive service, which elevated the effectivity of our buyer assist advisor by over 15% in medical insurance coverage claims course of. We built-in the intelligent digicam service to spice up the experience of submitting provides and discovering claims.
We moreover launched an AI-based claims Compass on-line buyer assist bot seemingly lowering the need for human methods. In addition to, we established an intelligent data assortment platform and an intelligent analysis platform, incorporate big model and a small model supplies classification integration choices, and these enhancements reduce the human labor and time costs, efficiently bettering the analysis effectivity and extra enhancing shopper experience.
In experience export aspect, the ZhongAn Know-how Output enterprise, which relies on deep expertise in insurance coverage protection experience attaining part breakthroughs in regulatory experience, data integration, and intelligence insurance coverage protection core methods, intermediary middle office and insurance coverage protection digital promoting, sustaining quick progress for our enterprise.
Inside the first half of 2024, the group’s complete experience export earnings reached RMB 424 million, rising by 65% year-on-year. As of June 30 of 2024, now now we have first serviced 892,000 customers and signed in complete six new customers from insurance coverage protection industries and likewise seven from new customers in banking, brokerage and fund insurance coverage protection from the industries, and likewise benefiting from the rising demand of house data experience innovation and likewise promotion of Digital China initiative. In complete, now now we have reached RMB 392 million for this House Energy Output part, rising by 171% year-on-year.
And on one hand, our merchandise such as a result of the property insurance coverage protection core system, intelligent promoting and data intelligence have signed by many house insurance coverage protection commerce claims. Moreover, from the alternative hand, now now we have the continued enlargement of our boundaries extending to financial industries such as a result of the brokerage and banking, and extra cowl to the promoting infrastructure operations and totally different merchandise, they’re moreover serving to customers to comprehend the quick enterprise progress and accelerating their digital transformation.
It’s worth mentioning that by means of the enterprise product sequence, now now we have productive end-to-end and self-developed IFRS 17 system reply, which is acceptable with a variety of house chips, servers and database methods and has signed by 15 foremost house insurance coverage protection corporations overlaying every life and property commerce, and the contract amount has grown shortly. Eventually, we’re going to proceed leveraging the experience, power and performance of ZhongAn can proceed to assemble the digital monetary system and Digital China.
Now I hand the choice over to Wayne to talk to us about development of ZhongAn Worldwide.
Wayne Xu
Thanks very loads, Wang Min and now I shall be answerable for telling you one factor regarding the worldwide enterprise.
And likewise now now now we have realized this experience export enterprise of worldwide by ZA Tech established in 2018, now now we have established our experience and choices primarily based totally on Graphene and Fusion and Graphene with a well-known insurance coverage protection like AIA, Generali, Prudential and Zurich.
Moreover, now now we have companions with the digital platforms like Carro and PayPay, persevering with setting up the — and likewise rising the embedded insurance coverage protection corporations. Over the six years, now now we have expanded into 12 worldwide areas and areas globally, and established workplaces in 16 in several worldwide areas and areas, along with Tokyo, Thailand, Germany, Denmark, France and Ireland.
In May of this 12 months, we innovatively launched the agricultural drone damage insurance coverage protection manufacturing reply with DJI in Thailand, leveraging our in depth overseas collaboration group and secure insurance coverage protection experience capabilities to quickly assist the DJI’s related initiatives in Thailand.
In March, ZA Tect completed a USD 35 million Assortment A financing, attracting world renowned institutional consumers and formally referred as Peak3, with a model new mannequin coping with the world. The company will pace up enlargement in further areas and tempo up its format in AI and enormous data, driving the worldwide insurance coverage protection commerce’s digital transformation within the course of intelligence. And likewise by means of enterprise data, by way of the reporting interval, now now we have reached RMB 132 billion for the experience export earnings.
And likewise, now now we have reached RMB 127 million for our annual subscription earnings ARR, with a loss significantly narrowing. In relation to the overseas experience export enterprise in Hong Kong, our digital monetary establishment, ZA Monetary establishment continues to advance its imaginative and prescient of setting up one-stop digital financial service platform in Hong Kong, providing rich, useful and inclusive financial suppliers to retail clients and small and medium-sized enterprises.
The first half of the 12 months, the ZA Monetary establishment’s income was excellent. And likewise in complete, now now we have realized the general asset of nearly HKD 20 billion, evaluating with the highest of 2023, 43.2% had been elevated. The soundness of the deposit, HKD 16.8 billion, rising by 43.1% versus the highest of 2023, because of the curiosity hike cycle and enriched the mortgage merchandise, the web unfold has been improved to 2.21% from 1.87%, and likewise the web income was HKD 252 million, rising by 45.9%.
Noninterest income accounting for 18.4%, on the same time, our fund enterprise moreover observed a substantial progress this 12 months. By the highest of the mid of this 12 months, we had in complete the reserve over stability of RMB 2.3 billion, rising by 23x moreover the useful on the U.S.
stock shopping for and promoting service, further enhancing the financial product metrics for serving the consumers. So whereas we’re rising our effectivity and likewise, you probably can see that our normal worth has significantly diminished throughout the first half of this 12 months, this decide was 119% in distinction with the equivalent interval, it was lowered by 80 proportion elements.
And likewise the monetary establishment loss, undoubtedly narrowed. Web loss was HKD 190 million, and now now we have been bettering by 71.7 proportion elements. So attempting ahead, we’re going to proceed to enhance our shopper experience and creating additional price for patrons’ future digital financial experience.
We’re going to enhance and assist the occasion of financial experience in Hong Kong, setting up a financial center with world financial have an effect on, promoting financial inclusion and likewise drive prime quality progress at ZA Monetary establishment, and we’re assured achieve profitability.
Now let’s invite Gaofeng to share with you the financial effectivity throughout the first half of the 12 months.
Li Gaofeng
All correct. Thanks very loads to administration in your analysis of the earlier.
And now I shall be accountable to introducing the financial effectivity and funding state of affairs. First half of the 12 months, ZhongAn achieved the financial service earnings of RMB 15.08 billion, a year-on-year enhance of 19% by ecosystem, nicely being ecosystem staying true to our mission of providing insurance coverage protection with the experience and carrying ahead. We proceed to complement our medical insurance coverage merchandise to cowl additional people and meet the purchasers’ needs.
We moreover launched a model new offering in our nicely being product matrix. And likewise, now now we have the RMB 4.876 billion reached by means of the insurance coverage protection service earnings year-on-year enhance of twenty-two.7%. Digital life ecosystem with the continued prosperity of the e-commerce commerce, and now now we have quick progress of our progressive merchandise identical to the pet insurance coverage protection, et cetera.
The insurance coverage protection service earnings was RMB 7.07 billion throughout the first half of the 12 months, a year-on-year enhance of 24.2%. Shopper finance ecosystem, principally the stress from the not sure macroeconomic setting and industrial challenges, we adopted a additional prudent working fashions and actively scale down the enterprise.
Inside the first half of the 12 months, our consumer finance cycle system insurance coverage protection service earnings was RMB 2.8 billion, and a year-on-year decrease of 1.7%. Automotive ecosystem, we consider underwriting in personal vehicle sector and likewise proceed to embrace the best way during which from new vitality automobile.
And in complete, the insurance coverage protection service earnings reached RMB 863 million year-on-year enhance of 24.2%. Inside the first half of the 12 months and the precise underwriting, normal combined ratio throughout the first half of 12 months was 97.9%, marking the fourth consecutive 12 months for underwriting profitability. Combined ratio was 60.7%, combined expense ratio, 37.2%.
The combined underwriting ratio elevated by 2.1 proportion elements in distinction with the equivalent interval remaining 12 months, and likewise with the expense ratio bettering by 1.5 proportion elements. Breaking down by ecosystem. The nicely being ecosystem, now now we have a combined ratio throughout the first half of the 12 months was 95.7%, up 3.2 proportion elements and likewise the overall loss ratio remained safe at 38.1%, whereas the combined expense ratio rose to by 3.1 proportion elements, and likewise primarily ensuing from elevated funding, back-end service infrastructure to spice up shopper experience for insurance coverage protection capabilities and claims.
Digital life ecosystem, the combined ratio remained safe at 99.9%, with normal effectivity consistent with remaining 12 months. The combined loss ratio was 71.7%, up 3.3 proportion elements from the equivalent interval remaining 12 months, whereas the combined expense ratio decreased by 3.2 proportion elements to twenty-eight.3%.
The change in worth building was primarily on account of changes in product metrics, and likewise coping with the macro monetary system and likewise the challenges, the customer finance ecosystem had the combined ratio of 99.1%, up 8.4 elements year-on-year. And on account of 13 proportion elements enhance in loss ratio to 73.8%.
Nonetheless, as a result of the second half of ultimate 12 months, now now we have actively scaled down the customer finance enterprise and tighten the possibility controls, and leading to an enchancment in loss ratio in distinction with the second half of ultimate 12 months. The usual of our on-line belongings and quite a few indicators have been bettering quarter-by-quarter. The expense ratio decreased by 4.6 proportion elements on account of lower consumer acquisition costs and now now we have centered additional on service present clients in step with the 12 months’s macroeconomic and industrial cycle.
This particular expense ratio was 25.3%. Automotive ecosystems combined ratio improved by 3.1 proportion elements to year-on-year to 94.2%. Combined loss ratio elevated by 7.6 proportion elements to 66.7% year-on-year, primarily on account of elevated journey throughout the first half of the 12 months, and likewise the overall type of combined expense ratio decreased by 10.7 proportion elements to 27.5%.
Moreover, on the funding aspect, we proceed to undertake the fixed income plus capital allocation method. All through the reporting interval, the general make investments methods of ZhongAn house insurance coverage protection funds amounted to roughly RMB 27.69 billion, of which fixed income investments totaled RMB 28.4 billion, accounting for 75.4%, primarily consisting the bonds and bond funds.
Benefited from the strong effectivity of house bond market throughout the first half of the 12 months, we achieved comparatively safe returns with the general funding income from house curiosity funds reaching RMB 620 million and likewise, we had annualized complete funding yield and internet funding yield by way of the reporting interval of three.3% and a pair of.3% roughly — respectively, remaining safe.
And likewise throughout the summary with the service earnings progress this 12 months, we’re attaining regular underwriting profitability to buy down positive exterior setting. It’s worth mentioning that every experience and likewise the banking ecosystem significantly diminished their losses throughout the first half of the 12 months.
Moreover they benefited from the continued digital transformation of the house and world financial industries, leading to a quick progress in experience output earnings with the elevated proportion of prototized earnings and the discharge the administration efficiencies. The utilized sciences part losses slim significantly.
Moreover ZA Monetary establishment’s curiosity incomes asset scale and internet curiosity margin develop drove quick internet income progress and improve the operational effectivity and the dimensions outcomes further optimized indicators, resembling ZA Monetary establishment’s worth to income ratio and displaying the moreover clear path to profitability for ZA Monetary establishment. The company’s capital stays at sufficient diploma, full solvency adequacy ratio of 24% as of June 30, 2024.
We need to thank consumers and analysts and the capital market for his or her assist and companionship alongside the best way during which. Making an attempt ahead and a flowery and ever-changing world monetary setting. We’re going to proceed to uphold the mission. And likewise, we’re going to refine our inside operations and keep shopper centric and specializing in in housing shopper experience for everyone.
Thanks. Now we’ll have the Q&A.
Question-and-Reply Session
Operator
[Operator Instructions] And now the first question is from Rick Zhao from Morgan Stanley.
Rick Zhao
All correct. thanks very loads for giving me the possibility. I’m analyst Zhao Rick from Morgan Stanley. I’ve two questions. The first one is on the funding aspect. We’ve now seen that throughout the first half of the 12 months, the overall type of earnings decreased just a bit bit. So what had been the reasons? And likewise, how that we’re going to face this particular type of setting. And likewise, we’re going to further allocate the sources and what’s the expectation?
The second question is that by means of the medical insurance coverage. So for instance, the earnings of the premium really decreased, nevertheless nonetheless the service earnings elevated. So what are the reasons of getting this particular type of a distinction? And likewise, may you help us to know an important breakdown by fully totally different insurance coverage protection varieties? Thanks very loads.
Jiang Xing
Thanks very loads for the question. Let me reply the question regarding the medical insurance coverage and Gaofeng will reply the rest. So throughout the medical insurance coverage sector this 12 months, now we have had the general premium exceeded trillion. So it’s really promising eventually. We’ll see additional product innovation alternate options.
Merely now throughout the enterprise analysis, I’ve already shared that for the strategy of development, we nonetheless are setting up throughout the month and likewise for medical insurance coverage, now now we have a variety of merchandise. The first one is represented by non-public clinic protection and 1,000,000 medical insurance coverage safety product.
That’s nonetheless our foremost merchandise and likewise all the best way during which so far, now we have been incorporating each form of numerous value-added suppliers, and likewise serving to to complement the necessary drug itemizing and to make sure that this larger product is unstable. And likewise by means of the networking hospitals, now now we have moreover had a breakthrough. Now in complete, we’re rising that from public choices to non-public hospitals as correctly.
And by means of inclusion — an inclusive finance, the Zhong Min Bao as a result of the product is unquestionably positioned as a result of the million-claim medical insurance coverage to the mass public, so we’re overlaying the three varieties of people that may not be coated by reimbursement, the great earlier and likewise the quant illness victims.
The victims with preexisting conditions. So this delivered the product, lowered down the sting of underwriting and enhance the upper limit on the age and no nicely being announcement and likewise a variety of the occupational limits. So that’s additional inclusive and likewise additional related. Moreover, now now we have been together with a variety of the nonstandardized service identical to the nicely being checkups and small drug subject, et cetera.
So whereas we’re upgrading this, the general written premium elevated a lot. So we hope that Zhong Min Bao goes to change into the next breakthrough edge. And likewise, we’re talking regarding the outpatient and repair supplier medical insurance coverage safety and likewise a variety of the short-term pet proprietor’s insurance coverage protection. The precise contribution has been rising as now now we have already talked about that we had a very massive potential on this house. And remaining, not least, I need to say that originally, we had been creating a variety of the value for money medical insurance coverage merchandise.
Nevertheless now we’re specializing in medium to high-end healthful insurance coverage protection sector. Leveraging the Net channel, we’re selling the insurance coverage protection insurance coverage insurance policies to those affluent clients. So for instance, the child mannequin of medium to high-end nicely being entrants that now now we have promoted and overlaying a variety of ache elements of the mom and father and overlaying additional conditions. As an illustration, the type of need of getting outpatient therapies by lots of the children. And likewise eventually, we’ll cowl additional group of inhabitants.
And Gaofeng, please reply the question regarding the funding.
Li Gaofeng
Thanks very loads. So I consider that in complete, now now we have a wonderful affiliation of the investments. Common speaking, by means of the funding, it’s nearly primarily based totally on the fixed income belongings. By end of June, the overall type of asset of the funding is 37.7 billion, 75% of fixed income funding, the flat versus remaining 12 months. 55% of our bonds and bond funds, this was moreover flat versus remaining 12 months.
I’m on the bonds that we invested 99.2% of them are having the rating of AA and with the lower charges of curiosity on the subject of fixed income asset, we’re going to drastically regulate the interval and likewise enhancing our yield. Moreover, now now we have centered a lot on the changes by the highest of June, we had 6.4% of our funding of shares vitality funds.
And likewise, in complete, we do have a variety of the adjustment of our allocation and the portfolio strategies. And likewise, we’re going to enhance and enhance the overall yield and try and reduce the volatility. So the wonderful funding yield will be elevated.
Eventually, whereas we’re controlling the positive scale, we’re going to moreover focus additional on the allocation to those segments with a greater dividend and likewise to be in step with the long-term monetary development mindset of Chinese language language authorities.
Rick Zhao
Thanks.
Jiang Xing
Thanks very loads. Let’s have the next question.
Operator
Subsequent question comes from Mao Qingqing from CICC, please.
Qingqing Mao
Thanks for this opportunity. I’m Mao Qingqing from CICC. I’ve two questions. The first one is expounded to the growth various of insurance coverage protection merchandise. So how can we really define the long term progress alternate options other than million healthcare. And likewise the refund insurance coverage protection, what are the alternative potential areas that we’ll see the growth?
And my second question is regarding the credit score rating insurance coverage protection. So now now we have been examined many situations of the trustability of credit score rating insurance coverage protection, nevertheless nonetheless, the setting is type of hectic within the course of this enterprise. So how do you plan the credit score rating insurance coverage protection to have the ability to protect the profitability, and whether or not or not you might be assured in sustaining the profitability?
Li Gaofeng
All correct. Thanks very loads, Mao Qingqing in your questions. Let me reply the first question. In ZhongAn, we on a regular basis raised the concept of progress by prime quality. So to have the ability to understand whether or not or not that’s rising or not, now now we have three elements.
The first one is that whether or not or not the long term market scale is enough, and potential is enough. And second, we’ll ponder that whether or not or not there are a selection of the untapping demand of customers and likewise, we are going to fulfill the mission of providing the insurance coverage protection product with a warming and caring arms.
And lastly, we’ll ponder the usual of the long-term enterprise development. And easily now you had been talking about a variety of specialty insurance coverage protection merchandise that now now we have developed, and so they’re in step with these three elements, as I mentioned. For these a variety of the enterprise segments that I already talked to you about and eventually, we’ll consider initially, the auto insurance coverage protection.
The complete premium progress was nearly elevated than the industrial frequent and the profitability ratio was moreover rising. And likewise in Chinese language language PMC, the auto insurance coverage protection is an important one, and penetration, in spite of everything, of the incident auto insurance coverage protection is type of low. So for ZhongAn, the auto insurance coverage protection complete premium scale was rising very fast. Nevertheless nonetheless, we’re — our market share stays to be pretty low.
So this 12 months, on the service aspect, now now we have been doing a variety of the extreme techs and making an attempt to differentiate ourselves from — for instance, by the highest of July, we had been creating the video-based declare service and have just a bit little little bit of breakthrough.
On the current stage, we can have spherical 50% of the claims which will be down over line or on the highway. And looking eventually, we’ll seize the possibility of blending Net experience with auto insurance coverage protection and hopefully, that the general premium will be further elevated. And the second various is the digital lifestyle ecosystem.
And on excessive of the e-commerce and journey enterprise, now now we have been rising the progressive merchandise to totally different areas identical to the pet insurance coverage protection. And now now we have more and more progressive merchandise, taking the pet insurance coverage protection as occasion.
We’ve now upgraded the basic protection-based exponential insurance coverage protection and likewise emphasizing on essential illness insurance coverage protection for pets. It’s a very quick mitigation of the missing demand. And likewise this 12 months, we hope, and now now we have been hoped that by leveraging our private experience profit, we’re ready to, for instance, do additional enhancements as a result of a larger pricing and likewise increased design of the merchandise. And spherical your entire China, now we have had almost 100 million pets and pet householders, nevertheless now the penetration stays to be pretty low. Remaining not least, we’re talking regarding the nicely being ecosystem.
As an illustration, as anybody is conscious of regarding the non-public clinic protection and million healthcare protection spherical this particular house, we do additional enhancements throughout the service provision and likewise the stratification of the affected individual or the consumer clusters. And now we have been promoting the merchandise like Zhong Min Bao and likewise a variety of the totally different merchandise identical to the outpatient, the service supplier insurance coverage protection and the pet proprietor’s insurance coverage protection et cetera, which now now we have merely to share the colors upon. Thanks for this question. And now Jiang Xing, you probably can reply the question referring to the customer finance.
Jiang Xing
Correct. Thanks very loads in your question. considering the stress of the macro setting and the adjustment of this insurance coverage insurance policies commerce and from remaining 12 months onwards, now now we have been shrinking this complete premium on this house of credit score rating insurance coverage protection. After which I see that by means of this particular underwriting stability and likewise the general underwriting scale. These two had been lowering significantly from the disclosed data, you probably can see that with such an enormous stress from the floor.
Inside the first half of the 12 months, we had been worthwhile on the ecosystem of consumer finance. So frequently, since on a regular basis, we had been pretty cautious in fascinated about our mindset and combined with the possibility administration model that’s empowered by the experience. This 12 months, we focus additional on the underwriting renewal combined with fully totally different platforms with the purchasers.
So that you probably can see that the combined ratio of the first half of this 12 months was rising versus comparable interval remaining 12 months, in case you might be evaluating with the second half of ultimate 12 months was bettering. So normal speaking, the — throughout the second quarter of the first half, moreover, we had a wonderful quarter-by-quarter enchancment.
And likewise on the same time, we’re optimizing all the parameters of the purchasers. So throughout the second half of the 12 months, we’ll protect as prudent angle and likewise proceed current the service to those absent prospects that now now we have already coated and likewise protect a very stringent menace administration regular.
Qingqing Mao
All correct. Nearly for my reply. Thanks.
Operator
Thanks for the question. And now let’s have Michael Li from Monetary establishment of America Securities. Sorry, the voice is type of low.
Michael Li
So throughout the first half of the 12 months, we had a wonderful growth. So now now now we have throughout the cycle of curiosity lowering. So on this larger cycle, considered one of many strategies was to cope with this cycle? What’s the expectation? Second question is regarding the Know-how part. We had a wonderful progress. So can you focus on to us about this additional? What’s the plan eventually?
Wayne Xu
All correct. Thanks very loads, Michael, for this question. It’s a excellent question. So let me repeat your question. So that you just requested that for the curiosity lowering, what’s the have an effect on to ZhongAn, ZV Monetary establishment and whether or not or not that’s an impactful, correct?
So to be honest with you, that’s nearly impactful. And likewise for numerous enterprise segments, now now we have a novel have an effect on. And likewise the overall type of have an effect on will be fully totally different. And — nevertheless for ZV Monetary establishment, that’s nearly vigorous. So initially, by means of the web unfold, which works to be further squeezed.
So evaluating with the traditional commerce on the current stage, now now we have a low proportion of CASA in the direction of the deposit. So normal speaking, we’re going to have a loads quicker capital worth low cost than the traditional banks. And likewise on the asset aspect, we’ll see additional demand of getting loans and likewise, we’ll ship additional earnings.
On the monetary establishment aspect, the bond held can enhance moreover its worth and enhance throughout the funding yield. Moreover for the non-net curiosity income, the shares and equity that now now we have invested are going to be positively impacted as a result of a additional vigorous capital market. So these are all one factor that now now we have observed. Second question is regarding the experience export. And now let’s give the bottom to Wang Min to answer this question.
Wang Min
All correct. Thanks very loads, Michael, in your question. So initially, the experience part elevated shortly throughout the first half of the 12 months. And likewise, we had moreover a additional sturdy progress for the house experience export enterprise, benefiting by the additional insurance coverage insurance policies to benefiting the Digital China and likewise establishment of digitized monetary system.
We’ve now a very massive confidence over the long-term progress of the experience export enterprise, so I really understand that you just simply pay just a bit consideration to experience part, not solely progress, however as well as, you might be anticipating to see the event of profitability.
Inside the first half of the 12 months, be it the experience export in China and likewise overseas, now we have been shortening the losses a lot. So on one hand, we’re rising the share contributed by the extreme gross margin merchandise.
And likewise, as for AIGC and totally different new utilized sciences, we’re actively making use of them, serving to us to actually enhance the effectivity by means of product R&D. And naturally, that we’re enhancing our inside administration performance and effectivity and reduce down the related price due to this. So whereas we’re rising our earnings scale, it’s serving to us to deal with our worth very effectively and thus, bettering our profitability further. Thanks.
Operator
Thanks very loads. Now let’s have the last word question. [indiscernible]?
Unidentified Analyst
I’m [Alice] from Citi Securities. Thanks very loads. I’ve two questions. The first one is that we are going to see that the general premium progress was slowed down throughout the first half of the 12 months, what had been the reasons? What regarding the steering. And likewise what’s the like placement method on the channels? And the second is regarding the U.S. bonds. And we don’t neglect that we’ll do the U. S. debt and the best way that you’ll pay that debt?
Wayne Xu
All correct. Thanks very loads for the question. So that you probably can see that the slowdown of the growth of the general premium throughout the first half of the 12 months. And the first function was that the customer finance enterprise was shrinking actively primarily based totally on the macro and exterior setting. And likewise, we had a strategic adjustment of the buyer acquisition on the medical insurance coverage house.
We have to get acquired the model new prospects in a additional economical technique. So primarily based totally on these two causes, the overall gross written premium decreased, or progress price decreased. Nevertheless ready for the second half and likewise the long term, we’ll nonetheless be user-centric and focus on the elevation of the buyer experience. Hopefully, that we’ll have a sustainable development. And Gaofeng, please reply the question regarding the financing and likewise the dollar bond.
Li Gaofeng
All correct. Thanks for this question. In 2020, now now we have issued USD 1 billion of high-level debt bond in overseas and in 2022, we repurchased USD 49.9 million of the bond in complete. And likewise by means of the interval, now now we have USD 590 million bond goes to be due subsequent 12 months, July, and $360 million bond will be due by March of 2026. At current stage, our cash transfer is type of safe.
Solvency ratio pretty sufficient, and we’re actively very for the payback, and naturally, considering the outside setting, we’re moreover going to moreover take into accounts the potential for doing financing — refinancing.
Operator
All correct. Thanks very loads. Attributable to time limit, now now we have to complete this conference title. Thanks very loads in your participation and assist to ZhongAn On-line. Thanks, and also you may disconnect now.
