China’s largest reinsurance company, China Re, has reported an 8% year-on-year rise in net profit to RMB 6,390 million (USD 970mn) for the full-year 2021, as gross written premiums (GWP) jumped by almost 1%.
For 2021, net profit attributable to equity shareholders of the company totalled RMB 6,363 million (USD 966mn), representing year-on-year growth of more than 11% for the reinsurer.
GWP reached an impressive RMB 162,732 million (USD 24bn). During the year, the company’s business structure was further optimised, with domestic emerging business of P&C reinsurance accounting for 7.8% of profits, representing a year-on-year increase of 0.9 percentage points.
At the same time, overseas business of P&C reinsurance accounted for 32.4%, representing a year-on-year increase of 1.5 percentage points; domestic protection-type business of life and health reinsurance 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 accounted for 48.0%, representing a year-on-year increase of 4.5 percentage points.
Within P&C, GWP increased by 7% year-on-year, as the segment’s profit increased by 48% to RMB 2,669 million (USD 405mn). However, the P&C combined ratio weakened by 2.72 percentage points to 99.39%, with a slightly higher 65.68% loss ratio, and a lower expense ratio of 33.71%.
China Re attributes the decrease in the combined ratio to the significantly improved underwriting performance of overseas business as a result of the high combined ratio of overseas business in the same period last year as affected by the pandemic, and optimised business structure and controlled business risks as the company seized the opportunity of rising rates in overseas markets.
Yuan Linjiang, China Re’s Chairman, commented: “Looking ahead, with the opportunities and challenges, China’s macro-economic foundation is solid and positive, however, China falls far behind global average in terms of insurance density and depth, and the coverage of insurance products has yet to keep up with the actual needs of people. More stringent regulations create a favourable environment, that the insurance industry has entered a new development stage of supply optimisation, orderly competition and standardised operation.
“The functional positioning of insurance companies has changed from a pure risk-taker to a comprehensive risk manager, reshaping the trading model in a customer-oriented manner, supporting competitiveness with ecosystem construction, and seizing the blue ocean market with technological empowerment. At the same time, risks and challenges are increasing. The complex and severe global environment and the accelerating evolution of tremendous changes, coupled with the recurring COVID-19 pandemic, the volatile capital market and extreme climate changes causing frequent catastrophes, all these factors have led to a slowdown in premium growth and weakened profitability, posing great pressure on the transformation of China’s insurance industry.”
“In conclusion, in 2022, China Re Group will strictly follow the general principle of “seeking progress while maintaining stability, enhancing value”, implement the operational approach of “stabilising growth, adjusting structure, controlling risks, improving efficiency”, and secure the fundamentals with new momentum for active adaptation to industry transformation while expediting the high-quality development of the Company in order to generate sustainable and stable investment returns for shareholders,” he added.