Swiss Re-backed technology platform Waterdrop has reported that its net operating revenue in Q1 2022 rose 7.4%, compared to Q4 2021.
The firm said in a press statement that it had resumed positive growth after its business strategy was switched from pursuing fast growth to enhancing quality development and profitability. It also reported a steady growth in the number of insurance customers: The number of cumulative insurance customers reached 111.1m and cumulative paying insurance customers reached 28.8m as of March 31, 2022.
Peng Shen, founder, chairman, and CEO of Waterdrop, said: “2022 marks the sixth anniversary of Waterdrop, and we are embracing a new beginning. For the first quarter of 2022, I am pleased to report we achieved a US GAAP net profit for the first time in our operating history after turning profitable on a non-GAAP basis in the prior quarter. We managed to further reduce sales and marketing expenses and operating costs. Our operating performance and business trends over the past two quarters also increased our confidence in being able to keep the momentum and achieve the overall profitability goal we set for the full year.”
He added: “For our insurance business, the first quarter of 2022 was the second full quarter after upgrading our business model, and we have already significantly improved our operational efficiencies. We systematically optimized the operating model of ‘multi-platform, multi-supply and multi-service mode’. We leveraged innovative operational scenarios to effectively increase engagement with users, and further increased the repurchase rate and renewal rate to over 70% and 90%, respectively.”
The firm said that it expected to achieve overall profitability on a non-GAAP basis for 2022 under the circumstances that it keeps investing in established businesses and new initiatives. It also said that it expected the net operating revenue growth to continue quarter over quarter in the second quarter of 2022.
Waterdrop was one of Swiss Re’s large investments back in 2020, when the reinsurance giant, alongside Tencent Holdings, led a $230m funding round for the firm. It was understood at the time that Swiss Re had invested $100m of the total.
Known in China as Shuidihuzhu, Waterdrop was established in 2016 and distributes insurance solutions online via Waterdrop Insurance Mall, offers illness crowd-funding through its Waterdrop Crowdfunding platform, and also operates mutual funds.
