FANH - Earnings call transcript Q2 2021

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Operator

Thank you for standing by for Fanhua’s First [sic] [Second] Quarter and First-Half 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent background noise. After the management’s prepared remarks, there will be a question-and-answer session. [Operator Instructions] For your information, this conference call is now being broadcasted live over the Internet. available hours be is the will finished. replay within after three conference Webcast IR under at Webcasts visit website Please Fanhua’s ir.fanhuaholdings.com section. the & Events Today’s recorded. being conference is

If Investor to your at for today’s may like objections, Oasis turn host you Qiu, Ms. I Fanhua’s to over time. Manager. would disconnect meeting the conference, have any Relations this you

Oasis Qiu

our results morning, IR are earnings conference XXXX and and quarter first-half and as well good Good as today The website evening. were earnings on second available earlier Welcome on to our released call. Newswire.

statements a that our discussion accuracy to Before The under we as number Such materially the of to cause that outlined anticipated. applicable of this in Litigation note Harbor results our could not except continue, Securities obligation forward-looking and XX-F. to actual the undertake risks law. update any our by XXXX. of under and including of statement Safe business those please or risks with these today Reform limited from include, but We do the will U.S. those registration Act Private statements information contain forward-looking differ may uncertainties the filings not required on provisions Form impacted made projected uncertainties SEC, be

remarks. Secretary, There Joining and Board and after will quarter financial Chunlin Lily our of in our Lee. Wang; provide XXXX. us prepared Chairman Wang review Peng Chief highlights Q&A Mr. of and today Mr. be are the session the Chief Mr. first-half Board, Executive and Officer the Ge, Financial a operational Officer, a second will

Mr. Wang. over Now I to will turn call the

Chunlin Wang

trends. participating the first On about I’ll morning, our views good part, for market in conference today's call. Thank this Good and evening. talk on you

and Many and challenges believers far Firstly, consumer families. indirectly the China’s insurance still business that so, foundation the run, life distribution immune. waiting resurgence have professional directly and opportunities activities, for increase. the professional the COVID-XX industry. the economy growth there industry of been professional or development and we market lay as progress believe insurance huge is still middle and It have confidence purchasing The up room industry hurting class that potential. both past to is in inevitable insurance that an insurance force industries Even irreversible was development. of was certainly in enjoy only important impacted reaching impact made future explored in continue will long and not the And power COVID-XX China’s had of tremendous intermediaries intermediary speed the is the to that the co-exist. on in the some insurance market expected share We intermediary be to insurance of to

stage. Thirdly, in slow next health insurance is saturated to the expected and down is market growth getting

insights middle stay families market high-quality However, to according individual and The digitalization, and committed of to provide with grow, an expected opens platform customer their a digital we forward strategy. demand build customized the prepare needs, such of demand to customers market. aging open from Fourthly, Chinese meeting pushing Hence, to of and ocean our commercial will customer for population, to prolonging changes. strategy professionalization, intelligence we believe continue with pension opportunities long-term force, to products us lifecycle. a our the firmly variety is to well through class new emerging thus, seize will up insurance and the huge sales blue and is gain a cultivating key thus, annuity

gross representing GWP, RMBX.X of by industry XXXX. quarter decline return industry billion the far operating quarter will XXXX. expectation the reviewed part, of life so and in witnessed sharp XX.X% XXXX. On financial first-half in a positive quarter second second results our total second year-over-year income give premiums the Against reaching the of insurance X.X% a I second been record than million Life a to managed RMBXX in of of higher has growth the insurance worth with total in

made growth income, and meeting the the was XXXX, professionalization, encouraging year-over-year part the Fanhua target X.X% open industry of we up nearly in life to total only first-half to our billion platform of And insurance GWP in two-thirds of for strategy. by share year-over-year strategy digitalization was the in and in made in that insurance registers life in compared operating RMBXXX.X third XX.X% our million As And premiums, XXXX. progress have progress. RMBX.X

XX branches, tax we and proved XXX in been establishment are have advisors rounds assessments. the nine which Yuntong for Firstly, the preparatory multiple vigorous stage Over have Yuntong recruited in professionalization, among of of after of terms opening.

empowering out The Province Secondly, quarter a X,XXX tools and major sales WeCom, solid operations X,XXX of in registering helped XX,XXX value Platform, more second have digitalized of team digital WeCom. foundation we data-driven based over our client clients since Rons, clients, on originators, new and digitalization, in rolled a Rons teams than digitalized connecting operations. Guanjia. for as key to our and digital in using Management terms basis insights applied i.e. Hebei installing laying is Digital operations. through engage management helping XXXX, digital pilot better and further efficiently, Digital these connected more agents and agents mobilize managing of Asset on three to tools and asset team existing about the We tools in Platform Operating leaders These digital May, force clients and significantly and tools our with with

but out digitize a sales is we on and implemented a basis, outlook the plan expand wider their chat and of the the manner. in as teams, Hebei a force team to new to team and among business engage digital offline base manage professional model our by online entrepreneurial in our third group development tools operation, sales fourth WeCom During better our more XXXX. quarter assist clients frontline efficiently part empowering second-half so professionally, to to our our for their operation activities zone, empowerment, leaders i.e. roll to The while agents with through to experience digital pilot our about

Sales We expect of be quarter-over-quarter meantime, increased our to quarter plan our on our ramp basis, implementing the our for plan will to less to promotion expected million, million less million for of income and we sales last XXXX than business spending the of while XXXX. exceed for XXXX. quarter up no for on a and and than to of grow initiatives. Operating targets quarter with spare year the in interim the no Jumpstart is for XXXX, the expected achieve RMBXXX operating second RMBXX efforts RMBXXX up for to second-half sales third gear Campaign no income the dividend XXXX. Fifthly, In digitalization new full

Our quarter XXXX XXXX record to $X.XX XXXX. shareholders X, quarterly Thank September XX, of of The second the dividend ADS. is dividend is September around per on payable you. or for on

for Now will questions. the floor open your

Operator

[Operator Instructions] from comes of ask [ph] Morgan question Please question. first Your from Allen Stanley. the your line Feng

Allen Feng

Good just questions. have quick two I morning, management.

the critical well what this quarter of of the quickly as is on impact comment savings products called secondly, in products, offline as you Thank third year? trend the sales And First, so on -- insurance of illness could you. double new practice sales? type just the since recording

Chunlin Wang

sectors also to we that and may past, sales a part the this impacts. in there intermediaries In higher mostly adverse reduce a malicious thirdly, some will whole. in requirement believe will help insurance believe then of the life a larger have this as And to regularize from We than from standardize it on pose their the help wise, Fanhua’s but short-term a cancellation, perspective, double is the regulations. adverse We and as sales and policy industry, long-term basis. quality will the agent a will be perspective, of for as regulation pyramid Firstly be And standardize new are believe improve capability. impact, agents we positive reduce time strong for operations, already companies, to more are the these the the welcome actually operation recording this organized that secondly, operations help to organizations much working insurance requirement lot insurance standardized those that misrepresentation. who professional benefits sales a the structure, to sales it professional and intermediary have

So, strong abilities have skills. the them of a sales in lot not

illness, as a critical And insurance to easy high the relatively result, in is which became So sell rate critical intermediaries. for professional the illness China. of products been penetration major quite has products

And broader development will who be will family the we for based such believe sales families middle demand So, XXX services critical therefore, the come be from the And solution. customized but individual market we a offer market, or limited. more to also quite the room the for assets demand expect opens demand ocean or diversified that the products that illness further new needs. for class the agents, from will professional million location blue such able clients on products require up will

in to one. whole So, is product and life And our a Therefore, planned. will market number innovation be which of we're will be launch sure launch we're September, that our August customization, conference products to customized the market and a products in already therefore the product in product the middle major Thank or established you. to insurance customization will allocation sales. in will XXX which those our focus customer and reinsurance our product, demands and going to our be officially will On product reinsurance majority future pursue for with make to work this going [indiscernible] a insurance cooperation that these new companies so host six future the and XX, agreements a meet families of companies, actively design to companies with September. customers. for account major class customize customer as products propositions this and million we We customized future,

Operator

comes of question. [ph]. your question line Fin from next Please Your Fi Wang ask the

Unidentified Analyst

questions my in repeat I’ll English. Okay.

two questions. my are Here

life The the question or And our about say which customers? the people change group are first previous the critical proportion insurance? current year? with What provinces one mix is of targets annuity of main and original is is product compared the product and our any Thanks. illness our next are there targeted strategy, is cities mix. And about which

Chunlin Wang

XX-year illness XX% life annuity X%, respectively to XX-year XX% in XX% same critical and last as by and and compared whole X%, compared XX%, And respectively, year. life whole represented APE, and insurance, insurance, By and XX% XX%, critical XX%. respectively, represented to XX%, and annuity X%, illness period premium, the XX%,

of there this Our that critical illness our product, quite significantly, I dropped factors. total percentage believe was major two mix as

are with first one. we critical the the illness believe good the definition one, transition after old old that as in new the products Firstly, and illness critical quarter, as between there not the is transition the

product illness And high has reached has is critical already demand the illness believe market I that after So weakened there for therefore, the transaction. critical significant a by then level. consensus secondly,

So the savings market products. for will future be the major

we also critical course, So that product But will savings growth to products it the to believe the time take explosive illness of Thank will achieve growth. down, savings will continue you. for grow. while slow

Operator

conference at continue. are Please presenters. There questions I further to this would back no to today's like hand time. the

Chunlin Wang

haven't question we covered on. operator, second Hi, the Hold yet.

Operator

Okay, sure.

Chunlin Wang

Those this And are as we urban million urbanization, strategy therefore, of strategies us the XXX for be our strategies. professionalization been families middle implement sales markets major and the to live it mentioned, always major we implement areas, to in focused. class have going leads digitalization the will and And our cities. force

strategic We priorities. have two

join more development elite empowerments. We we second And that by the sales priority our digital Firstly sales is our plans. entrepreneurial sales is and Yuntong to attract of can teams, hope agents the more backed force.

be just this mentioned of cities. provincial we Yuntong a Shenzhen we in expect branches, year. These Beijing, XX located Yuntong as XX first as and well and end will capital tier now mainly have have Yuntong by cities, branches Shanghai, including As branches we the to Guangzhou,

good Thank we far, So have you. progress. made

Operator

like this no now time. presenters, hand to back conference today's the to there please at continue. Yes, are questions further would I

Chunlin Wang

Thank you for call. participating conference today's in

feel call? you further have any Hello, you this please If conclude to contact you. free questions, can us. Thank

Operator

you for participating. today’s Thank this call. Yes, concludes conference

You disconnect. may now

AIX (AIFU) 24 Aug 212021 Q2 Earnings call transcript