china taiping insurance holdings company limited 2017 ......holdings company limited 2017 interim...

China Taiping Insurance

Holdings Company Limited

2017 Interim Results Presentation

24 August, 2017

2

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

Forward-looking Statements

3

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 2017.

Simplified Company Structure

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

4 * Calculated in accordance with the C-ROSS

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 industry-leading; 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

5 Note: All data related in this page is stated in RMB, if not specified


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

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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

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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

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HK$ million 1H2017 1H2016 Change

Life insurance 1,673.99 3,328.42 -49.7%

Pension and group life insurance 60.87 22.35 +1.7 times

PRC property and casualty insurance 202.11 345.77 -41.5%

Overseas property and casualty insurance

242.92 241.54 +0.6%

Reinsurance 478.00 203.80 +1.3 times

Asset management business 249.68 132.09 +89.0%

Others* 190.86 (225.00) N/A

Net profit from operations 3,098.43 4,048.97 -23.5%

Non-controlling interests (728.05) (949.66) -23.3%

Net profit attributable to the owners 2,370.38 3,099.31 -23.5%

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Net Profit by Business Segment

* Others mainly include the operating results of the holding company, TPeC, TPIH (HK), TPFH and consolidation adjustments

• TPL

• TPL (HK)

Life Insurance Business Review

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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.

Life insurance: Premiums Maintained Steady Growth, with

Sufficient Solvency

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Direct Premiums Written

（ HK$ million）

Comprehensive Solvency Ratio

89,267

72,345

1H2017 1H2016

+23.4%* 244%

251%

At 30 Jun 2017 At 31 Dec 2016

C-Ross C-Ross

* 29.8% growth in terms of RMB over the last period

Further Increase in Proportion of Individual Business

Life Insurance: Structure of Gross Premiums – By Distribution

Channels

12

1H2016 1H2017

1,290 1,358

33,988 32,371

37,067 55,538

（HK$ million，%）

Individual

Group and other channels*

Bancassurance

1H2016 1H2017

51%

47%

2%

62%

36%

2%

* Other channels is mainly telemarketing

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Life Insurance: Persistency Ratios Stood at the Forefront of the

Industry

93%

95% 97%

88% 89%

92%

2015年末 2016年末 2017年5月末

第13个月之保费继续率


At 31 Dec 2015 At 31 Dec 2016 At 30 Jun 2017

92% 94%

96%

87%

89% 91%

2015年末 2016年末 2017年5月末



At 31 Dec 2015 At 31 Dec 2016 At 30 Jun 2017

Individual Bancassurance

Persistency ratio – 13th month




Note: According to communications with peers, TPL was No.1 in both Individual and Bancassurance Channels in terms of 13th month persistency ratio

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Embedded Value

104,598

92,049

At 30 Jun 2017 C-Ross

At 31 Dec 2016 C-Ross

+13.6%

（HK$ million）

47,919

44,130

60,848

43,750

+27.0%

偿二代

Life Insurance: Growth of In-Force Business Promoted Growth of

Embedded Value

Adjusted Net

Worth

In-force Business

Value

4,965

8,115

15

Life Insurance: New Business Value Grew Substantially

1H2016* 1H2017

New Business Value

（HK$ million）

C-Ross C-Ross

+63.4%

* the assumption and methodology used in calculating NBV for 1H2016 is the same as 1H2017, and similarly hereinafter, if not specified

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NBV Margin

Life Insurance: NBV Margin Kept Improving

C-Ross C-Ross

1H2016* 1H2017

23.0%

27.7%

+4.7pp

Note: NBV Margin=NBV/First Year Annualised Premium; First Year Annualised Premium=First Year Regular Premium + Single Premium/10, and similarly hereinafter

22,414

16,873

1H2017 1H2016

+32.8%

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First Year Premium

Individual Channel: First Year Premium Realised Substantial Growth;

Business Structure Further Improved

First Year Regular Premium Structure

（%）

1H2016 1H2017

3.2%

26.8%

0.1%

4.1%

29.4%

66.4%

0.1%

69.9%

+2.6pp

（HK$ Million）

Short term savings

Others

Long term savings

Long term protection

Individual Channel: Individual New Business Premium for Health Insurance

Grew Substantially and its Proportion Increased significantly

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Individual New Business Health Insurance Premium

（HK$ Million）

Others

Health Insurance

Individual New Business Structure

（%）

1H2016 1H2017

1,862

4,186

+124.8%

1H2016 1H2017

89.4%

10.6%

81.4%

18.6% +8.0pp

Year Distribution of Critical Illness In-force Business

Insurers’ Age Distribution of Critical Illness In-force Business

Individual Channel: Critical Illness Insurance New Business Grew Rapidly; Actual

Experience and Pricing Assumption for Insurers’ Age Closely Matched

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38.4% 48.2%

30.4%

23.2%

18.9%

19.3%

11.7% 11.1%

9.9%

8.8% 5.7%

8.7%

17.9% 16.1%

31.7%

Coverage Premium Policy

Year 1 Year 2 Year 3 Year 4 Year 5 and above

33.8%

17.0% 29.3%

9.6%

6.4%

8.5%

16.9%

15.1%

16.9%

24.5%

30.0%

25.2%

12.7%

24.0%

16.3%

2.5% 7.5% 3.7%

Coverage Premium Policy

Age 0-9 Age 10-19 Age 20-29

Age 30-39 Age 40-49 Age 50 and above

Note: 1. based on all in-force critical illness insurance policies as of June 30, 2017 2. Figures may not match totals due to rounding

Individual Channel: Agency Force Realised Rapid Growth; High

Productivity Agents Grew Substantially

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Number of Agents Number of High

Productivity Agents* （person）（person）

* High productivity agent refers to agent with RMB300,000 FYP and above

390,668

261,922

At 30 Jun 2017 At 31 Dec 2016

+49.2% 10,985

7,904

+39.0%

At 30 Jun 2016 At 30 Jun 2017

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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)

10 Thousand Agents

20.7 20

23.4 22.721.5

23 22.824.2 24.5 25.2 25.4 25.4 26.1

30.632.1 33

36.638.1

15

20

25

30

35

40

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun2016 2017

Individual Channel: Agency Force Trend and Development

Note：Data from this page to page24 is from traditional individual channel and does not include the Sinopec gas station project

2016 1H2016 1H2017

Group 32,489 29,570 43,388

Agency Force per Group 8.0 8.2 9.0

Department 5,892 5,356 6,845

Agency Force per Department 44.2 45.1 57.1

Agency Force per Group, Agency Force per Department

Retention Rate

22

2016 1H2016 1H2017

6th Month Retention Rate 75.1% 74.2% 82.0%



Individual Channel: Key Agent and Performance Indicators

Key Performance Indicators

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2016 1H2016 1H2017

Policy Per Month Per Capita 1.09 1.28 1.31

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*0.1” 3. 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

Individual Channel: Key Agent and Performance Indicators (Cont’d)

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Start Working High

Productivity Agents*

Percentage Comparison with 1H2016

Note

Number Percentage

1H2017 17,645 24% 22,324 35% Recruited in 2017

2016 25,300 35% 20,621 32% Recruited in 2015

2015 11,326 15% 6,114 10% Recruited in 2014

and 2013

Before 2015 19,050 26% 14,884 23% Recruited 2 years

before

Total 73,321 63,943

* High productivity agents refer to the agents with monthly regular premium of RMB 10,000

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%

Individual Channel: Key Agent and Performance Indicators (Cont’d)

25

Individual NBV Margin

C-Ross C-Ross

Individual Channel: NBV Margin Kept Growing Steadily

1H2016* 1H2017

30.7%

34.6%

+3.9pp

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（%）

First Year Regular Premium

（HK$ million）

Premium Structure

First year regular premium

Renewal regular premium

Single premium

4,377

2,727

1H2017 1H2016

+60.5%

1H2016 1H2017

63.1%

28.9%

8.0%

52.1%

34.4%

13.5%

Bancassurance Channel: First Year Regular Premium Grew substantially;

Business Structure Kept Improving

(HK$ million) 1H2016 1H2017 YoY Growth Percentage

Single Premium 21,440 16,864 -21.3% 52.1%

Regular Premium 12,549 15,507 23.6% 47.9%

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

27 Note: Premiums are accounting data; regular premium = first year regular premium + renewal premium

Bancassurance Channel: Took Initiative to Adjust Business Structure by Reducing

Single Premium and Increasing Regular Premium Business

We had positive growth in regular business among the five major banks YoY, with the channel development trend improving

28

Bancassurance Channel: Channel Structure Improved

38.8

28.0

18.9

15.3 13.3

10%

19%

8%

41%

67%

0%

10%

20%

30%

40%

50%

60%

70%

0

10

20

30

40

50

ICBC CCB ABC BOC BOCOM

1H2016 1H2017 YoY Growth（HK$ 100 million）

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

（HK$ 100 million）

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

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%

Long-term Protection Products FYP （1H2016 vs 1H2017）

29

47.01

67.99

1H2016 1H2017

+44.6%

27.27

43.77

1H2016 1H2017

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）

（HK$ 100 million）

Bancassurance Regular Products Structure

（1H2017） 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 10-14 years products accounted for 63.5%

30

+60.5%

63.5%

34.9%

1.6%

10-14 years 5-9 years Others

Product: Focus on Customers’ Protection Needs and Support Collaborative

Growth of Business Scale and Value to Achieve Breakthrough Growth for Core

Value Business

Bancassurance Product

Individual Product

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

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 long-term protection products throughout the year, build worry-free series products, and help achieve agency force target

31

• TPI

Mainland P&C Insurance Business Review

32

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

Direct Premiums Written

（HK$ million）

Comprehensive Solvency Ratio

Mainland P&C Insurance: Premium Growth was Higher than

Industry Average; Solvency Remained Stable

33

12,082

10,820

1H2017 1H2016

+11.7%*

216%

At 30 Jun 2017

206%

At 31 Dec 2016

* 17.5% growth in terms of RMB over the last period

C-Ross C-Ross

99.8% 99.8% 99.8% 99.8%

98.8%

At 31 Dec

2013

At 31 Dec

2014

At 31 Dec

2015

At 31 Dec

2016

At 30 Jun

2017

Combined Ratio Trend of Combined Ratio

34

50.4% 48.9%

49.2% 49.9%

2016年6月底 2017年6月底

费用率赔付率

98.8% 99.6%

At 30 Jun 2016 At 30 Jun 2016 At 30 Jun 2017

Expense Ratio Loss Ratio

Mainland P&C Insurance: Combined Ratio Kept Stable Over The

Years

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)

35

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

Overseas P&C Insurance and Reinsurance: P&C Premiums Kept

Increasing; Non-Life Reinsurance Developed Rapidly

36

Overseas P&C Direct Premiums Written

（HK$ million）

Reinsurance Premiums Written*

（HK$ million）

* Including business of TPRe (China) and excluding universal insurance

1,123

586

1,212

524

HK & Macau Other Overseas

1H2016 1H2017

-10.6%

+7.9%

+1.6%

Overseas P&C

1,709 1,736

2,881

4,009

3,026

2,555

1H2016 1H2017

Non-Life Life

+11.1%

5,907

6,564

92.5% 87.9%

92.7% 94.9% 92.9% 94.0%

HK & Macau Other Overseas Reinsurance*

1H2016 1H2017

Combine Ratio

37

+2.4pp +1.3pp +5.0pp +2.0pp

Overseas P&C Insurance and Reinsurance: Combined Ratios Kept at a

Low Level, with Business Quality Remained Sound

92.2% 94.2%

Overseas P&C and Re

* non-life reinsurance business

• TPP

Pension and Group Insurance Businesses Review

Note: The Group holds 100% of the equity interest in TPP

38 The following figures are the results of TPI from its operations, before intra-group eliminations

39

Pension and Group Insurance Businesses: Premium Income Kept Rapid

Growth

（HK$ million）

Annuity Entrusted Assets Annuity Invested Assets

（HK$ million）（HK$ million）

Premiums Written

65,885

60,530

At 30 Jun 2017 At 31 Dec 2016

+8.8%

81,324

70,381

+15.5%

1H2016 1H2017

2,961

+6.2%

3,145

At 30 Jun 2017 At 31 Dec 2016

Investment

40

41

% of Total At 31 Dec

2016 At 30 Jun

2017

Fixed income 73.6% 78.7%

Debt securities 38.7% 44.8%

Term deposits2 10.9% 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 investments1 5.2% 7.2%

Investment properties 4.6% 4.0%

Cash, cash equivalents and others2 8.5% 0.9%

Total 100.0% 100.0%

（HKD million）

Investment Assets

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

Allocation of Investment Assets of the Group

At 31 Dec 2016 At 30 Jun 2017

+12.1%

425,180 476,616

8,207

9,685

1,145

(1,325)

1H2016 1H2017

Total investment yield 4

42

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

（HK$ million）

Net Realised and unrealised investment gains 1

Net investment income 2

Investment Income

-10.6%

4.69% 4.02%

9,352 8,360 3

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%

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

Debt Investments: High Credit Ratings of Debt Asset

45.4%

35.0%

18.2%

1.3% 0.1% 0.0%

AAA GBs FPBs AA+ A-1 AA

Credit Ratings of Domestic Bonds

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

Alternative investments proportion kept stable, with structure improved 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

44

Alternative Investments

Alternative investments risk remained at a low level

Outlook

45

Outlook

46

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 Top-quality 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

Outlook (Cont’d)

47

TPI 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

TPP 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

Outlook (Cont’d)

48

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

Outlook (Cont’d)

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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

Questions and Answers

50

china taiping insurance holdings company limited 2017 ......holdings company limited 2017 interim...

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