Huize Holding Limited (HUIZ) 24 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding Limited First Quarter 2024 Earnings Conference Call. [Operator Instructions]

Today's conference call is being recorded, and the webcast replay will be available. Please visit Huize IR website at ir.huize.com under the Events and Webcast section. I would now like to hand the conference over to your speaker host today, Mr. Director. Relations Investor Hu, Harriet Please go Harriet. ahead,

Thank conference call operator. Hello, of everyone, earnings our to welcome for and XXXX. you, the quarter first

are operating earlier our Our were website currently and IR Newswire. and both available the financial and on results today released

measures like would Please will press safe will earnings our refer you which be which as also we also we applies today, making I harbor continue, to non-GAAP filings thoroughly in statements. statement note more we that explained discuss release to earnings Before call with forward-looking our release, SEC. the are the to this in and

start performance us Mr. questions. and on provide call overview then an Founder Li Joining and highlights before we by the and COO, Mr. operational Co-CFO, Cunjun Tam will first Minghan Xiao; open Ma; Tam. for our period for the details are Mr. XXXX. Zhang, Ronald quarter the the Co-CFO, up of providing for CEO, company's today Mr. of Mr. Ma will the results financial the call Mr.

turn now Mr. Ma. over to will the call I

Language] [Foreign

[Interpreted]

thank industry insurance expenses distribution the Adeptly solid business profound omnichannel surpassing average. of impact positive international and industry made allowed on of XXXX with China's the premium original product progress the X.X% continued the high-quality and by trillion. navigating XXXX, First and quarter everyone, Conference to to footprint insurance approximately RMB Call. actual Hello, for In joining Earnings first deliver recovery an X.X year-over-year its the alignment our with results, capabilities development registered economy momentum. of you The showed with us offerings, Quarter towards also income market increasing diversified

increased quarter quarter, profit or marking RMB achieved XX.X% our consecutive on net first of We a sixth by gross platform revenue sequentially of XX% up GWP, the million RMB reached facilitated sequentially. RMB to million. profitability. premium, Total total XXX In X.X billion, our written X.X

Language] [Foreign

[Interpreted]

the demand mix, and in this product products, products. of capital and strengthened In increased relatively decline terms volatility insurance enriched we opportunity, rates stable offerings Spotting the our for with markets of annuity participating continued including quarter domestic savings insurance interest products the further in during returns.

FYP RMB first doubled of more RMB by platform total sequentially FYP million. XX.X% year to to XXX result, XX our long-term million. of insurance than million premiums products sequential On XX.X% basis, or RMB health to a products million. facilitated increased tripled RMB on by increased and As XXX than long-term life to products FYP of annuity more FYP XXX insurance a

the XXth strengthened for for long-term quarter X.X% further our premiums industry-leading reached GWP We position in insurance consecutive marking total accounted of million, above ratio our XX%. sequentially. Renewal a GWP long-term RMB XXX with market. up X.X% insurance

Language] [Foreign

[Interpreted]

insurance premium our has and representing product XX% age a cumulative old quarter, of the new insurance increase sequentially. insurance of long-term higher-tier representing from quarter, a FYP the years of Kong of to of high the sales, success size cities XX.X were from X.X from the end our first As of expansion, the customers contributing customers XX,XXX, increase first from was Hong the RMB products quarter's XX.X% an their benefiting million, high grown average our approximately savings insurance customers the previous ticket business record base. reached number of average XXX,XXX Among

insurance February, remained for persistency cumulative the the month long-term levels of and more in than ratios of end XXth XX%. industry of high As at XXth

Language] [Foreign

[Interpreted]

continuous during Generali we and returns adapted with introducing and quarter, have life first partners. Isando, the on guaranteed reduction significant expenses product by the Amidst a implementation of participating cooperated underwritten end XXX the the quarter. quickly actual insure traditional to registered by the of sales insurance customer alignment insurance the whole of which opportunity As of was and fit demand life market generated China, of

[ to of a April, Costco choices the customer of operational financial from Copco planning, of insurance for Aviva and and future product participating customer ] Furman range products These attention ] ] whole customers [ expertise combining differentiated partnered we has that with offers the wide in market. insights In significant [ a product strength design. launch life AViva our insurance received

time, also a of launch Critical Star #X, Wing product insurance topline customers. the critical meet We sub-health care at customized insurance addition, series younger the the to product partnered illness illness life critical critical Care latest a needs evolving with Darwin the to same low threshold we individuals, PSC insurance in for launched

Language] [Foreign

[Interpreted]

and XX.X%. our conversions first [indiscernible] financial achieved the direct-to-consumer activities. In IFRS platform million marketing, or customer year-over-year IFA RMB independent DTC In The quarter, content promotions, increased of a number sales in segment, growth year-over-year. high-performing XXX% our engagement successfully FYP advisers XX,XXX by various more by of through first or reached we quarter than XXX facilitated the

momentum the our Chinese market Hong mainline demand our of total X% Hong for of satisfy contributing and products insurance purchasing the in continued, In we quarter, insurance addition, presence Kong visitors, first In expanded overall of customers. premium to revenue. services products the high-value Kong

Leveraging potential in lead successful strong respected capabilities maximize purchase customers rate the further quarter. Kong repeat of high for have into first long-term our in the products LTV our market, our comprehensive our as of conversion platform, and the of high-quality XX.X% penetration generation DTC we insurance and sales IFA Hong segment

by efficiency compared created industry maintained period expenses by same points operating our reforms last ratio expense optimizing the focus the to -- percentage operational year. decreasing we XX.X%, by and our on with Recognizing ongoing with when total improving uncertainties XX revenue

Language] [Foreign

[Interpreted]

deployed its AI fully to as improvement agents our consultants consistently assistant its has make optimize consultants. empowering Today, rate utilized and been we our algorithms and in by each and proprietary marketing our capabilities

to new tool industry. support transformation the power drive We AI also the business providing a digital of launched development further

This tool is is for available undergoing and currently on team external PC tech agents. internal

for our services and partners products, insurance carriers' support market insights of address AI meet us insurance the which personalized we functionality customers' content positioned uniquely distribution productivity expanding to and in and management. committed are for risk are We improving needs demand to

Language] [Foreign

alignment intermediary new the enters its to position. of and and era will and industry-leading of expenses. Huize industry insurance to core maintain actual improving an regulatory continuously the competence But while operating efficiency the environment adapt registered

strategic Looking on will sources our capabilities. product investments productivity ahead customer improvement, our in by insurance platform or and remain subsegment efficiency innovation demographic proprietary AI for driven targeted

to our and differentiated controls International we structure to optimize with expansion our partners, ensure levarage, digitalization, insurer continue Huize and codevelop sustainable enhance organizational to operating profitability. long-term will products cost

markets opportunities offerings Hong in expand Southeast also product distribution Kong, in capabilities of Asia. our emerging and will customized We actively while pursuing

the through product our insurance and entire team will accelerate integration of insurance channels. Finally, partners service as AI our IFAs distribution we such carriers, our empower to

[Foreign Language]

I key now for turn first today. Mr. our over of financial for Ron remarks the prepared my concludes overview CFO, the Tan, quarter. and he highlights to an This our will call will [Interpreted] provide

macro Ma Asia, industry to Mr. first morning, XX% total everyone that X.X XXXX the platform Harriet, as GWP the during to and landscape challenging quarter market facilitated improved. by on overall the for the you, Thank We're evening very billion of our recovery and and landscape good gradually pleased economic and has sequentially good in RMB report over in increased U.S. those amid

as diverse high-value second customers international platform customer omnichannel market by a well driven attracting product the largely enhancing our of a into of last been successful has and revenue existing increasing growth since and model as engagement year. new contribution distribution expansion Hong of range the offerings This the Kong from are half that

portability. We're quarter consecutive also of pleased to announce the sixth

contributed business our further Firstly, Our quarter. the products, key which effective strategies, the ascertains our on of first maintained have of sustainable execution profitability GWP over priority to XX% our strategic long-term insurance in we

to our advanced distribution diversified AI the financial productivity tools. matrix and independent product Secondly, or our open IFA platform continued with network, empower omnichannel advisers

reached FYP million quarter generated platform the of up year-over-year. XXXX, in by RMB is by first our IFA significantly XX% which $XXX

engagement to our customer customers. the the we first year-over-year insurance Thirdly, points which In for efforts products XX.X%, reflects purchase by direct-to-consumer increased or relentless segment. the in repeat X.X further value lifetime quarter, in percentage our value long-term of long-term our our our ratio has exploring deepened

to proprietary further our improvement our AI further leverage operations streamline Finally, we leverage operating further by our the in ratio. solutions expense as evidenced enhance and our

And high the several our of quality of One, XXth business to strong end long-term approximately FYP solid. performance I remains for RMB over as quarter. remain the and highlight our XXth at XX%. sequentially and of doubled month the at million. XXX health that insurance than life look our first levels of achievements renewal more drove operational February, in results, our we want to As key persistency ratios Two, products industry

progress the Kong and size high upselling Hong we is quarter market. from average long-term the ticket by our RMB for increasing of XX,XXX third, increased year-over-year contribution reach product customer which And has XX% base savings record products made have a in our sales platform, premium existing in our the demonstrating first to XXXX, in for that

These a long-term we approximately to potential high-quality highlights in products position savings XXX XXX lifetime And our approximately on to sequentially will while long-term customer RMB insurance examples the of in the value a capitalizing just are our health first market-leading profile FYP In customer we and customers. long-term of few sustained quarter, products. for continue pursue XX% health X.Xx mix savings between evolving our needs. sequentially million. and surged to categories success balanced by RMB a satisfy products to product million, for FYP increased

new we by revenue time, presence robust strengthening of RMB on increasing in from further same and through with million. of customized the China, a the P&C capitalizing further into Kong from Apart Asia's products LTV MCD percentage capitalize create streams market to the high-value We industry. to XXX FYP expanded in from sequentially products remain digitalization our our share in of promotion XX we business the to demand long-term committed insurance on Hong points higher Hong opportunities team insurance At expansion to approximately customers. this Kong diversified our

of contribution revenue international in increased XXXX. first to Total the X% quarter Kong from Hong

in also to be and revenue internationally, brand international to able revenue We Asia business recognition Southeast in opportunities model demographics new replicate growth developing By contribution that supported markets awareness year. China. proven to a proactively grow confident are are digits and double streams in strengthening we this identifying with we'll

capabilities distribution our help to acquisition and improve our and proprietary capabilities have our platform operations Meanwhile, omnichannel and AI our enhance engagement streamline products efficiency. customer

the million total than net over have count ecosystem We to added of customer to quarter, the March. of X.X first increasing new the as in XXX,XXX end high-quality the more customers

decrease percentage points In operating expenses first XX total quarter, by continued the our to year-over-year. falling

March, equivalents first and Our of a balance financial improved RMB further cash of the of with in of expense to XX.X% from ratio And end as XXXX combined position our a cash million. operating earlier. XX.X% the at quarter solid XXX remains year

leverage We'll deep platform on our to our to innovation proprietary insights and IFP our technological customer and create insurance to advanced Moving upselling continue leverage product and engagement model and by own enhance offerings forward, tools opportunities. partners. distribution and product omnichannel enhance acquisition we'll which agents additional AI customer

laser-like by We profitability focus further a on resource sustainably. allocation will driving ensure and optimizing solutions operating to to efficiency deploying improvements AI remain

We're that full a solidify in are optimistic via We we maintain ] will insurance insurance efficiently power for to carriers partners our efforts connecting strategies and markets. about year. confident also we outlook [ solutions. leading XXXX, for the strengthen Asia, XX overseas summary, AI net and data-driven our of explore position and in new as and currently our our profit a technology expansion will of In distribution non-GAAP consumers, our RMB opportunities million outlook digitally platform the

open conclude up questions. will to we call operator. opening you, our that, you, and over Thank remarks with the and And to

first from comes CICC. [indiscernible] question from Instructions] [Operator Our

Language] [Foreign

So my related is the health to insurance. first question

regulation the on, a So products. insurance we want Can health such long-term And What's they what's long and profits. what the actions short in regulation of from has your group see We brokers how And term, of just their tendency insurance and demand term see a future? And and second avoid recent products. moving our know taken observations online see question measures want as the to XXXX, many fee the mainline we of of ensure insurance your health will how strict growth? to the my downgrades? face view consumption of sustainable cost from customer the challenges is, take to from they we [indiscernible] short-term you is strategy period. revenue this have business terms you decrease maybe sharp

questions. for [indiscernible] X Thanks, Okay. your

to Let regards me on by short-term questions demand the X or address With the long-term products. question first these for one. one health

seeing broader are similar first quarter we market. the the in I think trends with in line

category I have think terms in the as quite market recovery. we weak be seen of bottom the continues this in to

long-term our remarks that in we growth product first health quarter. sequential Although seen our we opening disclose have segment did in the in

XX%. million have which achieved FYP actual $XX increased our health in first I think have quoted products sequentially of we by here, whereby the numbers quarter, long-term

I downturn where to how now. for will. changing at the or compared of think or continue this by are product or to products to key Obviously, consumer always innovation macro right weak you products demand been adapt for as production-type to if is forefront a the we a demonstration have which preferences, behavior consumers be reimbursement of savings products, budgets in type focus relatively consumer

So I terms example, we very innovation focused in recently, a we continue cooperating products, think PICC. going the will have insurers, delivered for health be also bigger forward, of as with of brand on products to

health the launched product have groups. we April, In Darwin some targeting is optimal new which

to production will targeted and require in years, over products further us partners. selling addressable products expand to consumers X market have way to require by been the what from where, well be the will illness marketed critical product X of and or further for saturated relatively the which gap then So customized has customers kind past insurance of satisfied the carrier that to industry innovation a the example, the market more previously been from

segment, in also segment of in high-end continues that there's demand. there. premium product see be to to We terms a see the We bifurcation demand middle the that in

thousands like is to of going a or guaranteed this the reimbursement help think renewals on the we'll forward X,XXX suit product features low X,XXX neighborhood to with the of also market together better to kind how to on product range, I premium innovation the insurance medical So type for partners short-term FYP carrier where in us focus inpatient with cooperate categories.

that brokers I With a on industry. be is second say question, think few to the first the would I agencies of here. topic to the impact to regulation the regards day, which question. [indiscernible] will so-called So the answer the points and your like really

results, think, which we if traditional or been first believe agents in changing as increased of broader outperforming terms insurance I we resilient, all, have have the adapting the our China. year-over-year, particular been of brokers in demonstrated QX quite has FYP and very in environment, not do far or sequentially we

development more omnichannel model that lead And are agency players platform have the for the to that's terms platform led business traditional thanks in really versus the we of generation more market. of whereby on entrenched reliant in force we type

point like So I I'd think that is X key to make.

demonstration with really business our also business the that AI are gains technology processes. and that have on head side, that across continued ratios you continued a Second platform, And income asked, of that to point as really as products seen we our to throughout efficiency categories. is you we have and improve our model improvements for have have to the we in growth the count the enabled, that ability our selling less are the business develop contributing efficiencies cost the the fact expenses on expensive operating demonstrated that's by fact

innovation I'd that cost And pressures past differentiating our with to is strong capabilities. the the the is trusting point, market terms the the digital case brands that And channels in big product then X very I to to key think side. respect regulatory like been on that is that over has always are for demonstrating So make the of the us a another encountering distribution year. point in the company finally, factor fact that

Ping bigger of consumers and preferring been I Aviva An are mind management. the Costco. names for So to Health, big higher current conditions names PICC, that will with think in products we the have comes quality market with overall brand peace all it brands when These China, partnering are the wealth financial resonate Chinese or like Generali, where

So questions. terms that will stop answering in be there clear hope I of I just will you. And you. your to Thank

Our from Amy [Operator from comes next Instructions] Chan question Citi.

some questions. This is I have Amy.

The Actually, congratulations quarter. first consecutively X on is on profitable profit. net a

channel the year. cost the lower this to notice up actually profit over last first we significantly elaborate Could that also And noted front? And around reason the it's May quarter actually period I you due higher what do compared of revenue, main However, this? on the that net to year, behind costs. XX%. know on the this probably we picked in same that please

is has question could if provide how your more you you commission level second color to I'm also [indiscernible]. the wondering as protection-type impacted with respect And on Could products saving-type on please this as on products. well

Okay. Thanks, Amy, again. for us joining

currently that's changes of So quite will really yes, a the quite also But the that key would regards you questions a as say of I the result other be increased with in from channel costs to regulatory fact margin that have first quarter, due one be that. the key pointed will part to compression. direct out, you bit.

in market was first strategic regulatory a under in quarter strong products available the it savings think I the to previous on demand the last expected for the move capitalize the regime.

to And led the convert to among a policies also [indiscernible]. market in quite players fierce so that from competition different

another has in resulted cost. of QX to as surge And channel as the for compared in which percentage segment also revenues relative and resulting reason DTC of there's higher a that, the revenue quarter. some our in from that therefore, contribution be distribution and will the BXC first smaller for cost a in DTC So

target improve changing course as quarters of continue environment. few the the that the to next to we over We adapt do to

So be questions. answer that will first for the your

year. second savings declined we quarter. impact in the half, would in And channels second on the have rates commissions, of [indiscernible] in think first And XX%. the effect are to on in seeing products to neighborhood on now XX% terms of the broadly brokerage I In general, say, the for I and I on conversion starting would quarter the first the say regulatory agencies the

for we a less have are the more focused protection because For on so-called products, resilience online always seeing products. an of somewhat more protection products, [indiscernible] been we impact or products,

a But in this products customers savings right to broader bought by has been for type of category. products. distribution much now, on So that as we're the products, of obviously, the as seeing in the most not compared impact of both savings are the of on commissions market,

we So on concept the decline impact protection the at savings products the now. in versus the more rate right in looking a levels market that overall same commission commission for numbers have are

from Our [ [indiscernible]. Lim comes next ] question of Kenny

Very much.

achieving to congratulation management on First, profitable another quarter.

obviously, questions end. X So my on

expansion start plan color ask And how far? policy? these you give update wanted there your revenue? to any contribute progress your about segments Asia. second, And I return could Do First, Southeast shareholder us in is so an more is whether the to on

right. All

So thank appreciate for you, [ coverage. joining ], Kenny first I for your us time, the and

list Yes, active So -- first multiple -- various dialogue quarters markets X in over Asia. point, of we of to like the obviously, course parties Southeast have past terms have we And Singapore we of the and the question been also growth other on Indonesia, this includes, expanding in Philippines Southeast Asia, and in markets. into Vietnam. terms with

are we still right the Asia first Southeast quarters. in quarter. outside [indiscernible] very market Kong to Hong X% Southeast now, But international is focused landing overseas revenues at not So Asia next revenues. as Hong But contributing the in of Kong on first on overall our then X group the

in Kong year improve as from digits We well percentage to will in look this Asia. new Southeast to market Hong organic as a both double growth

received respect we be areas. have countries in also want a dialogue inquiries and performing of also partnerships local and strategy. of countries those see from seeing initiative for in reverse potential terms in But groups markets, would buy-and-build very an large we're ventures they some where groups kind likely respective Southeast the digitalization the the insurance joint in distribution Asia fruitful we local where rollout And M&A under of expansion most with

that Asia your So my be to answer question. Southeast will

The second shareholder returns. question on

are next are the to we to return X shareholders think way I -- planning X the in to to we by years dividends. of capital

ahead would unlikely. enable planning XXXX, dividend So be right the think that we distribution. for I structure are on up this setting But to

of it's dividend think years kind we probably initiate I that horizon X, more to looking be next the policy. X will in our

questions, Thank your be will Kenny. answer to you. my that So

you very concludes our much. This Q&A Thank session.

back Harriet to closing remarks. hand Now for I

Huize's for you closing, we of In management behalf like thank today. to team, on would joining us all

require IR joining you out reach free information, your If . us the Thank Huize's any for team. further to to call. concludes today. This you please feel

Thank you much. very

conference today's you concludes This participating. for call. you. Thank Thank all

of call.] an spoken disconnect. [Portions by now interpreter the may marked transcript live present were You this are on that [Interpreted]