Huize Holding Limited (HUIZ) 25 Sep 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Huize Second Quarter 2024 Earnings Conference Call. [Operator Instructions]

Today's conference call is being recorded, and a webcast replay will be available on Huize's 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. Kenny Lo, Huize's Investor Relations Manager. Kenny. ahead, go Please

Hello, conference welcome call. operator. quarter our XXXX earnings everyone, you, to and second Thank

IR Newswire Our earlier currently our today and and and financial operational are available results on services. were released website Global both

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

Joining highlights, by Jiang; CEO, Co-CFO, and an company's the providing us will Mr. Mr. Li Xiao; Minghan COO, Ma and Mr. overview Co-CFO, Language] of Mr. our performance we today Mr. quarter are the Ronald call Mr. Cunjun will now the call by Founder results Tam. Mr. will turn Ma; call questions. I Tam, start before financial our go for Ma. [Foreign followed the and to operational over for open the up who over

mix, and Hello, in by declining clearer. implementation the for proactively the second undergoing conditions Second guidelines insurance and changes, pivotal remains our Conference unified the driven innovation and the Chinese immense, industry of to increasingly XXXX, volatility to effect challenges. XXXX Earnings presented reporting regulatory diverse offering has consumer of omnichannel in a year, we joining Throughout become and opportunities products market intermediary industry-wide take a you new everyone, quarter the and with and Quarter Call. response capabilities. product been Chinese by potential market In driving as gradually in fees policies customized strengthening is distribution and The transformation Huize's interest adapted insurance both in [Interpreted] rates behavior, the changes thank industry these commissions of underwriting. Despite

on expand XXX our facilitated We to our total capabilities, written X.XX RMB also GWP, the RMB second million. [Foreign quarter and of reached clients revenue total XXXX, serving prioritize capitalize with international Language] [Interpreted] on regional AI continued platform growth our presence gross high-quality or billion, to amounting to opportunities. In premium, advance

quarter, a XXX perspective, throughout health In million, to trend mix total RMB on our to From insurance million. second our maintaining the FYP a RMB product FYP amounted long-term platform the the amounted facilitated [XXX] year. growth

quarter, While FYP XXX on RMB year-over-year our million focus X% XXX insurance premiums year-over-year, strategic reflecting RMB life by reached second grew [ of up long-term continued ]. Renewal million in to XX.X% insurance. long-term the

Language] [Interpreted] GWP, offerings. [Foreign for premiums product [ RMB FYP with the XX.X% XX%. Moreover, insurance XXth a marking also maintained with number XXX to diversified year-over-year further consecutive by increasing this total reinforcing insurance of long-term As our our result, momentum quarter XX.X% ] positive about accounted short-term business million, approximately standing

conversion. superior experiences. achieved Huize events. marketing remains as dedicated of campaigns, and users efforts XX,XXX by customers these membership to delivering than successfully monthly and the sales Throughout serving such initiatives quarter, launched than through service company we have high-quality festivals, more celebrations more number XX,XXX anniversary, reached We marketing a

first We [XX,XXXX]. reached provide by XXXX, to In also services. assistance total the professional claims with of assisted Huize claim the half continue users cases insurance efficient and number of

Language] have XXX claim of total RMB We amount a approximately settlement million. [Foreign

year-over-year. customer average grown model. Furthermore, with customers customers up years XX.X insurance quarter. average the second customers of added a with to XX,XXX, high-quality The during of size ticket cumulative X.X As the number from RMB age higher-tier insurance new our has cities, long-term saving [Interpreted] the of FYP end of of products million, the XX.X% maintaining quarter, XX.X% XXX,XXX reached was

long-term stable, points. remained of XX.X%, retention X.X with Our insurance repurchase reaching of also percentage increase rates customers a customer rate have year-over-year

at in of industry insurance end persistency month remained over ratios Language] cumulative XX%. [Foreign the and our high of of long-term levels for June, XXth As XXth

to Fu been Man existing product, deep [Interpreted] and customized operational rate hedge partnered insurance market a which participating interest our for environment, to XXX since the risk companies. As continue of whole preservation. In our April, response launch we low recognized adverse introduction. life In Aviva-COFCO of widely and insights on quarter, we with capabilities, end asset insurance to with needs meet has second and inflation customers' cooperated we the have quickly we the adapted upgrade Building products. and its Jia, iterate to

insurance Qi life critical Tao No.X, In child partnered to introduce a product. with July, we China illness Merchants insurance Xiao

we care optimizing to IP's While and our further illness the insurance the marking scenarios evolving we refined critical version coverage critical details. In Darwin customized XXX major payment needs. address XXth option customers' effectiveness, September, launched Darwin latest provides coverage more cost of illness the plans on series. coverage No.XX, and focus needs expands critical to by maintaining This addressing additional users' iteration

of the as quarter, customized of a increase recognition end a product well quarter Huize's customized and increase for leading the users' second percentage as capabilities This of the XX.X points. of Language] of points, percentage products. [Foreign fully representing As Huize's year-over-year of products XX.X total innovation FYP, demonstrates over accounted XX.X%

[Interpreted] the its The business our international initial international XX% revenue total year, implementation company quarter, our past has of target. over strategy an to second contributed the of international double-digit in business. encouraging Thanks the progress in hitting

market marks long-term also into Vietnam's milestones robust Additionally, expansion, but Huize's outstanding expertise and highly our market, leading economic population mission our Global believe Marking key both Care. of digital platform. market, to and base, to digitalized brand, mid- our Huize's business demonstrating second only in in an in with Insurtech, experience Chinese that Asia, Southeast forms its large, another acquired potential. We Insurtech capabilities, technological a Poni the a Insurtech is and official part emerging international Huize's tremendous international not strategy this overseas firmly young accelerating Pan-Asia successfully strong build a platform, extensive market. growth entry insurance Vietnam, experiencing as

Care, empower create driving unparalleled the will digital both will for insurance parties. On Vietnamese Global the Huize We transformation one competitive of market. advantage hand,

help environment. Global global Huize On a and changes contribute been the other market market the a revenue rapid building to of brand. [Foreign diversified will expand year in recognized has XXXX Language] [Interpreted] hand, Care

operational unique market. insight market expansion promising adjustments, have the and resilient to continuous flexible and Huize's on this has results. remained business At international leveraging begun However, our same show challenging time, in we

of becoming era the Looking record interest for a official the rates products guaranteed strong participating mainstream expected ahead, experience X% are demand, to with on the products in rebound insurance, in insurance market. the

to with companies, Language] regulatory launch needs, closely each and ensuring work environment. [Foreign that insurance promote the sustainable will align and other's with new We better under resources products participating growth strengths leveraging market

remarks CFO, Mr. provide call our Ron overview I concludes This highlights today. my who of will for Tam, the [Interpreted] second prepared now key the an financial will our quarter. turn to for

the for time And at base well GWP platform a second Thank on for and X.XX U.S. I guess the market quite challenging zone, delivered effect everyone the good you, of is quarter, in essentially pretty we billion. good New basis Hong set York, high Kong, and with in evening, Ma zone. I landscape RMB Mr. quarter. considering Asia second total morning, comparisons, discussion a results on time the industry guess to into everyone, resilient for Kenny, year-over-year year-over-year open have facilitated here, and the the flat our

both average high-quality distribution or attributable differentiated the and continued Our in increase our the online overall product offline was to industry's intermediary acquire to industry-leading customers, relative acquisition revenue our our innovation omnichannel of an contribution market. outperformance and the ability capabilities which platform largely our against channels, covers capabilities from model, international

of over insurance a XX% which on focus perspective, our GWP we quarter. second long-term continue product accounted products, From strategy for to during the strategically

distribution our tools. proprietary model financial product open the productivity partners Our with also continues the distribution our and platform market to our advisers, in omnichannel channel network, diversified empower IFAs an AI and internal matrix

metric across of long-term deepened XX.X%. repurchase insurance on X.X high-quality potential year-over-year customer customer with LTP segment ratio upsell during to direct-to-customer points and our cross-sell ability customer products second to our engagement quarter, actually directly the percentage our increasing also set base. a further underscores and our the capitalize We the This by for

operating to employee. the year-over-year, and our GWP quarter, and solutions employee we continue leverage to on million per In in-house efficiency. RMB We leverage productivity develop operations XX% second by improved AI to X.X proprietary streamline has enhance reaching that per our

key our results, in As increased RMB second that XXX one, we quarter. renewal the to Number operational look million. highlight drove achievements performance premiums solid I our several to want approximately by at XX.X% year-over-year

for premium a international XXXX, is which products end policies by the of for the ratios contribution and market quarter record XX% June, reflecting of increased our in made we of levels high size long-term of product second XXth of in As insurance XX,XXX reached sales have RMB year-over-year, over up our segment. from savings high our month persistency thirdly, health ticket XXth life average industry and over XX%. And at long-term

FYP continue balanced health driven between savings with categories. insurance including customized We products Ping from by to long-term top primarily to products a health million, sequentially products by pursue Health XX% CPIC. insurers increased long-term our our RMB mix and An and XXX The

same from XXX business Thanks XX% the increasing margin RMB our from rate in FYP and international stable costs year-over-year million. sequential by this points time, a of segment quarter second XX% on overall as has the health with to segment, our the to XXXX. the from our controlling increase short-term rate contribution XX.X% of take by P&C At percentage momentum, strategies and improvement in direct-to-consumer well in basis. profit as products growth from also to maintained in repurchase gross product by FYP sequentially mix distribution the channel improved grew X.X overall

with equivalent the USD cash quarter. the of financial U.S. robust or position remains RMB second of Our and as cash a million XX XXX balance dollar end very of million combined equivalents of

productivity engagement our distribution capabilities and platform streamlining AI Our and acquisition our strengthening omnichannel tools operations. customer are proprietary and

quarter. XXX,XXX to X.X expect end second an quarter customers of XX about by end of the as customer reach increasing added to the important platform million milestone quarter, platform have currently our the We customers X. million We current quarter, count in June to of total of our this new the the

adding and unique is for Moving empower acquisition by the optimized leverage insurance high-value premium of sales customer continue total enhance platform, to total quarter, products presence has and force our accounted engagement. We'll our up satisfy opportunities. forward, agents, product continue omnichannel the capitalize insights an head Asia's revenue We product and capabilities expanded our the in X% support demand count group customers. Again, with in from quarter. in IFP contribution which opportunities distribution partners growth further overseas promotion and insurance innovation robust of second drove partners AI upselling our tools our international the to long-term to AI first and and international XX% additional our to further cross-selling for industry. and to we will revenues advanced We'll customer offerings on to create rich

our strengthen brand, to Looking overseas, Poni resources international continue further we'll and allocate adequate Insurtech.

of acquisition Global to in priority the Following insurance market. local our is technology ecosystem model proven the replicate Care, our Vietnamese

growth advancements We work distribution capabilities. In to we new products, are insurance begun expand to long-term customized expected innovating our parallel, exploring have the is initiative our platform closely Asia to This the and to with team deployment AI by for already innovating and revenue to actively of diversify Southeast value partnerships, streams our enhance markets accelerate technological further shareholders. across underpenetrated footprint. drive growth, local

would leading and emerge, additional shifting of market We benefit targeting summary, term, entire our the industry chain. China X healthy medium by enter is and home XX% In growth we the opportunities of XX the to markets driving in months are revenue as insurance international of in ourselves. the group value such to industry anticipate next revenues which contribute drive players, would landscape sustainable consolidation the to XXXX. In

over partners operator. in that, We the to and via will connecting our data-driven platform Q&A. Insurtech a are digitally strategies now our insurers up confident open as solutions. And you, call and much efficiently you and very solidify AI-powered distribution with that Asia, and consumers, will Thank position leading our we to

[Operator first Citi. of the question Amy comes Chen Instructions] line from from Our

Hi. I have questions. X

Full expenses. year-over-year there year guidance, net The wise, some expenses increase second expenses about second as actually, well earnings the how guidance question share-based see has as think should first this We one as as we in being well the channel. some that is on quarter some has year, management compensation. G&A profit? The been on industry-wide due the and that from deceleration. the is rates been in We similar also to has broker been see side the the to understand surge year, second of And trends. And we quarter commission in trend. in disruption the rationalization this premium there regulatory the this the in there

of the reason related any mix after behind the has broker to quarter, the trend trend? The there is channel the looking regulatory the how growth? ahead change? also is for FYP regulatory muted However, the is third commission. question FYP product on third And rationalization trend growth changed Huize to How

you, for Thank joining us again. Amy,

earnings expense is QX, that some on categories items, compensation. the have guidance So it options you upticks price due basis. policies have reason the issued share-based and of I and our for has question first of quarter. think of has we expense item certain share in on noted expense the to through relates And a or the the have we new to address in And primary that in calculation as accounting a plans rightly some round in the SPC, our the to for second quarter, quarter-on-quarter first the rallied sequential use reversals increased

at ratio year the -- it QX affect that this first noncash does forward. to flows. revert the second, not to think expect expense more And overall, do all, going items, we of be cash So are of SPCs should level the I

your So the answer that's to first question.

on question second trends. FYP Your

QX, obviously the that's rationalization happened just the due the change And from reduced a have reason. brokerage which in impacted demand been overall quarter is customer reason going the to impact this too, X. products the mainstream that think by other commissions, XX, X.X% just whereby has regulatory I is expected was priced an be we on the the to pricing of August in third And only policy. on not rate September of in pricing rate, based rate interest to X.X% that year,

as to expect been that means that from customer QX to that in has back what pushed a by the or So people be QX lot policy effect is of demand August. shifted

industry's depressed FYP, the enough and especially on that of expecting product to FYP back So in demand the particularly. the that August, a on and category explanation, trend of in pushback distribution in in resulted And overall for environment in we has QX. based due the savings the that are on month push QX,

product answer rate becoming will differential more alternatives that for is still in in should on climate forward. the the increasingly local the and that alternatives due regulatory the So overall yield products is propensity economic very domestic think the power attractiveness on be from to third to savings the relatively are second still question now question. With declining of of consumers purchase keen power in interest regards right impact the current your to to the I mix, China, this -- fixed perspective, of or income example, attractive market further the drive products, comparison product good environment, going lack a investment popularization products

insurance quarters of a or participating terms coming we in the power a what mix, educated from we So one in people product to leading would And in of expect customize first the digital quarter. actually product. as are contribution the more the actually online product about products increasing is carrier the with second are brokers

the Ma, liability helping power would better time, their was returns meet the insurers market current by the We longer a and exposure the which come Mr. just have remarks we for with at partnered manage up customized same which have with asset up in Aviva-COFCO, run. mentioned product, opening that in requirements

customized X, believe on these managed and we also product become customized will agents it other forward the back one in also a that partnerships offline And improvement move do this category. us mix X And to product good X products have the production our product X [indiscernible] will And products. X, market increase is the quarter leading relates next helped as product, is the the as protection mainstream as we in That's to increasingly get our CPIC. insurers, educated with the mainstream. In the deliver of X, with [indiscernible] So this agents more become power about this also promoting product. years. we

the to, overall, So to again, take rate on rationalization as by it a regulatory is has against that and trend commissions. broker's commissions better of negative impact on contributed mitigate the brought

So answer question, that be my your will to Amy.

Citi. question [Operator Next Michelle line of Ma comes from Instructions] from the

in have not this? could some Ron one why some trying Citi. we they from into -- also, short and into I future, near new dive mentioned, each enter markets multiple you Michelle new business strategy we have on one into So overseas very is understand environment initiatives? time, would enter have shed a just the to business and enter develop markets different some -- you regulatory the to into on to market, like company I'm the target on And business then light can the think given in very just light This the why I just question another because one? shed market and could X

Language] [Foreign

international Thank on the front. strategy you, Michelle. on questions Great the

and the have today, to that XX and likely contact encouraged trajectory Kong, It's tracking maybe initial for is actually answer to Kong works XX we much first would results, I first obvious. market have Chinese obviously, the year. development for market, in growth seen we and years in parallel the target. years and of and envisage market, we [indiscernible] we to kind have further ago international China first other guess in anniversary to because with my can quite has take market. that business it business when the Hong basically of are where the well, has ago. the quite think to almost I to we And ago, reason the question been the of your is kind transaction perhaps place think grown I our think And from markets. Vietnam very parallel us Chinese that be, in that Hong year the almost it's X has in quite encouraged obviously Actually, by our I pursue weeks closed would been our is we X something our which been Vietnam,

it's In and very international a like aligned. similar can very approach And existing much greenfield M&A, where the perspective, Vietnam, It's and group. platform, we a us. much obviously, we buy the that our positive small. very to very is there. a very the and with Vietnam synergies chemistry replicate very product expansion. obviously, for be Huize's It's size, much not lot business It's build. and take and transaction And target quickly And a we flexible also have to of that quite managed. as a an M&A We the transaction business risk a And proven strategy. is technology believe is from confidence the financial our model. stack our integration our the version would over the of it's And

As partner that now. in for would a ASEAN of the would for in then the looking provide analogy attracted like But albeit for the strategy will local markets market, expansion. story the with Vietnam, that Vietnam, customers in right find category about or is this growth Indonesia in existing will a Philippines the lot ways. products likely, believe even markets. offer strong we frontier will our more just be product form might growth some base. And with and all of and markets X across Philippines, bit Singapore existing high-value little and the are a similar are our to the I potential some resources. markets be new think now that talked our markets, to customer Philippines, obviously, Singapore. These Singapore markets we that markets a be in target And We I be And can be guess, Hong Kong connectivity the the

our and Indonesia whereby will take local with to joint are we'll And the we be empower the we form and product group, the care with local the like which the resources. what at, our will partner local markets and in to group, to regulatory very established do venture local likely and technology Philippines, So the best know-how. business an what of a is from do is perspective,

around So part strategy that business of is really the the the overall business internationalization plan.

really We our will domestic what market. good always we're in with start at

versed a to the in local regulatory business markets, culture, markets local partner will localize each and try and in it seek all respect with very well We best to will practices we local very these are well who formula regimes. the experienced successful replicate and each to market markets local And local dealings. proven growth

I answer to So my would guess that question, be your Michelle.

Next from question line of the from [indiscernible] CICC. comes

or only to [indiscernible] [indiscernible] some the participation -- question, based I and products one question, the product more the my since participating And is tend might products, products introduce revert that have customized into more to introducing industry new mix participating [indiscernible] to go products? sell customized more

I couldn't your really Apologies, question. catch

kind has Just the been line you a of Could bit unstable. repeat?

is customized products? can now? me hear introduce to participating question my you Yes, products more some especially Yes, [indiscernible]

I Okay. differentiating I partners. X, codeveloping the one in of group with over the insurer of is the area strength years, key it. guess our competitive products X past guess that X, our Got has

I IPO-ed those at we just days, think if when products. doing mainly you in are company, XXXX, look protection back we our back

evolved annuities and health and insurance, customized groups, the products, so for are changing XXXX, illness We era we out of we forward focusing the we endowment adults adapted to and much the as groups. also customer then very have critical for And young on an different and the move quickly XXXX, have customization. And products demographic for children preferences, to into And elderly, has subcategories market the mainly for environment optimal even market products. and forth. rolled savings so we have

the COFCO Aviva experience Japan products already very with we RMB and are a become and insurer, U.K. in customized we the rate billion. a which in with capital purchase come regime the products a So interest product power is much what the China brand joint -- similar into joining have Group, from venture of as And the will a in products is become leading between market. the in first is likely the very again, here. that new It's -- mainstream the China, the confident will which can up context, move Aviva-COFCO, SOE second that -- X.X power quarter with envisage we we from become

is the the which help stakeholders a requirements X us main customized for the always product and is end, and only ourselves. With -- come which now the which the right insurers up all consumer intermediary, on and also also address is well. can interest strategy are involved, taken distribute of, the the product with stakeholders' product can X to care So the at that innovate the

QX, first power have this address version will expertise. the in experience and obviously come more And preference. changing we product up more we accumulated consumer already So products product, of have very market customization and come the continue we the strong up with with and to in environment to

And and distribution. so it's we that would all in out stakeholders win sure make come true that can terms product of the

you the Thank the back I'd questions. for that, Lo for With remarks. Mr. call to to like turn closing

operator. In Thank behalf on like Huize's today's in your for to team, thank management you, of closing, call. we would participation you

reach you information, to require call. for you today. joining out us. free This any concludes If Thank to us further feel the

Thank conference you your today's conclude for participation. does That call.

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